California Code of Regulations
Title 10 - Investment
Chapter 5 - Insurance Commissioner
Subchapter 3 - Insurers
Article 9 - Workers' Compensation Insurance. Dividends (Refunds) to Policyholders. Regulations Governing Classification of Risks and Premium Rates, Policy and Endorsement Forms
Section 2508 - Group Policies-Reduction or Forfeiture of Member's Right to Distribution of Dividend Funds
To avoid any coercion or possible misrepresentation of dividends that may be paid to members of organizations or associations of employers insured under group workers' compensation policies, no group policy shall be issued, unless the articles of incorporation, by-laws, agreements of association, or rules and regulations filed pursuant to Insurance Code Section 11656.6 shall provide that (1) any distribution of funds to any member, derived from a dividend, shall not be reduced or forfeited except for reasons set forth in the articles of incorporation, by-laws, agreements of association, or rules and regulations, and (2) no such reduction or forfeiture shall be made effective unless the reasons for such reductions or forfeiture have been made known by written communication to the member prior to inception of his insurance coverage during the policy period for which such dividend adjustment is made.
1. Change without
regulatory effect amending section and adding new NOTE filed 1-8-2015 pursuant to
section 100, title 1, California Code of
Regulations (Register 2015, No. 2).
2. Amendment filed 5-31-2016;
operative 7-1-2016 (Register 2016, No. 23).
Note: Authority cited: Section 790.10, Insurance Code. Reference: Sections 780, 781, 790.03 and 11656.6, Insurance Code.
