Cal. Codes » Insurance Code / DIVISION 1. GENERAL RULES GOVERNING INSURANCE / PART 2. THE BUSINESS OF INSURANCE / CHAPTER 9. Rates and Rating and Other Organizations / ARTICLE 10. [Reduction and Control of Insurance Rates]
California Codes

Cal. Insurance Code § 1861.03 (2026)

✓ current as of May 2026
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(a)The business of insurance shall be subject to the laws of California applicable to any other business, including, but not limited to, civil rights laws (Sections 51 to 53, inclusive, of the Civil Code), and the antitrust and unfair business practices laws (Parts 2 (commencing with Section 16600) and 3 (commencing with Section 17500) of Division 7 of the Business and Professions Code).

(b)Nothing in this section shall be construed to prohibit (1) any agreement to collect, compile and disseminate historical data on paid claims or reserves for reported claims, provided such data is contemporaneously transmitted to the commissioner, (2) participation in any joint arrangement established by statute or the commissioner to assure availability of insurance, (3) any agent or broker, representing one or more insurers, from obtaining from any insurer it represents information relative to the premium for any policy or risk to be underwritten by that insurer, (4) any agent or broker from disclosing to an insurer it represents any quoted rate or charge offered by another insurer represented by that agent or broker for the purpose of negotiating a lower rate, charge, or term from the insurer to whom the disclosure is made, or (5) any agents, brokers, or insurers from utilizing or participating with multiple insurers or reinsurers for underwriting a single risk or group of risks.

(c)(1)Notwithstanding any other provision of law, a notice of cancellation or nonrenewal of a policy for automobile insurance shall be effective only if it is based on one or more of the following reasons: (A) nonpayment of premium; (B) fraud or material misrepresentation affecting the policy or insured; (C) a substantial increase in the hazard insured against.

(2)This subdivision shall not prevent a reciprocal insurer, organized prior to November 8, 1988, by a motor club holding a certificate of authority under Chapter 2 (commencing with Section 12160) of Part 5 of Division 2, and which requires membership in the motor club as a condition precedent to applying for insurance, from issuing an effective notice of nonrenewal based solely on the failure of the insured to maintain membership in the motor club. This subdivision shall also not prevent an insurer which issues private passenger automobile coverage to members of groups that were in existence prior to November 8, 1988, whether membership, franchise, or otherwise, and to those who are not members of groups from issuing an effective notice of nonrenewal for coverage provided to the insured as a member of the group based solely on the failure of the insured to maintain that membership if (i) the insurer offers to renew the coverage to the insured on a nongroup basis, or (ii) to transfer the coverage to an affiliated insurer. The rates charged by the insurer or affiliated insurer shall have been adopted pursuant to this article. However, all of the following conditions shall be applicable to that insurance:

(A)Membership, if conditioned, is conditioned only on timely payment of membership dues and other bona fide criteria not based upon driving record or insurance, provided that membership in a motor club may not be based on residence in any area within the state.

(B)Membership dues are paid solely for and in consideration of the membership and membership benefits and bear a reasonable relationship to the benefits provided. The amount of the dues shall not depend on whether the member purchases insurance offered by the membership organization. None of those membership dues or any portion thereof shall be transferred by the membership organization to the insurer, or any affiliate of the insurer, attorney-in-fact, subsidiary, or holding company thereof, provided that this provision shall not prevent any bona fide transaction between the membership organization and those entities.

(C)Membership provides bona fide services or benefits in addition to the right to apply for insurance. Those services shall be reasonably available to all members within each class of membership.

Any insurer that violates subparagraphs (A), (B), or (C) shall be subject to the penalties set forth in Section 1861.14.

