COSGROVE v. BANKERS LIFE CASUALTY COMPANY (1986)

In 1981 plaintiff's employer took out a group medical and hospital insurance policy covering its employees with defendant insurance company.   Although plaintiff could have had his wife covered under that policy he did not because she was employed by another firm which also had a similar policy covering her and the plaintiff saw no reason to incur the extra expense of listing her under defendant's policy.

In 1983 a son was born to plaintiff and his wife.   Plaintiff notified the defendant company and sought to have the son covered under the policy insured by defendant insurance company.   The company refused to insure the baby without proof of insurability.   Plaintiff claims that, under the provisions of section 10119 of the California Insurance Code, he was entitled to have his son covered under the policy immediately upon his birth and without proof of insurability.

 The trial court sustained a demurrer to his complaint interpreting the controlling statute as providing for automatic coverage of the son only if the wife were insured under the policy.   We disagree.   That statute reads as follows:

“On and after the operative date of this section:

“(a) No policy of disability insurance which, in addition to covering the insured, also covers members of the insured's immediate family, may be issued or amended in this state if it contains any disclaimer, waiver, or other limitation of coverage relative to the accident and sickness coverage or insurability of newborn infants of an insured from and after the moment of birth.

“(b) Each such policy of disability insurance shall contain a provision granting immediate accident and sickness coverage, from and after the moment of birth, to each newborn infant of any insured.”

As we read the statute, the policy issued to plaintiff falls within the statute's provisions.   Although the wife was, in fact, not covered under the policy that policy provided for coverage of all the family members and that is all that the statute requires.

 The insurance company here makes the contention that the policy purchased by plaintiff's employer was a “medical and hospital insurance policy,” whereas the statute talks about a “disability” policy.   We regard the difference in phraseology as unimportant.   A reading of the applicable provisions of the Insurance Code makes it clear that a “disability policy” is a “medical and hospital policy.”

It is of the very nature of these medical insurance policies that no proof of insurability of any particular person is involved.   The insurer, relying on the fact that an entire group is covered, is willing to gamble its duty of protection even though some members of the group could not individually procure such policy.

The order is reversed.

KINGSLEY, Acting Presiding Justice.

McCLOSKY and ARGUELLES, JJ., concur.