text:
(a) The Managed Risk Medical Insurance Board shall report to the Legislature on or before January 30, 2004, the following information with respect to the State Children’s Health Insurance Program:

(1) A list of the categories of vulnerable children who should be the targets of public health initiatives, including, but not limited to, immigrant children, homeless children, and other children that face health disparities.

(2) Recommendations on innovative methods available under the federal program for addressing health needs and barriers to care for the identified groups of vulnerable children. The board shall report as many recommendations as possible that are available under the federal program and the expected impact of each recommendation.

(3) Recommendations on innovative methods available under the federal program for developing in urban areas initiatives similar to the rural demonstration projects. The board shall report as many recommendations as possible that are available under the federal program and the expected impact of each recommendation.

(b) The board shall seek input, at regularly scheduled meetings of the board, from the Healthy Families Advisory Panel and stakeholder organizations, including, but not limited to, organizations that represent immigrant and homeless populations, other communities that experience health disparities, and traditional providers of care to low-income populations.

(c) This section shall be implemented only to the extent that federal financial participation is obtained.

history: (History: Added by Stats. 2002, Ch. 800, Sec. 2. Effective January 1, 2003.)


kind: section

code: INS

text:
(a) (1) The Healthy Families-to-Medi-Cal Bridge Benefits Program is hereby established to provide any person enrolled for coverage under this part who meets the criteria set forth in subdivision (b) with a two calendar-month period of health care benefits in order to provide the person with an opportunity to apply for Medi-Cal.

(2) The Healthy Families-to-Medi-Cal Bridge Benefits Program shall be administered by the board.

(b) (1) Any person who meets all of the following requirements shall be eligible for two additional calendar months of Healthy Families benefits:

(A) He or she has been receiving, but is no longer eligible for, benefits under the program.

(B) He or she appears to be income eligible for full-scope Medi-Cal benefits without a share of cost.

(2) The two additional calendar months of benefits under this chapter shall begin on the first day of the month following the last day of the person’s eligibility for benefits under the program.

(c) The two-calendar-month period of Healthy Families benefits provided under this chapter shall be identical to the scope of benefits that the person was receiving under the program.

(d) Nothing in this section shall be construed to provide Healthy Families benefits for more than a two calendar-month period under any circumstances, including the failure to apply for benefits under the Medi-Cal program or the failure to be made aware of the availability of the Medi-Cal program unless the circumstances described in subdivision (b) reoccur.

(e) This section shall become inoperative if an unappealable court decision or judgment determines that any of the following apply:

(1) The provisions of this section are unconstitutional under the United States Constitution or the California Constitution.

(2) The provisions of this section do not comply with the State Children’s Health Insurance Program, as set forth in Title XXI of the federal Social Security Act.

(3) The provisions of this section require that the health care benefits provided pursuant to this section are required to be furnished for more than two calendar months.

(f) The board shall cease to provide the benefits described in this section to any additional individuals on the date that the State Department of Health Care Services implements the presumptive eligibility program established pursuant to Section 14011.65b of the Welfare and Institutions Code and the Director of Health Care Services executes a declaration pursuant to subdivision (d) of that section stating that the program of presumptive eligibility has commenced. The board shall consult and coordinate with the State Department of Health Care Services in implementing presumptive eligibility under Section 14011.65b of the Welfare and Institutions Code for these individuals.

(g) This section shall be repealed six months after the board ceases to provide benefits to additional individuals pursuant to this section.

history: (History: Amended by Stats. 2007, Ch. 188, Sec. 20. Effective August 24, 2007. Repealed as of date prescribed by its own provisions.)

division: 2. CLASSES OF INSURANCE

part: 6.2. HEALTHY FAMILIES

path: 2. CLASSES OF INSURANCE > 6.2. HEALTHY FAMILIES > 16.1. Healthy Families Bridge Benefits Program


text: For purposes of this chapter, “Medi-Cal” means the state health care program established pursuant to Chapter 14 (commencing with Section 14000) of Part 3 of Division 9 of the Welfare and Institutions Code.

history: (History: Added by Stats. 2001, Ch. 171, Sec. 17. Effective August 10, 2001.)

chapter: 16.1. Healthy Families Bridge Benefits Program


text:
(a) The board and the department, in collaboration with program offices for the California Special Supplemental Food Program for Women, Infants, and Children (WIC or the WIC program), local WIC agencies, counties in their capacity of making Medi-Cal eligibility determinations, advocates, information technology specialists, and other stakeholders, shall design, promulgate, and implement policies and procedures for an automated enrollment gateway system developed by the department and the board that performs, but is not limited to performing, the following functions:

(1) To the extent that federal financial participation is available, allowing children applying to the WIC program to submit a simple electronic application to simultaneously obtain presumptive eligibility for Medi-Cal and Healthy Families under Title XIX (42) U.S.C. 1396 et seq.) and Title XXI (42 U.S.C. 1397aa et seq.) of the Social Security Act and apply for enrollment into the Medi-Cal program or the Healthy Families Program with the consent of their parent or guardian.

(2) Modify the existing WIC enrollment system to obtain the minimum required data for enrollment in Medi-Cal and Healthy Families in order to provide an electronic transactional platform that is connected to the simple electronic application referenced in paragraph (1) and allowing for an interface between that application, the Medi-Cal Eligibility Data System (MEDS), and the Medi-Cal program or the Healthy Families Program, as relevant.

(3) Providing an automated real-time connection with MEDS for the purpose of checking an applicant’s enrollment status.

(4) Allowing for the electronic transfer of information to the Medi-Cal program or the Healthy Families Program, as relevant, for the purpose of making the final eligibility determination.

(5) Checking, as relevant, available government databases for the purpose of electronically receiving information that is necessary to allow the Medi-Cal program or the Healthy Families Program to complete the eligibility determination. The department and the Managed Risk Medical Insurance Board shall comply with all applicable privacy and confidentiality provisions under federal and state law.

(b) The automated enrollment gateway system shall be constructed with the capacity to be used by entities operating the WIC program.

(c) The WIC application process shall be modified to provide an electronic application described in subdivision (a), which shall contain the information necessary to apply for the automated enrollment gateway system, supplemented by information required to apply for enrollment into the Medi-Cal program or the Healthy Families Program.

(d) Benefits for applicants opting to simultaneously obtain presumptive eligibility for enrollment under this section shall continue until a final eligibility determination is made for the Medi-Cal program or the Healthy Families Program pursuant to Section 14011.8 of the Welfare and Institutions Code.

(e) Operation of the automated enrollment gateway system for the WIC program shall occur within a timely and appropriate period as determined by the department and the board, in consultation with the stakeholders as provided in subdivision (a) subject to a specific appropriation being provided for that purpose in the Budget Act or in subsequent legislation. The automated enrollment gateway system shall comply with all applicable confidentiality and privacy protection in federal and state law and regulation.

(f) The WIC program shall collect income and residency information necessary for the Medi-Cal program and the Healthy Families Program documentation requirements for applications submitted through the automated enrollment gateway system. To the extent allowed by the federal government, the Medi-Cal and Healthy Families programs shall rely on income information obtained by WIC and upon the income verification process performed by WIC. The Medi-Cal and Healthy Families programs shall collect and verify citizenship and immigration information as required under those programs.

(g) Consistent with the provisions of this section, the Medi-Cal and Healthy Families programs may collect additional information needed to verify eligibility in those programs.

(h) Counties shall accept and process for a Medi-Cal eligibility determination applications provided by the WIC gateway system and ensure timely processing of these applications and a timely eligibility determination and ending of presumptive eligibility.

(i) The presumptive eligibility benefits provided under this section shall be identical to the benefits provided to children who receive full-scope Medi-Cal benefits without a share of cost, and shall only be made available through a Medi-Cal provider.

(j) The confidentiality and privacy protections set forth in Sections 10850 and 14100.2 of the Welfare and Institutions Code and all other confidentiality and privacy protections in federal and state law and regulation shall apply to all children and families using the automated enrollment gateway system as described in this section.

(k) The state shall promote and offer support to the WIC program for the use of the simple electronic application and the automated enrollment gateway system.

(l) The board shall seek approval of any amendments to the state plan necessary to implement this section, in accordance with Title XXI (42 U.S.C. Sec. 1397aa et seq.) of the federal Social Security Act.

(m) The department shall seek approval of any amendments to the state plan necessary to implement this section, in accordance with Title XIX (42 U.S.C. 1396 et seq.) of the federal Social Security Act. Notwithstanding any other provision of law, only when all necessary federal approvals have been obtained shall this section be implemented.

history: (History: Added by Stats. 2006, Ch. 328, Sec. 5. Effective January 1, 2007.)


text:
(a) Pursuant to Sections 14005.26 and 14005.27 of the Welfare and Institutions Code, subscribers enrolled in the Healthy Families Program pursuant to this part shall, no sooner than January 1, 2013, transition to the Medi-Cal program pursuant to Sections 14005.26 and 14005.27 of the Welfare and Institutions Code to the extent they are otherwise eligible. AIM-linked infants, as defined in Section 12695.03, with incomes above 250 percent of the federal poverty level are exempt from this transition.

(b) The board shall coordinate with the State Department of Health Care Services to implement Sections 14005.26 and 14005.27 of the Welfare and Institutions Code.

