Department issues Cease and Desist Order to protect Orange County consumers from illegal extended warranties sales
News: 2020 Press Release
ORANGE, Calif. - The California Department of Insurance (CDI) issued a Cease and Desist Order effective immediately upon Elite Integrity, LLC doing business as Auto Protection Plus (APP), in Garden Grove, and its controlling manager, Kamisha Daniel, of Irvine, for allegedly selling illegal Vehicle Service Contracts (“VSCs”) to at least six California consumers from 2018 to 2020.
Generally, VSCs, often called ‘extended warranties’, are offered to consumers by car dealers when they purchase a car. Most VSCs typically provide coverage for repairs due to mechanical failure. Others offer coverage for routine services, such as oil changes and tire rotation, or other services such as paintless dent removal, glass or key replacement, or tire and wheel repair.
The Cease and Desist Order alleges both APP and Daniel were not licensed by the Department of Insurance to sell VSCs to California residents. Several California residents were contacted and confirmed APP made direct contact with them and completed a VSC sale.
Under the Order, APP and Daniel are to immediately stop selling VSCs in any capacity and cease acting as an insurance agent or producer or in any other capacity in the State of California for which they do not hold a valid license, permit, or Certificate of Authority.
VSCs may be sold legally to Californians only when specific criteria are met, which APP and Daniel failed to do.
- Every VSC must be filed with CDI before it can be sold.
- Companies responsible for paying the claims on VSCs must be licensed by CDI, unless the company is a vehicle manufacturer, distributor or dealer.
- These companies must carry CDI-preapproved backup insurance insuring every VSC they sell, unless they receive an exemption from CDI by proving their company has a net worth of at least $100 million.
- VSCs can only be sold through dealerships licensed by the Department of Motor Vehicles. Direct sales to consumers are illegal.
Californians who purchased an APP vehicle service contract should contact Supervising Investigator Matthew DeDen at (714) 712-7655.
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Led by Insurance Commissioner Ricardo Lara, the California Department of Insurance is the consumer protection agency for the nation's largest insurance marketplace and safeguards all of the state’s consumers by fairly regulating the insurance industry. Under the Commissioner’s direction, the Department uses its authority to protect Californians from insurance rates that are excessive, inadequate, or unfairly discriminatory, oversee insurer solvency to pay claims, set standards for agents and broker licensing, perform market conduct reviews of insurance companies, resolve consumer complaints, and investigate and prosecute insurance fraud. Consumers are urged to call 1-800-927-4357 with any questions or contact us at www.insurance.ca.gov via webform or online chat. Non-media inquiries should be directed to the Consumer Hotline at 800-927-4357. Teletypewriter (TTY), please dial 800-482-4833.