Bill Text: CA AB1130 | 2013-2014 | Regular Session | Chaptered
Bill Title: Insurance: home protection contracts.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2014-09-15 - Chaptered by Secretary of State - Chapter 324, Statutes of 2014. [AB1130 Detail]
Download: California-2013-AB1130-Chaptered.html
BILL NUMBER: AB 1130 CHAPTERED
BILL TEXT
CHAPTER 324
FILED WITH SECRETARY OF STATE SEPTEMBER 15, 2014
APPROVED BY GOVERNOR SEPTEMBER 15, 2014
PASSED THE SENATE AUGUST 13, 2014
PASSED THE ASSEMBLY AUGUST 20, 2014
AMENDED IN SENATE JUNE 30, 2014
AMENDED IN ASSEMBLY APRIL 18, 2013
AMENDED IN ASSEMBLY MARCH 21, 2013
INTRODUCED BY Assembly Member Wilk
FEBRUARY 22, 2013
An act to amend Sections 12744 and 12752 of the Insurance Code,
relating to insurance.
LEGISLATIVE COUNSEL'S DIGEST
AB 1130, 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 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.
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.
Existing law also requires each home protection company to file
statements exhibiting its conditions and affairs, as specified.
Existing law authorizes the commissioner, prior to licensure and at
other times as appears necessary, to examine the business and affairs
of any home protection company, as specified.
This bill would instead require each home protection company to
file a single annual statement exhibiting its conditions and affairs.
The bill would also prohibit the commissioner from conducting more
than one financial examination of a company in any 5-year period,
unless the commissioner makes a specified finding.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 12744 of the Insurance Code is amended to read:
12744. (a) No person shall issue or offer to issue home
protection contracts in this state unless the 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 the class, to issue home protection contracts, but the
provisions of this part shall not be otherwise applicable to those
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
that 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.
(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:
(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.
(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.
(C) Holding a certificate of authority as an insurance company.
(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.
SEC. 2. Section 12752 of the Insurance Code is amended to read:
12752. (a) Each home protection company shall file an annual
statement exhibiting its conditions and affairs in accordance with
Sections 900, 900.5, 900.8, 900.9, 902, 903, 903.5, 904, 922.1 to
922.8, inclusive, 923, 923.5, and 924. However, the required contents
of the annual statement may be varied from the requirements thereof,
pursuant to regulation adopted by the commissioner in accordance
with Chapter 3.5 (commencing with Section 11340) of Part 1 of
Division 3 of Title 2 of the Government Code, so as to adapt the
requirements to the home protection business. Nothing in this
subdivision shall be construed to limit the authority of the
commissioner to request financial statements from licensees at any
time.
(b) The commissioner shall, prior to licensure and at other times
as appears necessary, examine the business and affairs of any home
protection company subject to this part. Every home protection
company so examined shall open its books and records for inspection
by the commissioner and shall otherwise facilitate and cooperate in
the examination. In making the examination, the commissioner shall
have the rights specified in Section 733, and the examinee shall be
subject to the obligations of Section 736. The commissioner shall not
conduct more than one financial examination of a company in any
five-year period, unless the commissioner finds that the financial
condition of the company has deteriorated, thereby warranting an
interim examination.