(c) The board’s actions to coordinate with the State Department of Health Care Services to implement Sections 14005.26 and 14005.27 of the Welfare and Institutions Code, as specified in subdivision (b), shall include, but not be limited to, all of the following:

(1) Notwithstanding Section 12693.74, disenrollment of subscribers in the manner, and at the times, specified in Section 14005.27 of the Welfare and Institutions Code. The board may retain a subscriber in the program for longer than 12 months if needed to ensure a smooth transition to the Medi-Cal program.

(2) In coordination with the State Department of Health Care Services, provision of reasonable notice to applicants concerning disenrollment of subscribers consistent with Section 14005.27 of the Welfare and Institutions Code.

(3) Notwithstanding Section 12693.51, transfers of subscribers from one participating plan to another at the times and under the conditions prescribed by the board, without the obligation that the board provide an annual opportunity for subscribers to transfer from one participating plan to another.

(d) Nothing in subdivision (e) of Section 12693.43 shall be construed to require any refund or adjustment of family contributions if an applicant has paid for three months of required family contributions in advance and the subscriber for whom the applicant has paid these family contributions is disenrolled pursuant to this section, or for any other reason, without receiving a fourth consecutive month of coverage.

(e) (1) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the board shall, without taking any further regulatory action, implement, interpret, or make specific this section by means of business rules, program bulletins, program correspondence to subscribers and contractors, letters, or similar instructions.

(2) The board may adopt and readopt emergency regulations implementing this section. The adoption and readoption, by the board, of regulations implementing this section shall be deemed an emergency and necessary to avoid serious harm to the public peace, health, safety, or general welfare for purposes of Sections 11346.1 and 11349.6 of the Government Code, and the board is hereby exempted from the requirement that it describe facts showing the need for immediate action and from review by the Office of Administrative Law.

(f) The Healthy Families Program, pursuant to this part, shall cease to enroll new subscribers no sooner than the date transition begins pursuant to subdivision (a), and any transition of children shall be in compliance with the implementation plan or plans as contained in Section 14005.27 of the Welfare and Institutions Code.

history: (History: Amended by Stats. 2013, Ch. 76, Sec. 141. (AB 383) Effective January 1, 2014.)

path: 2. CLASSES OF INSURANCE > 6.2. HEALTHY FAMILIES > 16.2. Transition of Healthy Families Program Enrollees to Medi-Cal


text: All civil service employees who are currently employed by the Managed Risk Medical Insurance Board, whose functions are transferred to the State Department of Health Care Services as a result of the act adding this section, shall retain their positions, status, and rights pursuant to Section 19050.9 of the Government Code and the State Civil Service Act (Part 2 (commencing with Section 18500) of Division 5 of Title 2 of the Government Code).

history: (History: Added by Stats. 2012, Ch. 28, Sec. 8. (AB 1494) Effective June 27, 2012.)

chapter: 16.2. Transition of Healthy Families Program Enrollees to Medi-Cal


text:
For the purposes of this part, the following terms have the following meanings:

(a) “Board” means the Managed Risk Medical Insurance Board.

(b) “Employee” means permanent or probationary civil service employee.

history: (History: Added by Stats. 2013, Ch. 448, Sec. 2. (SB 800) Effective January 1, 2014.)

part: 6.8. Program Transfers

path: 2. CLASSES OF INSURANCE > 6.8. Program Transfers


text:
(a) (1) If any statute dissolves or terminates the board, any employee of the board who, immediately prior to the effective date of the dissolution or termination of the board, was assigned to the Healthy Families Program (Part 6.2 (commencing with Section 12693)), the Access for Infants and Mothers Program (Part 6.3 (commencing with Section 12695)), the County Health Initiative Matching Fund (Part 6.4 (commencing with Section 12699.50)), or the Major Risk Medical Insurance Program (Part 6.5 (commencing with Section 12700)) shall be transferred to the State Department of Health Care Services and shall retain his or her status, position, and rights pursuant to Section 19050.9 of the Government Code and the State Civil Service Act (Part 2 (commencing with Section 18500) and Part 2.6 (commencing with Section 19815) of Division 5 of Title 2 of the Government Code).

(2) If employees are transferred to the State Department of Health Care Services pursuant to this subdivision, the department shall prepare a report on the transfer of employees, and, if applicable, any functions transferred to the department upon dissolution or termination of the board. The report shall, at a minimum, describe any assignment of new activities to transferred employees and provide workload justification for the position authority transferred pursuant to this subdivision. The department shall submit the report to the fiscal and relevant policy committees of the Legislature by February 1 of the year following the year in which employees are transferred, and shall update the report, if necessary, by February 1 of each of the two years following submission of the report. The report may be included with any budget information submitted by the department to those committees.

(b) (1) If any statute dissolves or terminates the board, any employee of the board who, immediately prior to the effective date of the dissolution or termination of the board, was assigned to the Federal Temporary High Risk Pool (Part 6.6 (commencing with Section 12739.5) and Part 6.7 (commencing with Section 12739.70)) shall be transferred to the California Health Benefit Exchange and shall retain his or her status, position, and rights pursuant to Section 19050.9 of the Government Code and the State Civil Service Act (Part 2 (commencing with Section 18500) and Part 2.6 (commencing with Section 19815) of Division 5 of Title 2 of the Government Code).

(2) This subdivision shall not apply to any employee who has transferred to the California Health Benefit Exchange pursuant to subdivision (b) of Section 12739.61 or Section 12739.79.

(c) If any statute dissolves or terminates the board, an employee’s applicable reinstatement rights that would have applied to the board shall instead apply to the State Department of Health Care Services.

history: (History: Amended by Stats. 2014, Ch. 31, Sec. 41. (SB 857) Effective June 20, 2014.)


text: Any permanent or probationary civil service employee who is employed by the board and assigned to the Federal Temporary High Risk Pool (Part 6.6 (commencing with Section 12739.5) and Part 6.7 (commencing with Section 12739.70)) and whose function ceases due to Section 12739.61 shall immediately be transferred to the California Health Benefit Exchange and shall retain his or her status, position, and rights pursuant to Section 19050.9 of the Government Code and the State Civil Service Act (Part 2 (commencing with Section 18500) and Part 2.6 (commencing with Section 19815) of Division 5 of Title 2 of the Government Code).

history: (History: Added by Stats. 2014, Ch. 31, Sec. 42. (SB 857) Effective June 20, 2014.)


text:
The definitions used in this section govern the construction and terms used in this part but shall not affect any other provisions of this code:

(a) “Home protection contract” means a contract or agreement whereby a person, other than a builder, seller, or lessor of the home which is the subject of the contract, undertakes for a specified period of time, for a predetermined fee, to repair or replace all or any part of any component, system or appliance of a home necessitated by wear and tear, deterioration or inherent defect, arising during the effective period of the contract, and, in the event of an inspection conducted pursuant to subdivision (b) of Section 12761, by the failure of that inspection to detect the likelihood of any such loss.

Such contract shall provide for a system of service for effectuating such repair or replacement and shall not include protection against consequential damage from the failure of any component, system or appliance.

(b) “Home protection company” means any person licensed pursuant to this part which issues home protection contracts.

(c) “Protection contract fee” means the consideration received, or to be received, by a home protection company for the issuance of any home protection contract.

A home protection contract fee shall be the fee established by a home protection company for coverage extending one year from the effective date of the contract. Where initial coverage is provided for a period in excess of one year, the home protection contract fee shall be the annual fee, plus a separately stated pro rata portion of the annual fee for the period of coverage which exceeds one year.

(d) “Home” or “residential property” as used in this part means any single or multiple unit or units, including mobilehomes, (as defined in Health and Safety Code Section 18211) used primarily for residential purposes.

history: (History: Amended (as amended by Stats. 1981, Ch. 820) by Stats. 1987, Ch. 664, Sec. 5.)

part: 7. HOME PROTECTION

chapter: 1. Definitions and Licensing

path: 2. CLASSES OF INSURANCE > 7. HOME PROTECTION > 1. Definitions and Licensing


text:
This part shall not apply to:

(a) Performance guarantees or service contracts given by either the builder of a home or the manufacturer or seller of an appliance or other system or component, whether or not an identifiable charge is made for such guarantee or service contract.

(b) Any service contract, guarantee, or warranty intending to guarantee or warrant the repairs or service of a home appliance, system or component, provided such service contract, guarantee, or warranty is issued by a person who has sold, serviced, repaired or provided replacement of that appliance, system or component at the time of, or prior to issuance of the contract, guarantee, or warranty; and, provided, further, that the person issuing the service contract, guarantee, or warranty does not engage in the business of a home protection company.

(c) The provider of any pest control service agreement pursuant to Section 8516 of the Business and Professions Code.

(d) This section shall become operative January 1, 2004.

history: (History: Repealed (in Sec. 2) and added by Stats. 1997, Ch. 523, Sec. 3. Effective January 1, 1998. Section operative January 1, 2004, by its own provisions.)


text: Home protection contracts and home protection companies, and all matters incident to or concerned with such contracts and companies, shall be exclusively subject to and regulated by the provisions of this part and, except as provided in Section 12743, shall not be governed by any other provision of this code.

history: (History: Added by Stats. 1978, Ch. 1203.)


text:
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 1150).

(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).

(7) Article 8 (commencing with Section 1260).

(f) Article 4 (commencing with Section 1610) of Chapter 4 of Part 2 of Division 1.

