Section 676.2.
Cal. Insurance Code - INS § 676.2.
in effect(a)
This section applies only to policies of commercial insurance that are subject to Section 675.5.
(b)
After a policy has been in effect for more than 60 days, or if the policy is a renewal, effective immediately, no notice of cancellation shall be effective unless it complies with Section 677.2 and it is based on the occurrence, after the effective date of the policy, of one or more of the following:
(1)
Nonpayment of premium, including payment due on a prior policy issued by the insurer and due during the current policy term covering the same risks.
(2)
A judgment by a court or an administrative tribunal that the named insured has violated any law of this state or of the United States having as one of its necessary elements an act that materially increases any of the risks insured against.
(3)
Discovery of fraud or material misrepresentation by either of the following:
(A)
The insured or the insured’s representative in obtaining the insurance.
(B)
The named insured or the named insured’s
representative in pursuing a claim under the policy.
(4)
Discovery of willful or grossly negligent acts or omissions, or of any violations of state laws or regulations establishing safety standards, by the named insured or the named insured’s representative, which materially increase any of the risks insured against.
(5)
Failure by the named insured or the named insured’s representative to implement reasonable loss control requirements that were agreed to by the insured as a condition of policy issuance or that were conditions precedent to the use by the insurer of a particular rate or rating plan, if the failure materially increases any of the risks insured against.
(6)
A determination by the
commissioner that the loss of, or changes in, an insurer’s reinsurance covering all or part of the risk would threaten the financial integrity or solvency of the insurer. A certification made under penalty of perjury to the commissioner by an officer of the insurer of the loss of, or change in, reinsurance and that the loss or change will threaten the financial integrity or solvency of the insurer if the cancellation of the policy is not permitted shall constitute this determination unless disapproved by the commissioner within 30 days of the filing. There shall be no extensions to this 30-day period.
(7)
A determination by the commissioner that a continuation of the policy coverage would place the insurer in violation of the laws of this state or the state of its domicile or that the continuation of coverage would threaten the solvency of
the insurer.
(8)
A change by the named insured or the named insured’s representative in the activities or property of the commercial or industrial enterprise that results in a material added risk, a materially increased risk, or a materially changed risk, unless the added, increased, or changed risk is included in the policy.
(c)
(1)
After a policy has been in effect for more than 60 days, or if the policy is a renewal, effective immediately upon renewal, no increase in the rate upon which the premium is based, reduction in limits, or change in the conditions of coverage shall be effective during the policy period unless a written notice is mailed or delivered to the named insured and the producer of record at the mailing address shown on the policy, at least 30 days
prior to the effective date of the increase, reduction, or change.
The time periods and procedures in subdivision (a) of Section 1013 of the Code of Civil Procedure shall be applicable if the notice is mailed. The notice shall state the effective date of, and the reasons for, the increase, reduction, or change.
(2)
The increase, reduction, or change shall not be effective unless it is based upon one of the following reasons:
(A)
Discovery of willful or grossly negligent acts or omissions, or of any violations of state laws or regulations establishing safety standards by the named insured that materially increase any of the risks or hazards insured against.
(B)
Failure by the named insured to implement reasonable loss control requirements that were agreed to by the insured as a condition
of policy issuance or that were conditions precedent to the use by the insurer of a particular rate or rating plan, if the failure materially increases any of the risks insured against.
(C)
A determination by the commissioner that loss of or changes in an insurer’s reinsurance covering all or part of the risk covered by the policy would threaten the financial integrity or solvency of the insurer unless the change in the terms or conditions or rate upon which the premium is based is permitted.
(D)
A change by the named insured in the activities or property of the commercial or industrial enterprise that results in a materially added risk, a materially increased risk, or a materially changed
risk, unless the added, increased, or changed risk is included in the policy.
(E)
With respect to a change in the rate of a policy of professional liability insurance for a health care provider, the insurer’s offer of renewal notifies the policyholder that the insurer has an application filed pursuant to Section 1861.05 pending with the commissioner for approval of a change in the rate upon which the premium is based, and the commissioner subsequently approves the rate change, or some different amount for the policy period. The change shall not be retroactive.
(d)
The Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340), Chapter 4 (commencing with Section 11370), and Chapter 5 (commencing with Section 11500) of Title 2 of Division 3 of the
Government Code) shall not apply to a determination pursuant to paragraph (6) or (7) of subdivision (b) or subparagraph (C) of paragraph (2) of subdivision (c). The commissioner shall charge an insurer who requests a determination pursuant to paragraph (6) or (7) of subdivision (b) a fee sufficient to recover the costs of making the determination. If the commissioner does not act upon a request by an insurer to cancel or change a policy pursuant to those provisions within 30 days, the request shall be deemed to be approved.
(e)
This section shall not prohibit an insurer from increasing a premium during the policy period if the increase is calculated in accordance with the current rating manual of the insurer and is justified by a physical change in the insured property or by a change in the activities of the commercial or industrial
enterprise that materially increases any of the risks insured against.
(f)
This section shall not apply to a transfer of a policy without a change in its terms or conditions or the rate upon which the premium is based between insurers that are members of the same insurance group.
References
referencesCal. Government Code - GOV § 11500.
referencesCal. Insurance Code - INS § 675.5.
referencesCal. Insurance Code - INS § 677.2.
referencesCal. Insurance Code - INS § 1013.
referencesCal. Insurance Code - INS § 1861.05.
referencesCal. Insurance Code - INS § 11340.
referencesCal. Insurance Code - INS § 11370.
Source: CA Legislative Counsel Bulk DataURL: https://downloads.leginfo.legislature.ca.gov/pubinfo_2025.zipFetched: 6/27/2026