Cal. Code Regs. tit. 10 § 2274.53

Current through Register 2024 Notice Reg. No. 45, November 8, 2024

Section 2274.53 - Grace Period

For purposes of Insurance Code sections 10273.4, 10273.6 and 10713:

(a) The minimum 30-day grace period shall end no sooner than the thirtieth day following the last day of coverage for which the insurer has received payment.

(b) In order for a policyholder, certificate holder or other insured to have been "duly notified," the insurer must have sent to the policyholder, certificate holder or other insured a notice of intent to nonrenew due to nonpayment:

(1) After a sufficient interval of time has passed since the sending of the initial premium billing statement to make it possible, in the ordinary course, for:

(A) The policyholder, certificate holder or other insured to receive the billing statement,

(B) The policyholder, certificate holder or other insured to send the required premium payment to the insurer, and

(C) The insurer to receive the premium payment; but

(2) No later than the first day after the last day of coverage for which the insurer has received payment. However, an insurer may also satisfy the requirement stated in this Paragraph (b)(2) of this Section 2274.53 by:

(A) Sending the notice of intent to nonrenew due to nonpayment after the first day after the last day of coverage for which the insurer has received payment, and

(B) Providing a grace period that:

1. Begins on the first day after the last day of coverage for which the insurer has received payment and

2. Extends through the last day of the 30-day period whose first day is the day the insurer sends the notice of intent to nonrenew due to nonpayment.

(c) The notice of intent to nonrenew due to nonpayment required by subdivision (b) of this section must provide instructions for making the premium payment necessary in order to maintain coverage in force.

(d) In the event the necessary premium payment is delivered to the insurer on or before the last day of the minimum 30-day grace period, the insurer shall continue coverage beyond the grace period without interruption pursuant to the terms of the policy or certificate.

(e) This Section 2274.53 shall not be construed to require that the insurer send the notice of intent to nonrenew due to nonpayment required by subdivision (b) of this section to:

(1) Employee certificate holders under a group policy; or

(2) Dependents of the policyholder, or insureds other than the policyholder, under an individual policy.

Cal. Code Regs. Tit. 10, § 2274.53

1. New section filed 11-20-2013; operative 1-1-2014 (Register 2013, No. 47).

Note: Authority cited: Sections 10273.7 and 12926, Insurance Code; CalFarm Ins. Co. v. Deukmejian, 48 Cal.3d 805 (1989) and 20th Century Ins. Co. v. Garamendi, 8 Cal. 4th 216 (1994). Reference: Sections 10273.4, 10273.6, 10273.7, 10384, 10384.17 and 10713, Insurance Code.

1. New section filed 11-20-2013; operative 1-1-2014 (Register 2013, No. 47).