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

(h) Sections 1850, 1850.5, 1852, 1853.5, 1853.7, 1853.8, 1857, 1857.2, 1857.3, 1857.4, 1857.5, 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.

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

(j) In any references in the provisions made applicable to this part by subdivisions (a) to (i) 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.

(k) 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.

history: (History: Amended by Stats. 1981, Ch. 820, Sec. 4.)


text:
(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.

history: (History: Amended by Stats. 2014, Ch. 324, Sec. 1. (AB 1130) Effective January 1, 2015.)


text:
(a) Any insurance holding company subject to Article 4.7 (commencing with Section 1215) of Chapter 2 of Part 2 of Division 1, one of whose affiliates is a home protection company as defined in this part, may invest in or operate a corporation which provides home service contractor or dispatch services or appliance service or appliance repair services pursuant to a contract issued for that purpose. The corporation shall not be subject to licensing or regulation under this part except as set forth in this section, provided, that the contract shall not be sold in conjunction with, or otherwise attach to, the sale or any proposed sale of the real property to which it relates.

(b) At the time of filing its registration statement under Section 1215.4, and annually thereafter, each affiliate owning or operating such a corporation shall file as a supplement thereto, a statement of the financial condition of the corporation prepared according to generally accepted accounting principles, and a designated list of the name and addresses of all agents, employees, and independent contractors utilized to issue or sell those contracts. Each statement of financial condition and designated list shall be certified as correct by an officer of the corporation. The commissioner may prescribe the form for the statement or list.

history: (History: Added by Stats. 1986, Ch. 944, Sec. 2.)


text:
(a) A home protection company which has issued or renewed an aggregate number of 1,000 or less contracts in the preceding calendar year shall maintain a minimum net worth of forty thousand dollars ($40,000) and for each additional 500 contracts, or fraction thereof, up to 10,000 contracts, an additional twenty thousand dollars ($20,000).

(b) Net worth is defined as the excess of admitted assets over all liabilities and required reserves. At least twenty thousand dollars ($20,000) of net worth shall consist of paid-in capital.

history: (History: Amended by Stats. 1981, Ch. 820, Sec. 5.)

chapter: 2. Fiscal Requirements

path: 2. CLASSES OF INSURANCE > 7. HOME PROTECTION > 2. Fiscal Requirements


text: Any home protection company which has issued and in force, prior to January 1, 1979, any contracts for home protection exempt from the provisions of this part pursuant to Section 12741, shall carry a portion of the fee received for such contracts in the reserve contemplated by Section 985, as though such fees were premiums subject to the provisions of that section, and such sums shall be deemed equivalent to premiums for purposes of that section but shall not be considered premiums for the purposes of Section 12202 of the Revenue and Taxation Code.


text:
(a) A 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 vary from the requirements thereof, pursuant to regulations 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. This subdivision shall not be construed to limit the authority of the commissioner to request financial statements from licensees at any time.

(b) The commissioner shall, before licensure and at other times as appears necessary, examine the business and affairs of a home protection company subject to this part. A 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 a five-year period, unless the commissioner finds that the financial condition of the company has deteriorated, thereby warranting an interim examination.

(c) The commissioner may extend the period between examinations up to two additional years if the commissioner determines that conditions warrant the extension. In making that determination, the commissioner may consider all of the following factors:

(1) The company’s reserves.

(2) The company’s net worth.

(3) Any other factors the commissioner considers relevant.

history: (History: Amended by Stats. 2018, Ch. 431, Sec. 1. (AB 2142) Effective January 1, 2019.)


text:
(a) A home protection company shall maintain a reserve for unearned premiums in an amount not less than 40 percent of the aggregate premiums charged on its contracts currently in force.

Amounts to be reserved shall be on a 12-month basis. Where the contract is for a period of more than 12 months, the reserve for unearned premiums for the period beyond 12 months shall be 100 percent of the pro rata portion of the contract fee attributable to the period of coverage in excess of 12 months. The unearned premium reserve for contracts exceeding 12 months shall be reduced to not less than 40 percent of the pro rata portion of the contract fee applicable to the next succeeding 12-month period, as of the first day of the succeeding 12-month period, and each succeeding 12-month period thereafter during which the contract is in effect.

Where the home protection contract provides coverage during the selling or listing period of the real property to which the contract applies, the home protection contract fee applicable to this period of coverage shall be deemed fully earned upon the close of escrow, and receipt of payment of the applicable contract fee.

(b) For purposes of this section, such reserve shall not include protection contract fees on home protection contracts to the extent provision is made for reinsurance of the outstanding risk on such contracts.

(c) The commissioner may, by regulation, prescribe the format by which the reserve shall be reported.

history: (History: Amended by Stats. 1987, Ch. 664, Sec. 6.)


text: A home protection company shall be deemed insolvent whenever its net worth is reduced below 50 percent of the amount required by Section 12750.

history: (History: Added by Stats. 1981, Ch. 820, Sec. 8.)


text: A home protection company shall invest only in those assets defined in Article 3 (commencing with Section 1170) and Article 4 (commencing with Section 1190) of Chapter 2 of Part 2 of Division 1, except that an amount to be determined by the commissioner by regulation of its admitted assets may be invested in tangible personal property held by it for the purpose of repair or replacement of home components, systems or appliances under its home protection contracts.

history: (History: Added by Stats. 1981, Ch. 820, Sec. 9.)


text: The provisions of Article 14.2 (commencing with Section 1063) of Chapter 1 of Part 2 of Division 1, shall not be applicable to home protection companies.

history: (History: Added by Stats. 1981, Ch. 820, Sec. 10.)


text: No home protection company shall pay a commission to any person as an inducement or compensation for the issuance, purchase or acquisition of a home protection contract, nor shall a home protection company or any other insurer either directly or indirectly, as a part of any real property transaction in which a home protection contract will be issued, purchased or acquired, require that a home protection contract be issued, purchased or acquired in conjunction with or as a condition precedent to the issuance, purchase or acquisition, by any person, of any other policy of insurance. The provisions of this section shall not prohibit payment of an override commission or marketing fee to an employee or commission sales agent who is the marketing representative of the home protection company or its parent, subsidiary, or affiliate on the sale or marketing of a home protection contract, provided such person is not a real estate licensee sharing in or entitled to share in, or affiliated with a real estate brokerage firm which is entitled to share in the real estate commission generated by the underlying real property transaction.

history: (History: Repealed and added by Stats. 1981, Ch. 689, Sec. 4.)

chapter: 3. Other Provisions

path: 2. CLASSES OF INSURANCE > 7. HOME PROTECTION > 3. Other Provisions


text:
(a) The furnishing of a home protection contract without charge to any person shall constitute a violation of this part. No home protection contract providing coverage prior to the time an interest in the home to which it attaches is sold shall be issued or delivered unless it provides for consideration. Such consideration may consist of a bona fide promise to pay the protection contract fee at the time of and only upon transfer of title.

(b) A home protection company may require an onsite inspection as a prequalification for the issuance of a home protection contract, and in such event offer a report on the inspection in connection with a bona fide application for the issuance of such contract even though the issuance of a contract on the property which is the subject of the inspection does not occur.

history: (History: Amended by Stats. 1986, Ch. 944, Sec. 4.)


text:
(a) A home protection company which was licensed as such on December 31, 1988, and as of that date was a franchisor of entities authorized by Section 771.1 to solicit, negotiate, or effect home protection contracts, or a parent, subsidiary, or affiliate of such a franchisor, and continues to be such a franchisor or parent, subsidiary, or affiliate of such a franchisor, may provide coverage for a listing period.

(b) For the purposes of this section, a “listing period” means a period prior to the time an interest in the home to which the home protection coverage attaches is sold, during which there is in effect an exclusive right to sell listing as that term is defined in Section 1086 of the Civil Code, between the seller of that home and a franchisee of that franchisor.

(c) Home protection contracts providing listing period coverage issued pursuant to this section shall be exempt from the provisions of both of the following:

(1) Subdivision (c) of Section 12740, which requires a separately stated pro rata portion of the annual fee for the period of coverage which exceeds one year.

(2) Subdivision (a) of Section 12753, which requires reserves for unearned premiums applicable to the listing period coverage provided under those home protection contracts.

history: (History: Added by Stats. 1990, Ch. 1021, Sec. 1.)


text:
(a) A home protection contract shall specify, in clear and conspicuous terms, the following information:

(1) Each of the appliances, systems and components covered by the contract.

(2) All exclusions and limitations respecting the extent of coverage.

(3) The period during which the contract will remain in effect, the protection contract fee and the renewal terms, if any.

(4) With respect to the performance of services by the home protection company, all of the following:

(A) The services to be performed by the company and the terms and conditions of such performance.

(B) The service fee or fees, if any, to be charged for such services.

(C) All limitations respecting the performance of services, including any restrictions as to the time period when or geographical area within which services may be requested or will be performed.

(D) A statement that services will be performed upon telephonic request therefor to the company, without any requirement that claim forms or applications be filed prior to the rendition of service.

(E) A representation that services will be initiated by or under the direction of the company within 48 hours after request is made for such services by any person entitled to make such request under the contract, or the agent of such person.

