California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 7.7 - California Earthquake Authority › Section 2697.9 - Notice Requirements

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
				All participating insurers shall comply with the notice requirements imposed by
				subdivision (a) of Section
				10083 of
				the Insurance Code.
(b) Upon the
				acceptance by an insured of an offer of earthquake insurance and issuance of a
				policy of basic residential earthquake insurance by the Authority, the
				participating insurer shall provide the following notice to the policyholder in
				at least 14-point, boldface type on the declarations page of the policy or on
				the policy jacket:
CALIFORNIA EARTHQUAKE AUTHORITY POLICY DISCLOSURE THIS
				  POLICY IS BEING PURCHASED FROM THE CALIFORNIA EARTHQUAKE AUTHORITY ("CEA"). THE
				  COVERAGE IN THIS CEA POLICY SUBSTANTIALLY DIFFERS FROM THE COVERAGES PROVIDED
				  IN YOUR HOMEOWNER'S POLICY. THE CEA IS NOT PART OF OR ASSOCIATED WITH YOUR
				  HOMEOWNER'S INSURANCE COMPANY. IF LOSSES AS A RESULT OF AN EARTHQUAKE OR A
				  SERIES OF EARTHQUAKES EXCEED THE AVAILABLE RESOURCES OF THE CEA, THIS POLICY IS
				  NOT COVERED BY THE CALIFORNIA INSURANCE GUARANTY ASSOCIATION. THEREFORE, THE
				  CALIFORNIA INSURANCE GUARANTY ASSOCIATION WILL NOT PAY YOUR CLAIMS OR PROTECT
				  YOUR ASSETS IF THE CEA BECOMES INSOLVENT AND IS UNABLE TO MAKE PAYMENTS AS
				  PROMISED. IN ADDITION, YOUR CEA POLICY MAY BE SUBJECT TO FUTURE SURCHARGES OF
				  THE POLICY PREMIUM IN CERTAIN CASES WHERE AN EARTHQUAKE OR SERIES OF
				  EARTHQUAKES HAS EXCEEDED AVAILABLE RESOURCES TO PAY CLAIMS. IN THAT CASE, THIS
				  MEANS THAT IN ADDITION TO THE ANNUAL PREMIUM, YOU MAY BE CHARGED UP TO AN
				  ADDITIONAL 20% OF THE PREMIUM.
(c) The Authority and each participating
				insurer shall comply with the requirements imposed by Insurance Code Section
				10086(a)(3)
				for all policies of basic residential earthquake insurance issued by the
				Authority.
(d) If a policy issued
				by the Authority includes a premium surcharge, the participating insurer shall
				provide the insured a notice in a stand-alone document which states that the
				policyholder may cancel or nonrenew the basic residential earthquake policy.
				The participating insurer shall provide the statement with the premium billing.
				The notice shall include the following statement in 14-point, boldface type:
NOTICE OF SURCHARGE ON CEA EARTHQUAKE INSURANCE POLICY
				  AND RIGHT TO CANCEL
THE CEA IS IMPOSING A SURCHARGE ON THE PREMIUM OF ALL
				  CEA EARTHQUAKE INSURANCE POLICIES. You may choose to renew, to cancel, or not
				  to renew ("nonrenew") your CEA earthquake insurance policy. If you choose to
				  cancel or nonrenew your CEA earthquake insurance policy, your CEA earthquake
				  insurance policy will be canceled and that cancellation will have no effect on
				  your policy of residential property insurance. If you fail to cancel or to
				  nonrenew your CEA earthquake insurance policy, and if you also fail to pay the
				  CEA earthquake insurance policy premium and surchage by the payment deadline,
				  both your CEA earthquake insurance policy and your policy of residential
				  property insurance will be canceled. IF YOU WANT EARTHQUAKE INSURANCE PROVIDED
				  BY THE CEA, YOU MUST PAY THE PREMIUM FOR THE CEA EARTHQUAKE INSURANCE POLICY
				  AND THE SURCHARGE.
The participating insurer may add explanatory language
				  approved by the Commissioner to augment and explain the mandatory notice
				  language in this paragraph (d).
1. New section
				  filed 11-18-96 as an emergency; operative 11-18-96 (Register 96, No. 47). A
				  Certificate of Compliance must be transmitted to OAL by 3-18-97 or emergency
				  language will be repealed by operation of law on the following
				  day.
2. Repealed by operation of Government Code section
				  11346.1(g)
				  (Register 97, No. 14).
3. New section filed 4-1-97 as an emergency;
				  operative 4-1-97 (Register 97, No. 14). A Certificate of Compliance must be
				  transmitted to OAL by 7-30-97 or emergency language will be repealed by
				  operation of law on the following day.
4. Repealed by operation of
				  Government Code section
				  11346.1(g)
				  (Register 97, No. 32).
5. New section filed 8-4-97 as an emergency;
				  operative 8-4-97 (Register 97, No. 32). A Certificate of Compliance must be
				  transmitted to OAL by 12-2-97 or emergency language will be repealed by
				  operation of law on the following day.
6. Editorial correction of
				  NOTE (Register 98, No. 3).
7. Certificate of Compliance as to 8-4-97
				  order transmitted to OAL 11-26-97 and filed 1-13-98 (Register 98, No.
				  3).
8. Change without regulatory effect amending subsection (d)
				  filed 6-13-2019 pursuant to section
				  100, title 1, California Code of
				  Regulations (Register 2019, No. 24).
Note: Authority cited: Sections
					 10086(a)(3),
					 10089.11,
					 10089.28(b)
					 and
					 10089.29(b)(2),
					 Insurance Code. Reference: Sections
					 10089.6,
					 10089.11,
					 10089.28
					 and
					 12921,
					 Insurance Code.