A glossary of some of the more commonly used terms contained in, or used to describe insurance policies according the the California insurance department. This glossary is intended to provide general information only and specifically applies to California insurance matters (other state insurance departments may use slightly different terms.)
The purpose of this article is to regulate trade practices in the business of insurance in accordance with the intent of Congress as expressed in the Act of Congress of March 9, 1945 (Public Law 15, Seventy-ninth Congress), by defining, or providing for the determination of, all such practices in this State which constitute unfair methods of competition or unfair or deceptive acts or practices and by prohibiting the trade practices so defined or determined.
Unfortunately, for many who suffer a disability — even a disability that has been medically proven, initial claims are more often denied than approved. This sounds like a terribly unfair situation, and until 2012, insurance companies were allowed to simply deny your claim based on “discretionary clauses” that allowed an insurer to simply claim a policyholder was not disabled and therefore, not entitled to their benefits. This sort of disability insurance claim practice was entirely legal – and unfortunately all too common in the state of California, and so in the fall of 2011, California passed a law outlawing “discretionary clauses” in disability and life insurance policies.
California Governor Jerry Brown signed AB 1232 into law, enacting new provisions relating to disability rights. The new law strengthens the Lanterman Developmental Disabilities Services Act of 1969, a landmark disabilities law that enforces the rights of the disabled and their families to have access to the same services and supports as people without disabilities have. AB 1232, sponsored by Asm. V. Manuel Pérez, allows for an improved quality assessments system to better address and serve the needs of California’s multicultural society.