(b) The commissioner may adopt, pursuant to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, such reasonable regulations as may be necessary to make more specific the provisions of this section. Those regulations may also establish such other contract form standards and requirements as the commissioner may deem necessary and appropriate in the public interest. However, this section does not authorize the commissioner to specify those appliances, systems, or components which must be covered by a home protection contract except to the extent necessary to guarantee the equity of the exclusions from coverage offered or provided under a contract, or to the extent necessary to avoid illusory coverage due to the nature or extent of exclusions from the contract.

history: (History: Amended by Stats. 1983, Ch. 142, Sec. 96.)


text: No home protection contract shall be issued or delivered until a copy of the form thereof is filed with the commissioner. The commissioner may charge a fee for the filing, which fee shall be established by regulation adopted pursuant to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.

history: (History: Amended by Stats. 1985, Ch. 106, Sec. 104.)


text:
(a) Any home protection contract shall be noncancellable during the initial term for which it was issued, except for:

(1) Nonpayment of protection contract fees;

(2) Fraud or misrepresentation of facts material to the issuance of such contract; or

(3) Contracts providing coverage prior to the time that an interest in the residential property to which it attaches is sold, upon the contingency that such sale does not occur.

(b) Nothing in this section establishes a right of the contract holder to renewal of any contract.

history: (History: Amended by Stats. 1981, Ch. 820, Sec. 15.)


text:
The following definitions apply for purposes of this part:

(a) “Motor vehicle” means a self-propelled device operated solely or primarily upon land and may include both self-propelled motor homes or recreational vehicles, non-self-propelled camping and recreational trailers, off-road vehicles, and trailers designed to transport off-road vehicles. However, “motor vehicle” shall not include a self-propelled vehicle, or a component part of such a vehicle, that has any of the following characteristics:

(1) Has a gross vehicle weight rating of 30,000 pounds or more, and is not a recreational vehicle as defined by Section 18010 of the Health and Safety Code.

(2) Is designed to transport more than 15 passengers, including the driver.

(3) Is used in the transportation of materials considered hazardous pursuant to the Hazardous Materials Transportation Act (49 U.S.C. Sec. 5101 et seq.), as amended.

(b) “Watercraft” means a vessel, as defined in Section 21 of the Harbors and Navigation Code, and may include any non-self-propelled trailer used to transport such watercraft upon land.

(c) (1) “Vehicle service contract” means a contract or agreement for a separately stated consideration and for a specific duration to repair, replace, or maintain a motor vehicle or watercraft, or to indemnify for the repair, replacement, or maintenance of a motor vehicle or watercraft, necessitated by an operational or structural failure due to a defect in materials or workmanship, or due to normal wear and tear.

(2) (A) A vehicle service contract may also provide for the incidental payment of indemnity under limited circumstances only in the form of the following additional benefits: coverage for towing, substitute transportation, emergency road service, rental car reimbursement, reimbursement of deductible amounts under a manufacturer’s warranty, and reimbursement for travel, lodging, or meals.

(B) A provider seeking to offer a vehicle service contract, including any of the benefits described in subparagraph (A), shall, when filing a specimen of the contract in accordance with subdivision (a) of Section 12820, certify that the indemnity benefits provided are incidental. For purposes of subparagraph (A) and this certification, indemnity benefits are incidental if the cost to provide them based on historical data, or projected data if historical data is unavailable or insufficient, is substantially less than the cost of providing all the benefits described in paragraphs (1), (3), (4), and (5). The commissioner may request the historical or projected data at any time.

(3) “Vehicle service contract” also includes an agreement of a term of at least one year, for separately stated consideration, that promises routine maintenance.

(4) Notwithstanding Section 116, and paragraphs (1) and (2) of this subdivision, a vehicle service contract also includes one or more of the following:

(A) An agreement that promises the repair or replacement of a tire or wheel necessitated by wear and tear, defect, or damage caused by a road hazard. However, an agreement that promises the repair or replacement of a tire necessitated by wear and tear, defect, or damage caused by a road hazard, in which the obligor is the tire manufacturer, is exempt from the requirements of this part. A warranty provided by a tire or wheel distributor or retailer is exempt from the requirements of this part as long as the warranty covers only defects in the material or workmanship of the tire or wheel.

(B) An agreement that promises the repair or replacement of glass on a vehicle necessitated by wear and tear, defect, or damage caused by a road hazard. However, a warranty provided by a vehicle glass or glass sealant manufacturer is exempt from the requirements of this part. A warranty provided by a vehicle glass distributor or retailer is exempt from the requirements of this part as long as the warranty covers only defects in the material or workmanship of the vehicle glass.

(C) An agreement that promises the removal of a dent, ding, or crease without affecting the existing paint finish using paintless dent repair techniques, and which expressly excludes the replacement of vehicle body panels, sanding, bonding, or painting.

(D) An agreement that promises the replacement of a motor vehicle key or key fob in the event that the key or key fob becomes inoperable or is lost or stolen.

(5) “Vehicle service contract” also includes an agreement covering any of a vehicle’s mechanical components, provided with or without separate consideration, that promises to repair, replace, or maintain a motor vehicle or watercraft, or to indemnify for the repair, replacement, or maintenance of a motor vehicle or watercraft, conditioned upon the use of a specific brand or brands of lubricant, treatment, fluid, or additive.

(d) “Service contract administrator” or “administrator” means any person, other than an obligor, who performs or arranges, directly or indirectly, any of the following activities:

(1) Providing sellers with service contract forms.

(2) Participating in the adjustment of claims arising from service contracts.

(3) Coordinating the performance or arrangement of any of the benefits permissible under subdivision (c).

(4) Collecting, maintaining, or disbursing of moneys to compensate any person for claims, repairs, or refunds pursuant to a vehicle service contract.

(e) “Purchaser” means any person who purchases a vehicle service contract from a seller.

(f) “Seller” means either of the following:

(1) With respect to motor vehicles, a dealer or lessor-retailer licensed in one of those capacities by the Department of Motor Vehicles and who sells vehicle service contracts incidental to their business of selling or leasing motor vehicles.

(2) With respect to watercraft, a person who sells vehicle service contracts incidental to that person’s business of selling or leasing watercraft vehicles.

(g) “Obligor” means the entity legally obligated under the terms of a service contract.

(h) “Road hazard” means a hazard that is encountered while driving a motor vehicle and that may include, but is not limited to, potholes, rocks, debris, metal parts, glass, plastic, curbs, or composite scraps.

history: (History: Amended by Stats. 2025, Ch. 558, Sec. 26. (AB 487) Effective January 1, 2026.)

part: 8. SERVICE CONTRACTS

path: 2. CLASSES OF INSURANCE > 8. SERVICE CONTRACTS


text:
(a) Notwithstanding Sections 103 and 116, the following types of agreements covering watercraft or motor vehicles shall not constitute insurance:

(1) A vehicle service contract that does each of the following:

(A) Names as the obligor a motor vehicle manufacturer or distributor licensed in that capacity by the Department of Motor Vehicles, or a watercraft manufacturer.

(B) Covers only motor vehicles or watercraft manufactured, distributed, or sold by that obligor.

(2) A vehicle service contract in which the obligor is a seller, provided that the obligor complies with all provisions of this part except Section 12815.

(3) A vehicle service contract sold by a seller in which the obligor is a party other than the seller, provided that the obligor complies with all provisions of this part.

(4) An agreement in which the obligor is a motor vehicle or watercraft part manufacturer, distributor, or retailer, that covers no more than the following items:

(A) The repair or replacement of a part manufactured, distributed, or retailed by that obligor.

(B) Consequential and incidental damage resulting from the failure of that part.

(5) An agreement in which the obligor is a repair facility, that is entered into pursuant and subsequent to repair work previously performed by that repair facility, and that is limited in scope to the following:

(A) The repair or replacement of the part that was previously repaired.

(B) Consequential and incidental damage resulting from the failure of that part.

(6) An agreement promising only routine maintenance that does not constitute a vehicle service contract.

(7) An agreement whereby an employer promises, or a third party contracted by the employer and acting on the employer’s behalf provides, mileage reimbursement or routine vehicle maintenance or noncollision repairs, or any combination of these benefits, to the employer’s employees for personal vehicles used in the employer’s business.

(b) The types of agreements described in paragraphs (4) to (7), inclusive, of subdivision (a) are exempt from all provisions of this part.

(c) Vehicle service contracts described in paragraph (1) of subdivision (a) are exempt from the provisions of Sections 12815, 12830, 12835, and 12845.

history: (History: Amended by Stats. 2016, Ch. 386, Sec. 4. (AB 2354) Effective January 1, 2017.)


text:
(a) No person, other than a seller, shall sell or offer for sale a vehicle service contract to a purchaser.

(b) No obligor shall use a seller as a fronting company and no seller shall act as a fronting company. For purposes of this section, a “fronting company” is a seller that authorizes a third-party obligor to use its name or business to evade or circumvent the provisions of subdivision (a).

history: (History: Added by Stats. 2003, Ch. 439, Sec. 5. Effective January 1, 2004. Operative July 1, 2004, by Sec. 7 of Ch. 439.)


text:
(a) An obligor who is not a seller shall possess a vehicle service contract provider license. A vehicle service contract provider license shall be applied for and maintained, and its holder shall be subject to disciplinary action, as if it were a property broker-agent and casualty broker-agent license, with the following exceptions:

(1) An applicant for a vehicle service contract provider license is exempt from having to satisfy continuing education requirements, and from having to pass a qualifying exam.

(2) The fee to obtain a vehicle service contract provider license shall be four thousand nine hundred thirty-nine dollars ($4,939). The fee to renew a vehicle service contract provider license shall be eight hundred forty-seven dollars ($847).

