(a)If a policy, contract, certificate, or agreement offered, issued, delivered, or renewed, whether or not in California, that provides or funds life insurance or disability insurance coverage for any California resident contains a provision that reserves discretionary authority to the insurer, or an agent of the insurer, to determine eligibility for benefits or coverage, to interpret the terms of the policy, contract, certificate, or agreement, or to provide standards of interpretation or review that are inconsistent with the laws of this state, that provision is void and unenforceable.
(b)For purposes of this section, “renewed” means continued in force on or after the
policy’s anniversary date.
(c)For purposes of this section, the term “discretionary authority” means a policy provision that has the effect of conferring discretion on an insurer or other claim administrator to determine entitlement to benefits or interpret policy language that, in turn, could lead to a deferential standard of review by any reviewing court.
(d)Nothing in this section prohibits an insurer from including a provision in a contract that informs an insured that as part of its routine operations the insurer applies the terms of its contracts for making decisions, including making determinations regarding eligibility, receipt of benefits and claims, or explaining policies, procedures, and processes, so long as the provision could not give rise to a deferential standard of review by any reviewing court.
(e)This section applies to both group and individual products.
(f)The commissioner may adopt regulations reasonably necessary to implement the provisions of this section.
(g)This section is self-executing. If a life insurance or disability insurance policy, contract, certificate, or agreement contains a provision rendered void and unenforceable by this section, the parties to the policy, contract, certificate, or agreement and the courts shall treat that provision as void and unenforceable.
Notes of Decisions
Yvette Williby v. Aetna Life Ins. Co., 867 F.3d 1129 (9th Cir. 2017).
· cites it 4× “The court did so based on its view that California Insurance Code § 10110.6—-which voids any discretionary clause in “a policy, contract, certificate, or agreement .”
Cerone v. Reliance Stand. Life Ins., 9 F. Supp. 3d 1145 (S.D. Cal. 2014).
· cites it 9× “Plaintiff, however, asserts that California Insurance Code section 10110.6 effectively voids the grant of discretionary authority, which in turn makes the applicable standard of review de novo.”
Polnicky v. Liberty Life Assurance Co., 999 F. Supp. 2d 1144 (N.D. Cal. 2013).
· cites it 10× “Plaintiff argues that the de novo standard applies because any grant of discretionary authority contained in the Plan was rendered void and unenforceable by California Insurance Code § 10110.6 when the Plan was renewed on January 1, 2012.”
Bentley v. United of Omaha Life Ins. Co., 371 F. Supp. 3d 723 (C.D. Cal. 2019).
· cites it 3× “] Finally, Bentley asserts that policies that do not include "renewal" language still renew annually because Cal. Ins. Code § 10110.6 provides that insurance policies automatically renew annually on their anniversary date.”
Doe v. Prudential Ins. Co. of Am., 215 F. Supp. 3d 942 (C.D. Cal. 2016).
· cites it 6× “Plaintiff also poses a substantive challenge to the discretionary clause: he argues that California Insurance Code § 10110.6 bars discretionary clauses in disability benefit policies, and that the discretionary authority provision is therefore void.”
Hirschkron v. Principal Life Ins., 141 F. Supp. 3d 1028 (N.D. Cal. 2015).
· cites it 6× “On its face, California Insurance Code Section 10110.6, which is “self-executing,” expressly applies to policies, contracts, certificates or agreements that were offered, issued, delivered or renewed “whether or not in California.”
Gonda v. Permanente Med. Grp., Inc., 10 F. Supp. 3d 1091 (N.D. Cal. 2014).
· cites it 2× “Plaintiff responds that the de novo standard applies because any grant of discretionary authority contained in the Plan or the Policy was rendered void by California Insurance Code section 10110.6.”
Curran v. United of Omaha Life Ins., 38 F. Supp. 3d 1184 (S.D. Cal. 2014).
· cites it 3× “Here, Plaintiff maintains that the standard of review must be de novo, rather than abuse of discretion, because (1) the Policy does not unambiguously provide discretionary authority for United to determine eligibility for benefits; and, (2) even if the Policy vests United with…”
Osborn ex rel. Petit v. Metro. Life Ins., 160 F. Supp. 3d 1238 (D. Or. 2016).
“” Cal. Ins. Code § 10110.6 (a). In contrast, Washington’s ban on discretion *1251 ary clauses only applies to (a) health care service contracts, (b) HMO contracts, and (c) individual and group disability insurance policies.”
Murphy v. California Physicians Serv., 213 F. Supp. 3d 1238 (N.D. Cal. 2016).
· cites it 3× “Plaintiff asserts that only the employer Plan Description (prepared by Blue Shield) contains a grant of discretion, but argues that under Supreme Court and Ninth Circuit authority, a summary plan description is not a “plan document.”
— Cal. Insurance Code § 10110.6(a) — 9 cases
Polnicky v. Liberty Life Assurance Co., 999 F. Supp. 2d 1144 (N.D. Cal. 2013).
“Plaintiff argues that the de novo standard applies because any grant of discretionary authority contained in the Plan was rendered void and unenforceable by California Insurance Code § 10110.6 when the Plan was renewed on January 1, 2012.”
Hirschkron v. Principal Life Ins., 141 F. Supp. 3d 1028 (N.D. Cal. 2015).
“On its face, California Insurance Code Section 10110.6, which is “self-executing,” expressly applies to policies, contracts, certificates or agreements that were offered, issued, delivered or renewed “whether or not in California.”
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