Final answer:
The best definitions of 'shall' and 'may' in the California Insurance Code are mandatory and permissive,(option D) respectively. These terms are not mutually exclusive and can be used within the same provision of the law.
Step-by-step explanation:
The best definitions of 'shall' and 'may' in the California Insurance Code are mandatory and permissive, respectively. 'Shall' typically indicates a requirement or obligation, while 'may' indicates a possibility or option. These terms are not mutually exclusive, meaning that in some cases, both 'shall' and 'may' can be used within the same provision of the law. For example, a provision may state that an insurer 'shall' provide coverage for certain types of claims, while also stating that the insurer 'may' deny coverage under specific circumstances.