(b) A service contract administrator shall be licensed as a property broker-agent and casualty broker-agent.

history: (History: Amended by Stats. 2025, Ch. 566, Sec. 10. (AB 943) Effective January 1, 2026.)


text:
(a) Prior to offering a vehicle service contract form to a purchaser or providing a vehicle service contract form to a seller, an obligor shall file with the commissioner a specimen of that vehicle service contract form.

(b) A vehicle service contract form may include any or all of the benefits described in subdivision (c) of Section 12800 and shall comply with all of the following requirements:

(1) (A) If an obligor has complied with Section 12830, the vehicle service contract shall include a disclosure in substantially the following form: “Performance to you under this contract is guaranteed by a California approved insurance company. You may file a claim with this insurance company if any promise made in the contract has been denied or has not been honored within 60 days after your request. The name and address of the insurance company is: (insert name and address). If you are not satisfied with the insurance company’s response, you may contact the California Department of Insurance at 1-800-927-4357 or access the department’s Internet Web site (www.insurance.ca.gov).”

(B) If an obligor has complied with Section 12836, the vehicle service contract shall include a disclosure in substantially the following form: “If any promise made in the contract has been denied or has not been honored within 60 days after your request, you may contact the California Department of Insurance at 1-800-927-4357 or access the department’s Internet Web site (www.insurance.ca.gov).”

(C) The requirement that a vehicle service contract form include the department’s Internet Web site shall not apply to a form for which the department has issued a “no objection letter” as of December 31, 2016.

(2) All vehicle service contract language that excludes coverage, or imposes duties upon the purchaser, shall be conspicuously printed in boldface type no smaller than the surrounding type.

(3) The vehicle service contract shall do each of the following:

(A) State the obligor’s full corporate name or a fictitious name approved by the commissioner, the obligor’s mailing address, the obligor’s telephone number, and the obligor’s vehicle service contract provider license number.

(B) State the name of the purchaser and the name of the seller.

(C) Conspicuously state the vehicle service contract’s purchase price.

(D) Comply with Sections 1794.4 and 1794.41 of the Civil Code.

(E) Name the administrator, if any, and provide the administrator’s license number.

(4) If the vehicle service contract excludes coverage for preexisting conditions, the contract must disclose this exclusion in 12-point type.

(c) The following benefits constitute insurance, whether offered as part of a vehicle service contract or in a separate agreement:

(1) Indemnification for a loss caused by misplacement, theft, collision, fire, or other peril typically covered in the comprehensive coverage section of an automobile insurance policy, a homeowner’s policy, or a marine or inland marine policy, except as expressly authorized in subdivision (c) of Section 12800.

(2) Locksmith services, unless offered as part of an emergency road service benefit.

(d) This section shall become operative on January 1, 2017.

history: (History: Amended (as added by Stats. 2015, Ch. 348, Sec. 27) by Stats. 2016, Ch. 386, Sec. 5. (AB 2354) Effective January 1, 2017.)


text:
(a) In addition to any other right of rescission an obligor or purchaser may have, an obligor may include a provision in a service contract that reserves to the obligor the right to cancel the service contract within 60 days under the following conditions:

(1) Notice of cancellation is mailed to the purchaser postmarked before the 61st day after the date the contract was sold by the seller.

(2) The obligor provides the purchaser with a refund equal to the full purchase price stated on the contract within 30 days from the date of cancellation. However, if the obligor has paid a claim, or has advised the purchaser in writing that it will pay a claim, it may provide a pro rata refund, less the amount of any claims paid prior to cancellation.

(3) The service contract ceases to be valid no less than five days after the postmark date of the notice.

(4) The notice states the specific grounds for the cancellation.

(b) An obligor may at any time cancel a service contract for nonpayment by the purchaser, conditioned upon each of the following:

(1) Notice of cancellation is mailed to the purchaser.

(2) If any refund is owed pursuant to Section 1794.41 of the Civil Code, the refund is paid within 30 days of the date of cancellation.

(3) The service contract ceases to be valid no less than five days after the postmark date of the notice.

(4) The notice states the specific grounds for the cancellation.

(c) An obligor may at any time cancel a service contract for material misrepresentation or fraud by the purchaser, conditioned upon each of the following:

(1) Notice of cancellation is mailed to the purchaser

(2) A pro rata refund of the purchase price stated on the contract is paid within 30 days of the date of cancellation.

(3) The notice states the specific nature of the misrepresentation.

(d) An obligor who cancels a contract is liable for any claim reported to a person designated in the contract for the reporting of claims if the claim is reported prior to the effective date of cancellation and is covered by the contract. For the purpose of this subdivision, a purchaser is deemed to have reported a claim if he or she has completed the first step required under the contract for reporting a claim.

(e) An obligor canceling a contract pursuant to subdivision (b), (c), or (d) who pays a claim, or has advised the purchaser in writing that he or she will pay a claim, may provide a prorata rather than full refund, less the amount of any claims paid prior to cancellation.


text:
(a) Prior to incurring an obligation under a vehicle service contract, an obligor shall file with the commissioner, to the attention of the legal division, and receive the commissioner’s approval to use, a copy of an insurance policy covering 100 percent of the obligor’s vehicle service contract obligations. The policy must be issued by an insurer admitted in this state and authorized by the commissioner to issue that insurance in this state. The policy may also be issued by a risk retention group, as that term is defined in 15 U.S.C. Sec. 3901(a)(4), as long as that risk retention group is in full compliance with the federal Liability Risk Retention Act of 1986 (15 U.S.C. Sec. 3901 and following), is in good standing in its domiciliary jurisdiction, and has registered with the commissioner pursuant to Chapter 1.5 (commencing with Section 125) of Part 1 of Division 1. The insurance required by this subdivision shall be subject to the following:

(1) The insurer or risk retention group shall, at the time the policy is filed with the commissioner, and continuously thereafter, be rated “B++” or better by A. M. Best Company, Inc., maintain surplus as to policyholders and paid-in capital of at least fifteen million dollars ($15,000,000), and annually file audited financial statements with the commissioner.

(2) The commissioner may authorize an insurer or risk retention group that has surplus as to policyholders and paid-in capital of less than fifteen million dollars ($15,000,000) but at least equal to ten million dollars ($10,000,000) to issue the insurance required by this paragraph if the insurer or risk retention group demonstrates to the satisfaction of the commissioner that the company maintains a ratio of direct written premiums, wherever written, to surplus as to policyholders and paid-in capital of not more than 3 to 1.

(3) An obligor required to maintain insurance pursuant to this paragraph who is an affiliate of a distributor of new motor vehicles licensed as such in any state prior to January 1, 2003, and continuously thereafter, is exempt from the requirement that its insurer or risk retention group satisfy the rating, surplus, and paid-in capital requirements of paragraph (1). This exemption shall apply only if the distributor sold or distributed at least 25,000 new motor vehicles to licensed dealers in the preceding five years. For the purpose of this paragraph, “affiliate” has the meaning set forth in subdivision (a) of Section 1215.

(b) An insurance policy filed with the commissioner pursuant to subdivision (a) shall state the name of the obligor. The policy shall provide that all purchasers of vehicle service contracts shall be entitled to satisfaction by the insurer of any and all obligations arising under vehicle service contracts of the named obligor, upon the existence of all of the following conditions and no others:

(1) The service contract obligor refuses or fails to satisfy an obligation arising under the vehicle service contract within 60 days of the date the purchaser submits proof of loss to the obligor.

(2) The purchaser provides written notice to the insurer that the obligor has failed to comply with an obligation under the vehicle service contract.

(3) The purchaser possesses a vehicle service contract sold after the inception and prior to any cancellation of the insurance policy required by subdivision (a), and the vehicle service contract recites the name of the obligor that is insured by the policy as the obligor of the service contract.

(c) An insurer’s liability under a policy filed pursuant to subdivision (a) shall not be negated by any failure of the seller, an administrator, the obligor, or agents of any of these persons, to report the issuance of a vehicle service contract or to remit moneys to another person pursuant to a contractual agreement. The policy must state that the insurer is deemed to have received the premium for the policy upon payment by the purchaser for a vehicle service contract insured by that policy.

(d) In lieu of complying with Section 12836, an obligor shall have on file with the commissioner only one active policy from one insurer at any time. Unless exempt under paragraph (1) of subdivision (a) of Section 12805, an obligor shall comply with either this section or Section 12836, but not both.

(e) No policy cancellation by an insurer shall be valid unless a notice of the intent to cancel the policy was filed with the commissioner 30 days prior to the effective date of the cancellation, or 10 days prior in the event that the cancellation is due to fraud, material misrepresentation, or defalcation by the obligor or its administrator, if any.

history: (History: Amended by Stats. 2023, Ch. 204, Sec. 16. (AB 1140) Effective January 1, 2024.)


text:
(a) In the event an insurer cancels a policy that it has filed with the commissioner pursuant to Section 12830, the obligor named on the policy shall do either of the following:

(1) File a copy of a new policy with the commissioner, before the termination of the prior policy, providing no lapse in coverage following the termination of the prior policy.

(2) Discontinue acting as an obligor as of the termination date of the policy until a new policy becomes effective and has been accepted and acknowledged by the commissioner.

