BILL ANALYSIS Ó
AB 1130
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CONCURRENCE IN SENATE AMENDMENTS
AB 1130 (Wilk)
As Amended June 30, 2014
Majority vote
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|ASSEMBLY: |78-0 |(May 30, 2013) |SENATE: |32-0 |(August 13, |
| | | | | |2014) |
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Original Committee Reference: INS.
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.
The Senate Amendments :
1)Reduce the frequency, from quarterly to annually, with which
home protection companies must file certain financial reports
with the Insurance Commissioner.
2)Provide that the Insurance Commissioner cannot conduct a
routine financial examination of a home protection company
more than once every five years unless the company's financial
condition has deteriorated.
3)Make minor technical changes.
EXISTING LAW :
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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 file quarterly financial
statements with the Insurance Commissioner.
4)Requires the Insurance Commissioner to conduct an examination
of home protection companies prior to licensure and as needed
thereafter.
FISCAL EFFECT : According to the Senate Appropriations
Committee, minor and absorbable costs for the Department of
Insurance.
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
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, this bill represents a continuing dialogue with
the Department of Insurance regarding the regulation of
existing home protection companies. While consumer protection
is appropriately the paramount concern of the Department of
Insurance 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
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contracts.
Analysis Prepared by : Paul Riches / INS. / (916) 319-2086
FN: 0004474