The California Department Of Insurance Must Now Screen All New Disability Insurance Polices
By Bennett Cohen of Bennett M. Cohen, Attorney at Law posted in Bad Faith Insurance on Monday, November 3, 2014.
November 1, 2014
The California Department Of Insurance Must Now Screen All New Disability Insurance Polices For Deceptive And Illegal Provisions Before They May Be Sold In California
On October 1, 2014, in a case handled by this office — and a case of first impression in the state and maybe nationwide, the California Court of Appeals ruled that the California Department of Insurance, the state agency that oversees insurance companies, must protect consumers from deceptive or illegal disability policies by screening all new policies before they may be sold in the state.
The opinion, Ellena v. Department of Insurance can be downloaded at: http://www.courts.ca.gov/opinions/documents/A137268.PDF
The California appellate court reversed the lower court’s ruling dismissing the case against the Department of Insurance and rejecting its position that it had no duty to review new policies to determine compliance with state law. In so ruling, the appellate court characterized the oversight function of the Department of Insurance as a matter of “great public interest” and noted that the Department of Insurance had the express statutory mission to review new policies to protect consumers.
As a result of this decision, fewer rotten disability policies should be sold to California in California. However, the extent to which this decision results in greater protection for consumers and policyholders is now in the hands of the Department of Insurance.
Other law offices and entities have written interesting and informative comments about this decision. See for example: