BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 1130
                                                                  Page  1

          Date of Hearing:   May 15, 2013

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                    AB 1130 (Wilk) - As Amended:  April 18, 2013 

          Policy Committee:                              InsuranceVote:13  
          - 0 

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              

           SUMMARY  

          This bill exempts foreign applicants for a home protection  
          insurance 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 insurance companies:

          1)Filing a financial statement certified by their domestic  
            regulator.

          2)Filing a report of examination by the insurance regulator in  
            their home state.

          3)Holding a certificate of authority as an insurance company.

           FISCAL EFFECT  

          Costs associated with this legislation should be minor and  
               absorbable within existing resources. 

           COMMENTS  

           1)Purpose  . According to the author, existing law creates an  
            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  








                                                                  AB 1130
                                                                  Page  2

            time-consuming process of obtaining licensure as a California  
            insurer.  

           2)Home Protection Company  .  A home protection company is a  
            company that sells a warranty to home owners that provides for  
            the repair or replacement of any part of their home for a  
            specified period of time. These warranties are often sold to  
            home buyers as part of the process of purchasing a new home.   
            These home protection companies are required to be licensed  
            and regulated by the Department of Insurance.

           Analysis Prepared by  :    Julie Salley-Gray / APPR. / (916)  
          319-2081