re: California Law - California State Insurance Code
Non-profit engineering society is in process of developing some new categories of benefits for members. One benefit will be, hopefully, business
insurance. Other professional groups (including I believe The Bar
Association) offer some good business insurance rates that are available to "members only" i.e. same lower-cost rates are not available to non-members -- even for individual policies.
Some similar groups have told me that if you are a member of their professional group, and enroll for an individual business insurance policy that covers property/casualty and errors & omissions liability insurance, and then later, decide to drop your membership in the group that the group's business insurance provider can then (with proper notice as governed by state insurance codes), Non-Renew your policy for not being a group member. That seems correct from my research, but I can't find the "law" for California on this issue. Our NP group could not justify time & expense of developing a good business insurance (not health insurance) program for members only to find that there is no recourse with people who just become a member for a short time "to get the business insurance" -- then drop their membership and continue right along keeping the business insurance. Also non-members on the program could create a liability for members, since non-members don't have to abide by the NP group's Code of Ethics
Therefore, is it lawful in California, per California State Insurance Code for a Business Insurance provider/carrier to Non-Renew a policy-holder for the reason of non-membership? (this pertains only to a "Notice of Non-Renewal" -- not a "Cancellation" of the business policy). From all that I have read so far, it seems that non-renewal IS permissible so long as proper notice has been provided in advance, along with the reason for non-renewal, etc. Is that correct for California?