Regulation of Home Protection Companies

Statutory and Regulatory Authority

The California Department of Insurance (CDI) regulates home protection companies pursuant to certain statutes and regulations. The following information and links are provided as aids only. They are NOT provided as exhaustive lists of applicable authorities. Applicants must comply with all applicable law.

California Insurance Code (CIC) sections 12740-12764 (the "Home Protection Law") address, among other things, definitions and licensing for Home Protection companies, with CIC Section 12743 identifying the insurance code sections applicable to home protection contracts and companies and CIC section 12750-12757 setting forth fiscal requirements for home protection companies. See also CIC Section 820-860 (securities issues), CIC section 880-886 (name registration), 10 Cal. Code Regs. (CCR) section 2570, et seq. (home protection regulations) and 10 CCR section 2600, et seq. (securities permits).

California Domestic Home Protection Company

The application procedures for home protection companies are outlined in 10 CCR section 2570.04.  Below is CDI’s recommended procedure for California domestic home protection companies. 

1. Incorporate under California's corporations laws. See, e.g. California Corporations Code (CCC) section 300, et seq. 

2. Apply for corporate name approval from the Commissioner pursuant to CIC Section 880-886. See Name Approval Instructions.

3. File an application for a securities permit with the Commissioner pursuant to 10 CCR section 2570.08 and 10 CCR section 2603 et seq.

   1. When filing an application for a securities permit, please pay special attention to 10 CCR section 2570.08 (exhibits to be submitted in support of a security permit application); 10 CCR section 2603.12 (exhibits required for all security permit applications), and 10 CCR section 2613.04 (organizational permit sample).

4. Report of Transaction and Examination
   1. Once the California Department of Insurance issues the securities permit, the applicant must be capitalized in accordance with the terms and conditions of the security permit issued. Following capitalization, the applicant must correct any deficiencies found during the field examination conducted by the Commissioner.
5. Application for a License to Issue Home Protection Contracts in California
   1. Following a satisfactory examination by the Commissioner, the applicant may seek a Certificate of Authority to issue home protection contracts in California, by filing the Home Protection Company Application pursuant to 10 CCR section 2570.06 and obtain a license from the Commissioner to conduct a home protection company business.
   2. The Home Protection Law is implemented by 10 CCR sections 2570 -2570.09, pursuant to authority granted in CIC section 720. Home protection contracts and companies shall not be governed by any provision of the Insurance Code, except for the sections enumerated in CIC section 12743. This section, among others, makes Certificate of Authority provisions applicable, including CIC section 699 (unincorporated insurers), 700 (admission required), 705.1 (application fees), 707 (domestic insurer), 715 (maximum organization expense), 717 (qualifications), 718 (conduct of business in conformity with law), and 720 (regulations).
   3. Please also see the Department’s Home Protection Company webpage regarding applications to issue home protection contracts in California.