The Florida Senate

634.121  Filing of forms, required procedures, provisions.--

(1)  A service agreement form or related form may not be issued or used in this state unless it has been filed with and approved by the office. Upon application for a license, the office shall require the applicant to submit for approval each brochure, pamphlet, circular, form letter, advertisement, or other sales literature or advertising communication addressed or intended for distribution. The office shall disapprove any document which is untrue, deceptive, or misleading or which contains misrepresentations or omissions of material facts.

(a)  After an application has been approved, a licensee is not required to submit brochures or advertisement to the office for approval; however, a licensee may not have published, and a person may not publish, any brochure or advertisement which is untrue, deceptive, or misleading or which contains misrepresentations or omissions of material fact.

(b)  For purposes of this section, brochures and advertising includes, but is not limited to, any report, circular, public announcement, certificate, or other printed matter or advertising material which is designed or used to solicit or induce any persons to enter into any motor vehicle service agreement.

(c)  The office shall disapprove any service agreement form providing vehicle protection expenses which does not clearly indicate either the method for calculating the benefit to be paid or provided to the service agreement holder or the preestablished flat amount payable pursuant to the terms of the service agreement. All service agreement forms providing vehicle protection expenses shall clearly indicate the term of the service agreement, whether new or used cars are eligible for the vehicle protection product, and that the service agreement holder may not make any claim against the Florida Insurance Guarantee Association for vehicle protection expenses. The service agreement shall be provided to a service agreement holder on a form that provides only vehicle protection expenses. A service agreement form providing vehicle protection expenses must state that the service agreement holder must have in force at the time of loss comprehensive motor vehicle insurance coverage as a condition precedent to requesting payment of vehicle protection expenses.

(2)  Every filing required under this section must be made not less than 30 days in advance of issuance or use. At the expiration of 30 days from the date of filing, a form so filed becomes approved unless prior thereto it has been affirmatively disapproved by written notice of the office. The office may extend by not more than an additional 15 days the period within which it may affirmatively approve or disapprove any form by giving notice of extension before the expiration of the initial 30-day period. At the expiration of any period as so extended and in the absence of prior affirmative disapproval, the form becomes approved.

(3)  Before the sale of any service agreement, written notice must be given to the prospective purchaser by the service agreement company or its agent or salesperson, on an office-approved form, that purchase of the service agreement is not required in order to purchase or obtain financing for a motor vehicle.

(4)  All motor vehicle service agreements are assignable in a consumer transaction and must contain a statement in conspicuous, boldfaced type, informing the purchaser of the service agreement of her or his right to assign it to a subsequent retail purchaser of the motor vehicle covered by the service agreement and all conditions on such right of transfer. The assignment must occur within a period of time specified in the agreement, which period may not expire earlier than 15 days after the date of the sale or transfer of the motor vehicle. The service agreement company may charge an assignment fee not to exceed $40.

(5)(a)  Each service agreement must contain a cancellation provision. Any service agreement is cancelable by the purchaser within 60 days after purchase. The refund must be 100 percent of the gross premium paid, less any claims paid on the agreement. A reasonable administrative fee may be charged not to exceed 5 percent of the gross premium paid by the agreement holder.

(b)  After the service agreement has been in effect for 60 days, it may not be canceled by the insurer or service agreement company unless:

1.  There has been a material misrepresentation or fraud at the time of sale of the service agreement;

2.  The agreement holder has failed to maintain the motor vehicle as prescribed by the manufacturer;

3.  The odometer has been tampered with or disabled and the agreement holder has failed to repair the odometer; or

4.  For nonpayment of premium by the agreement holder, in which case the service agreement company shall provide the agreement holder notice of cancellation by certified mail.

If the service agreement is canceled by the insurer or service agreement company, the return of premium must not be less than 100 percent of the paid unearned pro rata premium. If, after 60 days, the service agreement is canceled by the service agreement holder, the insurer or service agreement company shall return directly to the agreement holder not less than 90 percent of the unearned pro rata premium. The service agreement company remains responsible for full refunds to the consumer on canceled service agreements. However, the salesperson and agent are responsible for the refund of the unearned pro rata commission. A service agreement company may effectuate refunds through the issuing salesperson or agent.

(6)  If the service agreement is canceled, pursuant to an order of liquidation, the salesperson or agent is responsible for refunding, and must refund, to the receiver the unearned pro rata commission.

(7)  If a service agreement company violates any lawful order of the office or fails to meet its contractual obligations under this part, upon notice from the office, the sales representative or agent must refund to the service agreement holder the unearned pro rata commission, unless the sales representative or agent has made other arrangements, satisfactory to the office, with the service agreement holder.

(8)  Each service agreement, which includes a copy of the application form, must be mailed or delivered to the agreement holder within 45 days after the date of purchase.

(9)  Each service agreement form must contain in conspicuous, boldfaced type any statement or clause that places restrictions or limitations on the benefits offered or disclose such restrictions or limitations in regular type in a section of the service agreement containing a conspicuous, boldfaced type heading.

(10)  If an insurer or service agreement company intends to use or require the use of remanufactured or used replacement parts, each service agreement form as well as all service agreement brochures must contain in conspicuous, boldfaced type a statement to that effect.

(11)  Each service agreement form as well as all service agreement company sales brochures must clearly identify the name, address, and Florida license number of the licensed insurer or service agreement company.

(12)  If a service agreement contains a rental car provision, it must disclose the terms and conditions of this benefit in conspicuous, boldfaced type or disclose such restrictions or limitations in regular type in a section of the service agreement containing a conspicuous, boldfaced type heading.

History.--s. 12, ch. 59-110; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 8, ch. 78-231; ss. 2, 3, ch. 81-318; ss. 11, 32, 33, ch. 82-234; s. 26, ch. 83-288; ss. 19, 68, ch. 91-106; ss. 8, 20, ch. 93-195; s. 3, ch. 95-245; s. 2, ch. 97-74; s. 457, ch. 97-102; s. 2, ch. 99-293; s. 3, ch. 2002-86; s. 3, ch. 2003-150; s. 1428, ch. 2003-261.