Notes of Decisions
Cited in 26 cases (3 in the last 5 years), 1990–2023 · leading case: State Farm Mut. Auto. Ins. v. Garamendi, 88 P.3d 71 (Cal. 2004).
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State Farm Mut. Auto. Ins. v. Garamendi, 88 P.3d 71 (Cal. 2004). · cites it 2× “) Based on the breadth of these business laws, the court then concluded that article 10 “encompasses more than rate matters and addresses other factors that may impermissibly affect the availability of insurance.”
Travelers Indem. Co. v. Gillespie, 785 P.2d 500 (Cal. 1990). · cites it 4× “I concur with the majority opinion insofar as it concludes that the mandatory renewal provision (Ins. Code, § 1861.03, subd. (c)) does not apply to either an insurer or a reinsurer after the Insurance Commissioner has approved an application to withdraw.”
MacKay v. Superior Court, 188 Cal. App. 4th 1427 (Cal. Ct. App. 2010). · cites it 2× “” But Insurance Code section 1861.03, which makes the “business of insurance” subject to all other California laws applicable to business, is itself part of the ratemaking chapter, although it is located in a different and later enacted article.”
Mfrs. Life Ins. v. Superior Court, 895 P.2d 56 (Cal. 1995). · cites it 2× “Code, §§ 16720-16770) and/or the Unfair Competition Act (Bus. & Prof. Code, § 17200 et seq.”
Comunidad en Accion v. Los Angeles City Council, 219 Cal. App. 4th 1116 (Cal. Ct. App. 2013). · cites it 2× “[Unruh, Ralph and Bane Civil Rights Acts]; Ins. Code, § 1861.03 [insurance discrimination]; Civ.”
Gates v. Superior Court, 95 Cal. Daily Op. Serv. 1146 (Cal. Ct. App. 1995). · cites it 2× “222 ] [Ins. Code, § 1861.03 which makes insurance companies subject to other provisions of law does not create a right of damages pursuant to Ins.”
State Farm Fire & Cas. Co. v. Superior Court, 96 Cal. Daily Op. Serv. 3713 (Cal. Ct. App. 1996). “) Although the “business of insurance” has expressly been made subject to the provisions of the UCA (Ins. Code, § 1861.03), the provisions of section 790.”
Textron Fin. Corp. v. Nat'l Union Fire Ins., 13 Cal. Rptr. 3d 586 (Cal. Ct. App. 2004). “) While insurance companies are subject to California laws generally applicable to other businesses, including laws governing unfair business practices (Ins. Code, § 1861.03, subd. (a)), parties cannot plead around Moradi-Shalal’s holding by merely relabeling their cause of…”
Stamps v. Superior Court, 2006 Cal. Daily Op. Serv. 1672 (Cal. Ct. App. 2006). “Insurance Code section 1861.03 was not originally enacted by the Legislature but by initiative as part of Proposition 103.”
Ellsworth v. U.S. Bank, N.A., 908 F. Supp. 2d 1063 (N.D. Cal. 2012). “Another provision provides that “[t]he business of insurance shall be subject to the laws of California applicable to any other business, including, but not limited to .”
Patrice L. Goldman, Individually & on Behalf of Others Similarly Situated v. Stand. Ins. Co., 341 F.3d 1023 (9th Cir. 2003). “The Unruh Act applies to insurance companies, see Cal. Ins.Code § 1861.03(a) (West 2003), and an insurance company’s refusal to provide coverage on the basis of disability may constitute a denial of “full and equal .”
Clarendon Nat'l Ins. v. Ins. Co. of the West, 442 F. Supp. 2d 914 (E.D. Cal. 2006). “Although a statute limits the grounds upon which an insurer may cancel automobile insurance for nonpayment of premiums, fraud, or material misrepresentation affecting the policy or the insured, or a substantial increase in the hazard insured against, Cal.Ins.Code § 1861.03(c),…”
Show all 26 citing cases →
— Cal. Insurance Code § 1861.03(a) — 6 cases
Ellsworth v. U.S. Bank, N.A., 908 F. Supp. 2d 1063 (N.D. Cal. 2012). “Another provision provides that “[t]he business of insurance shall be subject to the laws of California applicable to any other business, including, but not limited to .”
Patrice L. Goldman, Individually & on Behalf of Others Similarly Situated v. Stand. Ins. Co., 341 F.3d 1023 (9th Cir. 2003). “The Unruh Act applies to insurance companies, see Cal. Ins.Code § 1861.03(a) (West 2003), and an insurance company’s refusal to provide coverage on the basis of disability may constitute a denial of “full and equal .”
Leghorn v. Wells Fargo Bank, N.A., 950 F. Supp. 2d 1093 (N.D. Cal. 2013).
Wilson v. Avemco Ins., 59 F. App'x 928 (9th Cir. 2003).
Sarah Perez v. State Farm Mut. Auto. I, 391 F. App'x 653 (9th Cir. 2010).
— Cal. Insurance Code § 1861.03(c) — 1 case
Clarendon Nat'l Ins. v. Ins. Co. of the West, 442 F. Supp. 2d 914 (E.D. Cal. 2006). “Although a statute limits the grounds upon which an insurer may cancel automobile insurance for nonpayment of premiums, fraud, or material misrepresentation affecting the policy or the insured, or a substantial increase in the hazard insured against, Cal.Ins.Code § 1861.03(c),…”
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