(b) This section shall not relieve an obligor from any obligation incurred under service contracts issued with its name as obligor prior to the date the policy was terminated.


text: In lieu of complying with Section 12830, an obligor or its parent company may establish to the commissioner’s satisfaction that it possesses a net worth of one hundred million dollars ($100,000,000). The obligor shall, upon request, provide the commissioner with all documents and affidavits necessary to establish the net worth, including, but not limited to, a copy of the obligor’s financial statements or the obligor’s parent company’s financial statements, and affidavits by the president and chief financial officer attesting to the net worth of the obligor or the obligor’s parent company. If the obligor elects to meet the net worth requirement through the parent company, the parent company shall agree in writing to guarantee the obligations of the obligor relating to contracts of the obligor issued in this state.

history: (History: Added by Stats. 2007, Ch. 326, Sec. 4. Effective January 1, 2008.)


text:
(a) Every obligor or its administrator shall maintain at its principal office complete and accurate accounts, books, and records of all transactions among the obligor, its administrator, if any, sellers, insurers, and purchasers. Records maintained pursuant to this section shall be made available to the commissioner upon reasonable request. Any computerized recordkeeping system must be capable of producing a legible hard copy of all required records. Accounts, books, and records shall include:

(1) A complete set of accounting records, including, but not limited to, a general ledger, cash receipts and disbursements journals, accounts receivable registers, and accounts payable registers.

(2) Copies of each type of service contract sold.

(3) The name and address of each service contract purchaser to the extent that the name and address have been furnished by the service contract purchaser.

(4) A list of the locations where service contracts are marketed, sold, or offered for sale.

(5) Written claims files which shall contain at least the dates and descriptions of claims related to the service contracts.

(b) All required records pertaining to a service contract shall be maintained by the obligor, its administrator, or the insurer underwriting the contract, for at least three years after the expiration of the contract.

(c) Every insurer that has issued a policy to an obligor shall have an ongoing right to access that obligor’s books and records in order to permit the insurer to fulfill all obligations to purchasers.

(d) The commissioner may examine and investigate the affairs of every obligor and any administrator of an obligor. Any examination or investigation shall be at the expense of the obligor or the administrator, in the discretion of the commissioner. Any information contained in the books and records, including, but not limited to, the identity and addresses of sellers and purchasers of service contracts, shall be confidential, except that the commissioner may use the information in any proceeding or investigation instituted against an obligor or an administrator.

(e) An obligor’s failure to keep or maintain the required accounts, books, or records, or to provide the commissioner with full and immediate access to those records, shall be grounds for the immediate suspension or revocation of the obligor’s vehicle service contract provider’s license, and also shall be grounds for the commissioner to issue a cease and desist order pursuant to Section 1065.2.


text: Any vehicle service contract obligor or administrator that provides vehicle service contract forms to sellers or purchasers, directly or indirectly, and fails to comply with Sections 12815, 12830 and 12835, is guilty of a public offense punishable by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code, or by a fine not exceeding five hundred thousand dollars ($500,000), or both, and shall be enjoined from further violations by a court of competent jurisdiction on petition of the commissioner. This section shall not apply to a seller who is an obligor under vehicle service contracts it sells. The commissioner may issue a cease and desist order pursuant to Section 1065.2 to an obligor or administrator who violates Section 12830 or 12835. The commissioner may issue a cease and desist order pursuant to Section 12921.8 to an obligor or administrator in violation of Section 12815.

history: (History: Amended by Stats. 2011, Ch. 15, Sec. 220. (AB 109) Effective April 4, 2011. Operative October 1, 2011, by Sec. 636 of Ch. 15, as amended by Stats. 2011, Ch. 39, Sec. 68.)


text:
(a) An obligor has the burden of proving that a claim is not covered by a service contract. An obligor has the burden of proving that a claim settlement amount is proper under the terms of the contract.

(b) No seller of a service contract who participates in or influences, directly or indirectly, the processing, administration, or adjustment of claims, shall enter into any agreement or understanding the effect of which is to make the amount of the seller’s commission or compensation contingent upon savings effected in the adjustment, settlement, or payment of losses covered by the contract.


text: The commissioner may adopt regulations necessary or desirable to implement this chapter.


text: The provisions of this part are severable. If any provision of this part or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.


text:
A promise to refund some or all of the purchase price of a service contract if the purchaser does not file any claims, files a limited number of claims, or files claims the dollar amount of which does not exceed a set amount or percentage, shall constitute insurance, unless subdivisions (a) and (b) are satisfied. If conditions (a) and (b) are satisfied, the promise shall constitute a refund agreement.

(a) The promise is offered without separate consideration, and the promisor complies with subdivisions (a)(1), (a)(2) or (a)(3).

(1) The promisor is a service contract obligor, the promise is contained within a service contract, and the obligor has complied with all provisions of this part.

(2) The promisor is a seller, the refund agreement provides no benefits other than the refund of some or all of the purchase price, and the promisor utilizes a refund agreement administrator.

(3) The promisor is neither a seller nor a service contract obligor. Such a person shall be deemed a refund agreement obligor, and shall comply with subdivisions (c)(1), (c)(2) and (c)(3).

(b) A person other than the seller who performs or arranges, directly or indirectly, the collection, maintenance, or disbursement of moneys to compensate any party under a refund agreement, and who also provides sellers with refund agreement forms and participates in the adjustment of refund agreement claims, shall be deemed a refund agreement administrator, and shall comply with subdivision (b)(2).

(1) The sections enumerated in subdivision (b)(2) shall apply to refund agreements and refund agreement administrators. In applying those sections, the terms vehicle service contract administrator, administrator and obligor shall instead mean refund agreement administrator, the word sold shall instead mean provided and the terms vehicle service contract and service contract shall instead mean refund agreement. The sections enumerated in subdivision (b)(2) shall be construed in accordance with the nature of refund agreement forms, refund agreement administrators, and the refund agreement business.

(2) The following sections shall apply and be interpreted pursuant to subdivision (b)(1): 12815(b); 12820(a), (b)(1), (b)(2), (b)(3)(A), (b)(3)(B), 12830(a), (a)(1), (a)(2), (b), (c), (d), (e); 12835; 12840; 12845; 12850; 12855.

(c) (1) The sections enumerated in subdivision (c)(2) shall apply to refund agreements and refund agreement obligors. In applying those sections, the terms vehicle service contract obligor and obligor shall instead mean refund agreement obligor, the word sold shall instead mean provided and the terms vehicle service contract and service contract shall instead mean refund agreement. The sections enumerated in subdivision (c)(2) shall be construed in accordance with the nature of refund agreement forms, refund agreement obligors, and the refund agreement business.

(2) The following sections shall apply and be interpreted pursuant to subdivision (c)(1): 12810(b); 12815(a); 12820(a), (b)(1), (b)(2), (3)(A), (3)(B); 12830(a), (a)(1), (a)(2), (b), (c), (d), (e); 12835; 12840; 12845; 12850; 12855.

(3) A refund agreement obligor may not promise any benefit other than a refund of some or all of the purchase price of a service contract if the purchaser does not file any claims, files a limited number of claims, or files claims the dollar amount of which does not exceed a set amount or percentage.

(4) No person other than a seller shall provide or offer to provide a refund agreement to a purchaser.


text:
For purposes of this part, the following definitions shall apply:

(a) “Chronic condition” means a condition that can be treated or managed, but not cured.

(b) “Congenital anomaly or disorder” means a condition that is present from birth, whether inherited or caused by the environment, which may cause or otherwise contribute to illness or disease.

(c) “Hereditary disorder” means an abnormality that is genetically transmitted from parent to offspring and may cause illness or disease.

(d) “Orthopedic” refers to conditions affecting the bones, skeletal muscle, cartilage, tendons, ligaments, and joints, including elbow dysplasia, hip dysplasia, intervertebral disc degeneration, patellar luxation, and ruptured cranial cruciate ligaments. “Orthopedic” does not include cancers or metabolic, hemopoietic, or autoimmune diseases.

(e) “Pet insurance” means an individual or group property insurance policy that provides coverage for accidents and illnesses of pets, and other veterinary expenses.

(f) “Preexisting condition” means any condition for which a veterinarian provided medical advice, the pet received treatment for, or the pet displayed signs or symptoms consistent with the stated condition prior to the effective date of a pet insurance policy or during any waiting period.

(g) “Producer” means a person licensed pursuant to Section 1625 or 1625.5 who transacts pet insurance in California.

(h) “Renewal” has the same meaning as defined in subdivision (e) of Section 660.

(i) “Veterinarian” means an individual who holds a valid license to practice veterinary medicine from the Veterinary Medical Board pursuant to Chapter 11 (commencing with Section 4800) of Division 2 of the Business and Professions Code or other appropriate licensing entity in the jurisdiction in which the individual practices.

(j) “Veterinary dental care” means the prevention, diagnosis, and treatment of conditions, diseases, and disorders of the oral cavity, the maxillofacial region, and associated structures.

(k) “Veterinary expenses” means the costs associated with medical advice, diagnosis, care, or treatment provided by a veterinarian, including, but not limited to, veterinary dental care, the cost of drugs prescribed by a veterinarian, and services provided under the supervision of a veterinarian.

(l) “Waiting period” means the period of time specified in a pet insurance policy that is required to transpire before some or all of the coverage in the policy can begin.

