BILL ANALYSIS �
AB 1130
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Date of Hearing: April 24, 2013
ASSEMBLY COMMITTEE ON INSURANCE
Henry T. Perea, Chair
AB 1130 (Wilk) - As Amended: April 18, 2013
SUBJECT : Home Protection Companies
SUMMARY : Streamlines the application process required of
out-of-state applicants for a home protection company license.
Specifically, this bill :
1)Exempts foreign applicants for a home protection company
license from the following requirements if the chief executive
officer agrees to provide the Department of Insurance the same
financial reports required of domestic home protection
companies:
a) Filing a financial statement certified by their
domestic regulator.
b) Filing a report of examination by the insurance
regulator in their home state.
c) Holding a certificate of authority as an insurance
company.
EXISTING LAW :
1)Defines "home protection company" as a company that sells a
product to home owners that provides for the repair or
replacement of any part of their home for a specified period
of time.
2)Requires home protection companies to be licensed and
regulated by the Department of Insurance.
3)Requires home protection companies to comply with numerous
statutes governing insurance companies.
FISCAL EFFECT : Unknown
COMMENTS :
1)Purpose . According to the author, existing law creates an
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expensive and unnecessary roadblock for existing home
protection companies in other states to obtain a license in
California, if the out of state company is not licensed as an
insurer in the company's home state. In many states home
protection companies are regulated by the state attorney
general or consumer affairs or real estate regulators. In
these cases, even applicants who have solid experience in many
states are required to undergo the expensive and
time-consuming process of obtaining licensure as a California
insurer. The sponsor is working with the Department of
Insurance to permit companies operating in other states to
offer home protection contracts in California without
obtaining a separate certificate of authority here.
More broadly, AB 1130 represents a continuing dialogue with
the Department of Insurance over the regulation of existing
home protection companies. While consumer protection is
appropriately the paramount concern of the Department in
regulating home protection companies, the sponsor is working
with the Department of Insurance collaboratively to identify
areas of insurance regulation which may be unnecessary given
the limited nature of home protection contracts.
2)Department of Insurance Approval Delays . It is common for the
department to take years to review and approve license
applications for companies seeking to do business in
California. Similar delays occur when licensed companies seek
to make changes in existing policies offered in California or
bring products offered in other states to California.
REGISTERED SUPPORT / OPPOSITION :
Support
National Home Service Contract Association
Opposition
None received
Analysis Prepared by : Paul Riches / INS. / (916) 319-2086
AB 1130
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