Amended in Assembly April 18, 2013

Amended in Assembly March 21, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 1130

Introduced by Assembly Member Wilk

February 22, 2013

An act to amend Section begin delete 12743 end delete begin insert 12744 end insert of the Insurance Code, relating to insurance.

LEGISLATIVE COUNSEL’S DIGEST

AB 1130, as amended, Wilk. Insurance: home protection contracts.

Existing law governs home protection contracts for the repair or replacement of a component, system, or appliance of a home. Existing law begin delete makes various provisions of the Insurance Code applicable to those contracts, including provisions governing reinsurance transactions and actions, suits, or proceedings against nonadmitted insurers end delete begin insert prohibits a person from issuing or offering to issue home protection contracts in this state unless the person holds a home protection company license issued by the Department of Insurance, except as specified end insert .

begin delete

This bill would delete provisions governing reinsurance transactions and actions against nonadmitted insurers from the list of Insurance Code provisions that are applicable to home protection contracts.

end delete begin delete

This bill would also make technical, nonsubstantive changes to that provision.

end delete begin insert

This bill would provide that certain requirements for a home protection company license do not apply to a foreign applicant, including filing a financial statement certified by the applicant’s home state regulatory official as a true and correct copy of the statement filed with that official, and holding a certificate of authority as an insurance company, only if the applicant stipulates that the applicant will provide financial reports in the same manner required of domestic home protection companies.

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Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

end insert

begin insert Section 12744 of the end insert begin insert Insurance Code end insert begin insert is amended
to read: end insert

12744.  

(a) No person shall issue or offer to issue home
protection contracts in this state unless begin delete such end delete begin insert the end insert person holds a
home protection company license issued by the department, except
as provided in subdivision (b) of this section.

(b) An insurer admitted for the class of insurance defined in
Section 120 is authorized, in addition to the underwriting powers
granted by begin delete such end delete begin insert the end insert class, to issue home protection contracts, but
the provisions of this part shall not be otherwise applicable to begin delete such end delete
begin insert those end insert insurers or their contracts.

(c) No license shall be granted to a foreign applicant that has
not fulfilled the requirements of Sections 716 and 717. For
purposes of this part, the term “class of insurance” as used in said
sections shall mean the business of a home protection company.
This section shall not prohibit the admission of a foreign home
protection company which has actively transacted home protection
business in its state of domicile for three years or more.

(d) The commissioner shall by regulation prescribe forms for
applications for home protection company licenses consistent with
the provisions of this part. Any reference to certificate of authority
in Article 3 (commencing with Section 699) of Chapter 1 of Part
2 of Division 1, shall mean home protection company license.

begin insert

(e) (1) Subject to paragraph (2) and, notwithstanding
subdivision (c) or any regulation to the contrary, the following
requirements shall not apply to any foreign applicant:

end insert begin insert

(A) Filing a financial statement certified by the applicant’s
home state regulatory official as a true and correct copy of the
statement filed with that official. This exemption applies only if
the official does not require a home protection company or the
applicant to file a financial statement.

end insert begin insert

(B) Filing an examination report certified by the applicant’s
home state regulatory official as a true and correct copy. This
exemption applies only if the official does not prepare examination
reports of home protection companies or has not prepared an
examination report of the applicant.

end insert begin insert

(C) Holding a certificate of authority as an insurance company.

end insert begin insert

(2) The exemptions described in paragraph (1) apply only if the
applicant’s chief executive officer stipulates that the company will
provide financial reports in the same manner required of domestic
home protection companies.

end insert

begin delete

SECTION 1.  

Section 12743 of the Insurance Code is amended
to read:

12743.  

The following provisions of this code shall be applicable
to home protection contracts and home protection companies:

(a) Sections 1 to 46, inclusive.

(b) Chapter 3 (commencing with Section 330) of Part 1, Division
1.

(c) Chapter 12 (commencing with Section 679.70) of Part 1,
Division 1.

(d) These provisions of Chapter 1, Part 2, Division 1:

(1) Article 1 (commencing with Section 680).

(2) Article 1.5 (commencing with Section 685).

(3) Article 2 (commencing with Section 690).

(4) Section 699, 699.5, 700, 701, 704, 704.5, 704.7, 705, 705.1,
707, 708, 709, 710, 713, 714, 715, 716, 717, 718, 720, and 725 of
Article 3 (commencing with Section 699).

(5) Section 750.

(6) Article 5.5 (commencing with Section 770).

(7) Article 6.5 (commencing with Section 790).

(8) Article 8 (commencing with Section 820).

(9) Article 9 (commencing with Section 880).

(10) Article 11 (commencing with Section 939).

(11) Article 13 (commencing with Section 980).

(12) Article 14 (commencing with Section 1010).

(13) Article 14.5 (commencing with Section 1065.1).

(14) Article 15 (commencing with Section 1070).

(15) Article 16 (commencing with Section 1080).

(16) Article 17 (commencing with Section 1100).

(e) These provisions of Chapter 2, Part 2, Division 1:

(1) Article 1 (commencing with Section 1140).

(2) Article 2 (commencing with Section 1152).

(3) Article 3 (commencing with Section 1170).

(4) Article 4 (commencing with Section 1190).

(5) Article 4.7 (commencing with Section 1215).

(6) Article 7 (commencing with Section 1250).

(f) Article 3 (commencing with Section 1631) of Chapter 5 of
Part 2 of Division 1.

(g) Sections 1850.5, 1853.5, 1853.8, 1857, 1857.2, 1857.3,
1857.4, 1858, 1858.05, 1858.1, 1858.15, 1858.2, 1858.3, 1858.4,
1858.5, 1858.6, 1858.7, 1859, 1859.1, 1860, 1860.1, 1860.2 of
Chapter 9, Part 2, Division 1.

(h) Division 3 (commencing with Section 12900).

(i) In any references in the provisions made applicable to this
part by subdivisions (a) to (h) inclusive of this section:

(1) “Insurer” shall mean home protection company.

(2) “Insured” shall mean a home protection contract holder.

(3) “Premium” shall mean protection contract fee.

(4) “Policy” or “insurance” shall mean home protection contract.

(j) When any provision of this code, other than this part, is
applied to home protection companies, such provision shall be
construed in accordance with the nature of home protection
companies and the home protection business. In the event of any
conflict between such other provision and this part, this part shall
prevail.

end delete