(m) “Wellness program” means a subscription or reimbursement-based program that is separate from an insurance policy and that provides goods and services to promote the general health, safety, or well-being of the pet.

history: (History: Amended by Stats. 2024, Ch. 612, Sec. 1. (SB 1217) Effective January 1, 2025.)

part: 9. Pet Insurance

path: 2. CLASSES OF INSURANCE > 9. Pet Insurance


text: A policy of pet insurance that is marketed, issued, amended, renewed, or delivered, whether or not in California, to a California resident, on or after July 1, 2015, regardless of the situs of the contract or master group policyholder, or the jurisdiction in which the contract was issued or delivered, is subject to this part.

history: (History: Added by Stats. 2014, Ch. 896, Sec. 1. (AB 2056) Effective January 1, 2015.)


text:
(a) An insurer transacting pet insurance in California shall disclose all of the following to consumers:

(1) If the policy excludes coverage due to any of the following:

(A) A preexisting condition.

(B) A hereditary disorder.

(C) A congenital anomaly or disorder.

(D) A chronic condition.

(2) If the policy includes any other exclusion, the following statement: “Other exclusions may apply. Please refer to the exclusions section of the policy for more information.”

(3) Any policy provision that limits coverage through a waiting period, a deductible, coinsurance, or an annual or lifetime policy limit.

(4) Whether the insurer reduces coverage or increases premiums based on the insured’s claim history, the age of the covered pet, or a change in the geographic location of the insured.

(b) (1) If a pet insurer uses any of the terms in paragraph (1) of subdivision (a) in a policy of pet insurance, the insurer shall use the definition of those terms as set forth in Section 12880 and include the definitions of the terms in the policy. The pet insurer shall also make those definitions available before the sale of a policy, through a link on the main page of the insurer’s internet website, or as a hard copy if hard copy policy documents are requested by or provided to a consumer.

(2) This subdivision and Section 12880 do not prohibit or limit the types of exclusions pet insurers may use in their policies. This subdivision does not require pet insurers to have any of the limitations or exclusions defined in Section 12880.

(c) Before the sale of a policy, a pet insurer shall clearly disclose a summary description of the basis or formula on which the insurer determines claim payments under a pet insurance policy within the policy and through a link on the main page of the insurer’s internet website, or as a hard copy if hard copy policy documents are requested by or provided to a consumer.

(d) A pet insurer that uses a benefit schedule to determine claim payment under a pet insurance policy shall do both of the following before the sale of a policy:

(1) Clearly disclose the applicable benefit schedule in the policy.

(2) Disclose all benefit schedules used by the insurer under its pet insurance policies through a link on the main page of the insurer’s internet website, or as a hard copy if hard copy policy documents are requested by or provided to a consumer.

(e) A pet insurer that determines claim payments under a pet insurance policy based on usual and customary fees, or any other reimbursement limitation based on prevailing veterinary service provider charges, shall do both of the following before the sale of a policy:

(1) Include a usual and customary fee limitation provision in the policy that clearly describes the insurer’s basis for determining usual and customary fees and how that basis is applied in calculating claim payments.

(2) Disclose the insurer’s basis for determining usual and customary fees through a link on the main page of the insurer’s internet website, or as a hard copy if hard copy policy documents are requested by or provided to a consumer.

(f) If a medical examination by a licensed veterinarian is required to effectuate coverage, the pet insurer shall clearly and conspicuously disclose the required aspects of the examination before a policy purchase and disclose that examination documentation may result in a preexisting condition exclusion before the sale of a policy.

(g) Waiting periods and the requirements applicable to waiting periods shall be clearly and prominently disclosed to consumers before a policy purchase.

(h) The insurer shall create a summary of all policy provisions required in subdivisions (a) to (g), inclusive, and subdivision (j) into a separate document titled “Insurer Disclosure of Important Policy Provisions.”

(i) The insurer shall post the “Insurer Disclosure of Important Policy Provisions” document required in subdivision (h) through a link on the main page of the insurer’s internet website, or as a hard copy if hard copy policy documents are requested by or provided to a consumer.

(j) (1) In connection with the issuance of a new pet insurance policy, the insurer shall provide the insured with a copy of the “Insurer Disclosure of Important Policy Provisions” document required pursuant to subdivision (h) in at least 12-point type when it delivers the policy.

(2) In addition, the pet insurance policy shall have clearly printed thereon or attached thereto a notice stating that, after receipt of the policy by the owner, the policy may be returned by the insured for cancellation by delivering it or mailing it to the insurer or to the agent through whom it was purchased.

(A) The period of time set forth by the insurer for return of the policy shall be clearly stated on the notice, and this free look period shall be not less than 30 days. The insured may return the policy to the insurer or the agent through whom the policy was purchased at any time during the free look period specified in the notice.

(B) The delivery or mailing of the policy by the insured pursuant to this paragraph shall void the policy from the beginning, and the parties shall be in the same position as if a policy or contract had not been issued.

(C) All premiums paid and any policy fee paid for the policy shall be refunded to the insured within 30 days from the date that the insurer is notified of the cancellation. However, if the insurer has paid any claim, or has advised the insured in writing that a claim will be paid, the 30-day free look right pursuant to this paragraph is inapplicable and instead the policy provisions relating to cancellation apply to any refund.

(k) The disclosures required in this section shall be in addition to any other disclosure requirements required by law or regulation.

history: (History: Amended by Stats. 2024, Ch. 612, Sec. 2. (SB 1217) Effective January 1, 2025.)


text:
(a) A person who violates a provision of this part is liable to the state for a civil penalty to be determined by the commissioner, not to exceed five thousand dollars ($5,000) for each violation, or, if the violation was willful, a civil penalty not to exceed ten thousand dollars ($10,000) for each violation. The commissioner may establish the acts that constitute a distinct violation for purposes of this section. However, when the issuance, amendment, or servicing of a policy or endorsement is inadvertent, all of those acts constitute a single violation for purposes of this section.

(b) The penalty imposed by this section shall be imposed by and determined by the commissioner pursuant to Section 12880.4. The penalty imposed by this section is appealable by means of any remedy provided by Section 12940 or by Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.


text:
(a) Whenever the commissioner shall have reason to believe that a person has engaged or is engaging in this state in a violation of this part, and that a proceeding by the commissioner in respect thereto would be to the interest of the public, he or she shall issue and serve upon that person an order to show cause containing a statement of the charges in that respect, a statement of that person’s potential liability under this part, and a notice of a hearing thereon to be held at a time and place fixed therein, which shall not be less than 30 days after the service thereof, for the purpose of determining whether the commissioner should issue an order to that person to pay the penalty imposed by Section 12880.3 and to cease and desist those methods, acts, or practices, or any of them, that violate this part.

(b) If the charges or any of them are found to be justified, the commissioner shall issue and cause to be served upon that person an order requiring that person to pay the penalty imposed by Section 12880.3 and to cease and desist from engaging in those methods, acts, or practices found to be in violation of this part.

(c) The hearing shall be conducted in accordance with the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), except that the hearings may be conducted by an administrative law judge in the administrative law bureau when the proceedings involve a common question of law or fact with another proceeding arising under other Insurance Code sections that may be conducted by administrative law bureau administrative law judges. The commissioner and the appointed administrative law judge shall have all the powers granted under the Administrative Procedure Act.

(d) The person is entitled to have the proceedings and the order reviewed by means of any remedy provided by Section 12940 or by the Administrative Procedure Act.

history: (History: Amended by Stats. 2015, Ch. 303, Sec. 374. (AB 731) Effective January 1, 2016.)


text: The commissioner may adopt reasonable rules and regulations, as are necessary to administer this part, in accordance with the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code).


text:
At the time a pet insurance policy is issued or delivered to a policyholder, the insurer shall include a written disclosure with all of the following information, printed in 12-point boldface type:

(a) The department’s mailing address, toll-free telephone number established pursuant to Section 12921.1, and internet website address.

(b) The address and customer service telephone number of the insurer or the agent or broker of record.

(c) A statement that the department should be contacted only after discussions with the insurer, or its agent or other representative, have failed to produce a satisfactory resolution of the problem.

(d) If the policy was issued or delivered by an agent or broker, a statement advising the policyholder to contact the broker or agent for assistance.

history: (History: Added by Stats. 2019, Ch. 166, Sec. 1. (AB 1535) Effective January 1, 2020.)


text:
(a) After disclosure to the consumer, a pet insurer may issue policies that exclude coverage on the basis of one or more preexisting conditions. A condition for which coverage is afforded on a policy shall not be considered a preexisting condition on a renewal of the policy. The pet insurer has the burden of proving that the preexisting condition exclusion applies to the condition for which a claim is being made.

(b) After disclosure to the consumer, a pet insurer may issue policies that impose waiting periods upon commencement of coverage that do not exceed 30 days for illnesses or orthopedic conditions not resulting from an accident. A pet insurance policy shall not impose a waiting period for accidents.

(1) A pet insurer utilizing a waiting period shall include a provision in its contract that allows the waiting period to be waived upon completion of a medical examination. A pet insurer may require the examination to be conducted by a licensed veterinarian after the purchase of the policy.

(2) (A) A medical examination conducted pursuant to paragraph (1) shall be paid for by the policyholder, unless the policy specifies that the pet insurer will pay for the examination.

(B) A pet insurer may specify elements to be included as part of the medical examination conducted pursuant to paragraph (1) and may require documentation of those elements, if those specifications do not unreasonably restrict an insured’s ability to waive the waiting period.

(3) Waiting periods, and the requirements applicable to the waiting periods, shall be clearly and prominently disclosed to consumers before the policy purchase.

(4) (A) Upon receipt of a complete application for coverage and valid payment information, a pet insurer shall issue coverage to be effective no later than 12:01 a.m. on the second consecutive day.

(B) Notwithstanding subparagraph (A):

(i) A pet insurer may elect to conduct individualized underwriting on a specific pet, in which case coverage shall be effective no later than 12:01 a.m. on the next day after the pet insurer has determined the pet is eligible for coverage.

(ii) If pet insurance coverage is acquired by an individual through an employer or organization, the effective date of the pet insurance coverage may be postponed to align with the eligibility requirements, benefits effective date, or payment transmission date chosen by the employer or organization.

(C) The date and time at which coverage becomes effective shall be prominently disclosed to the consumer.

(D) For purposes of this paragraph, “individualized underwriting” may include examinations, tests, and any other diagnostic measures that the pet insurer may require, but shall not include any waiting or deferral periods.

(c) A waiting period shall not be applied to a renewal of existing coverage.

(d) A pet insurer shall not require a veterinary examination of the covered pet as a condition of policy renewal.

(e) If a pet insurer includes any prescriptive, wellness, or noninsurance benefits in the policy form, then those benefits are made part of the policy contract and shall comply with all applicable laws and regulations for insurance policies.

(f) A consumer’s eligibility to purchase a pet insurance policy shall not be based on participation, or lack of participation, in a separate wellness program.

history: (History: Added by Stats. 2024, Ch. 612, Sec. 3. (SB 1217) Effective January 1, 2025.)


text:
(a) A pet insurer or producer shall not market a wellness program as pet insurance. Marketing materials for pet insurance shall be separate from marketing materials for wellness programs.

(b) If a wellness program is sold by a pet insurer or producer, all of the following shall apply:

(1) The seller shall clearly and conspicuously disclose during the sales process that the wellness program is not a regulated insurance product and that a pet owner may purchase pet insurance without having to purchase a wellness program.

(2) The purchase or renewal of the wellness program shall not be a requirement to the purchase or renewal of pet insurance.

(3) The costs of the wellness program shall be separate and identifiable from a pet insurance policy sold by the pet insurer or producer.

(4) A payment transaction for pet insurance shall be separate from a payment transaction for a wellness program.

(5) The terms and conditions for a wellness program shall be separate from the terms and conditions of a pet insurance policy sold by the pet insurer or producer.

(6) Documents and correspondence provided to a consumer regarding a wellness program shall clearly identify the entity providing the wellness program.

(7) The products or coverages available through the wellness program shall not duplicate products or coverages available through the pet insurance policy.

(8) The advertising of the wellness program shall not be misleading or false and shall comply with this section.

(c) Coverages included in the pet insurance policy contract described as “wellness” benefits are insurance.

(d) (1) A wellness program sold by an insurer shall be deemed to be insurance.

(2) Notwithstanding paragraph (1), a wellness program sold by an insurer shall not be deemed to be insurance if all of the following are true:

(A) The wellness program services are provided by an entity other than an insurer.

(B) The wellness program is marketed under the name of the entity providing wellness program services.

(C) The wellness program does not constitute insurance pursuant to subdivision (e).

(e) If a wellness program undertakes to indemnify a person against loss, damage, or liability arising from a contingent or unknown event, it is transacting insurance and is subject to this code.

history: (History: Added by Stats. 2024, Ch. 612, Sec. 4. (SB 1217) Effective January 1, 2025.)


text:
(a) The commissioner shall be elected by the people in the same time, place, and manner as the Governor not to exceed two four-year terms.

(b) Should a vacancy occur during the term of office, legislative confirmation shall be required for the position of commissioner in the same manner and procedure as that required by Section 5 of Article V of the California Constitution.

history: (History: Amended by Stats. 1993, Ch. 1227, Sec. 4. Effective January 1, 1994. Note: This section was added on Nov. 8, 1988, by initiative Prop. 103.)

division: 3. THE INSURANCE COMMISSIONER

path: 3. THE INSURANCE COMMISSIONER > 1. Appointment, Qualification, and Offices


text:
The commissioner shall be a person competent and fully qualified to perform the duties of the office. Neither the commissioner nor any deputy or employee shall during the commissioner’s, deputy’s, or employee’s tenure of office be an officer, agent, or employee of an insurer or directly or indirectly interested in any insurer or licensee under this code, except (a) as a policyholder or (b) by virtue of relationship by blood or marriage to any person interested in any insurer or licensee.

If the commissioner or any deputy or employee holds any license or permit issued under this code, that commissioner, deputy, or employee shall surrender it for cancellation within 10 days after appointment and qualification. Upon termination of the commissioner’s, deputy’s, or employee’s office or employment, that license or permit shall be reissued for the balance of the then current license or permit year without fee or penalty.

history: (History: Amended by Stats. 2021, Ch. 50, Sec. 240. (AB 378) Effective January 1, 2022.)

chapter: 1. Appointment, Qualification, and Offices


text: The annual salary of the commissioner is provided for by Chapter 6 of Part 1 of Division 3 of Title 2 of the Government Code.

history: (History: Amended by Stats. 1951, Ch. 1613.)


text:
The commissioner may employ actuarial, technical, and administrative assistants and clerks, as the commissioner may need to discharge in proper manner the duties imposed upon the commissioner by law. The commissioner may also employ stenographic reporters to take and transcribe the testimony in any formal hearing or investigation before the commissioner, deputy, or person authorized by the commissioner.

Those employed persons shall perform the duties assigned to them by the commissioner, subject to the provisions of the civil service laws. The commissioner may incur traveling and other expenses as are necessary, convenient, or advisable for the performance of the commissioner’s duties. The provisions of this section shall not be deemed to affect or modify positions or seniority of officers or employees existing and held in the office of the commissioner immediately prior to the date this section takes effect, and all persons then serving in any capacity therein shall continue and remain in that capacity without change of position or seniority, subject to the provisions of the law regulating civil service in the same manner and to the same extent as prior to the date this section takes effect.

history: (History: Amended by Stats. 2021, Ch. 50, Sec. 241. (AB 378) Effective January 1, 2022.)


text:
(a) The commissioner may not accept, use, or in any manner benefit from payments or reimbursements made to the department for travel from any of the following:

(1) A single source that is subject to regulation by the commissioner.

(2) A private attorney or law firm that is under contract or is bidding on or under consideration for a contract to represent either the department or the commissioner in the commissioner’s official capacity.

(3) A private attorney or law firm that seeks to be awarded, or has been awarded, advocacy fees under subdivision (b) of Section 1861.10.

(4) A private attorney or law firm that has a client subject to regulation by the commissioner.

(b) For purposes of this section, any payment or reimbursement provided by a representative of a person or entity subject to regulation by the commissioner shall be deemed to be provided by the regulated person or entity.

(c) (1) The Attorney General or any other person within this state may bring a civil action for the violation of this section. The court may assess a civil penalty in the amount of three times the amount of the unlawful benefit or payment received by the commissioner.

(2) An action under this subdivision shall be filed within five years of the date on which the violation occurred. If the commissioner engages in fraudulent concealment, the five-year period shall be tolled for the period of the concealment. For the purposes of this paragraph, “fraudulent concealment” means the commissioner knowingly concealed facts related to the commissioner’s travel expenditures or reimbursements.

history: (History: Amended by Stats. 2021, Ch. 50, Sec. 242. (AB 378) Effective January 1, 2022.)


text: On the recommendation of the commissioner the Personnel Board may establish rates of compensation for insurance examiners engaged in examinations out of this State which are in excess of the rates based on the regular monthly salary ranges established for such examiners.

history: (History: Amended by Stats. 1949, Ch. 173.)


text: In the administration of the provisions of this code and other insurance laws, the commissioner may purchase reports of financial and character reporting services, and other books and reports as in the commissioner’s opinion will aid in administration.

history: (History: Amended by Stats. 2021, Ch. 50, Sec. 243. (AB 378) Effective January 1, 2022.)


text: The commissioner shall maintain offices in Sacramento, Los Angeles, San Diego, and the San Francisco Bay area.

history: (History: Amended by Stats. 2018, Ch. 37, Sec. 44. (AB 1817) Effective June 27, 2018.)


text: The governmental agency unit heretofore known as the Department of Insurance in the Business, Transportation and Housing Agency is hereby made an independent department. The Department of Insurance is under the control of the Insurance Commissioner. The removal from the Business, Transportation and Housing Agency of the Department of Insurance, effected by this section, shall not affect in any manner the deputies or employees of such governmental agency unit, except as otherwise provided by the act enacted in the 1990 portion of the 1989–90 Regular Session that amended this section, and, except as so provided, their employments and positions are hereby expressly continued in existence. The Insurance Commissioner is not a head of a department within the meaning of Sections 1061 and 11151 of the Government Code.

history: (History: Amended by Stats. 1990, Ch. 1239, Sec. 5.)


text:
The following existing positions in the Department of Insurance shall be appointed by the Governor and are exempt from the state civil service system:

(a) Chief executive officer.

(b) Deputy commissioner for the office of the ombudsman.

(c) Career executive assignment IV, in the administration and licensing services division.

history: (History: Added by Stats. 2002, Ch. 1124, Sec. 38. Effective September 30, 2002.)