HOUSE AMENDMENT
Bill No. HB 1787
Amendment No. 1 (for drafter's use only)
CHAMBER ACTION
Senate House
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5 ORIGINAL STAMP BELOW
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11 The Committee on Insurance offered the following:
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13 Amendment (with title amendment)
14 On page 9, line 16 through page 32, line 19
15 remove from the bill: all of said lines
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17 and insert in lieu thereof:
18 (e) Uses any advertisement that would mislead or
19 otherwise cause a reasonable person to believe mistakenly that
20 the state or federal government is responsible for the motor
21 vehicle service agreement sales activity of any person or
22 stands behind any person's credit or that any person, the
23 state, or the federal government guarantees any returns on
24 motor vehicle service agreements or is a source of payment of
25 any motor vehicle service agreement obligation of or sold by
26 any person.
27 (2) FALSE INFORMATION AND ADVERTISING
28 GENERALLY.--Knowingly making, publishing, disseminating,
29 circulating, or placing before the public, or causing,
30 directly or indirectly, to be made, published, disseminated,
31 circulated, or placed before the public:
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HOUSE AMENDMENT
Bill No. HB 1787
Amendment No. 1 (for drafter's use only)
1 (a) In a newspaper, magazine, or other publication;
2 (b) In the form of a notice, circular, pamphlet,
3 letter, or poster;
4 (c) Over any radio or television station; or
5 (d) Over the Internet, electronically, or in any other
6 way,
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8 an advertisement, announcement, or statement containing any
9 assertion, representation, or statement with respect to the
10 business of motor vehicle service agreements, which assertion,
11 representation, or statement is untrue, deceptive, or
12 misleading.
13 (3) DEFAMATION.--Knowingly making, publishing,
14 disseminating, or circulating, directly or indirectly, or
15 aiding, abetting, or encouraging the making, publishing,
16 disseminating, or circulating of, any oral or written
17 statement, or any pamphlet, circular, article, or literature,
18 which is false or maliciously critical of, or derogatory to,
19 any person and which is calculated to injure such person.
20 (4) BOYCOTT, COERCION, AND INTIMIDATION.--Entering
21 into any agreement to commit, or by any concerted action
22 committing, any act of boycott, coercion, or intimidation
23 resulting in, or tending to result in, unreasonable restraint
24 of, or monopoly in, the business of motor vehicle service
25 agreements.
26 (5) FALSE STATEMENTS AND ENTRIES.--
27 (a) Knowingly:
28 1. Filing with any supervisory or other public
29 official;
30 2. Making, publishing, disseminating, or circulating;
31 3. Delivering to any person;
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HOUSE AMENDMENT
Bill No. HB 1787
Amendment No. 1 (for drafter's use only)
1 4. Placing before the public; or
2 5. Causing, directly or indirectly, to be made,
3 published, disseminated, circulated, delivered to any person,
4 or placed before the public,
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6 any false statement.
7 (b) Knowingly making any false entry of a material
8 fact in any book, report, or statement of any person, or
9 knowingly failing to make a true entry of any material fact
10 pertaining to the business of such person in any book, report,
11 or statement of such person.
12 (6) UNFAIR DISCRIMINATION.--Knowingly making or
13 permitting any unfair discrimination between individuals of
14 the same actuarially supportable class and essentially the
15 same hazard, in the amount of premium, policy fees, or rates
16 charged for any motor vehicle service agreement, in any of the
17 terms or conditions of such agreement, or in any other manner
18 whatsoever.
19 (7) UNLAWFUL REBATES.--Except as otherwise expressly
20 provided by law, or in an applicable filing with the
21 department, knowingly:
22 (a) Permitting, or offering to make, or making, any
23 contract or agreement as to such contract other than as
24 plainly expressed in the motor vehicle service agreement
25 issued thereon;
26 (b) Paying, allowing, or giving, or offering to pay,
27 allow, or give, directly or indirectly, as inducement to such
28 motor vehicle service agreement, any unlawful rebate of
29 premiums payable on the agreement, any special favor or
30 advantage in the benefits thereon, or any valuable
31 consideration or inducement not specified in the agreement;
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HOUSE AMENDMENT
Bill No. HB 1787
Amendment No. 1 (for drafter's use only)
1 (c) Giving, selling, or purchasing, or offering to
2 give, sell, or purchase, as an inducement to such motor
3 vehicle service agreement or in connection therewith, any
4 stocks, bonds, or other securities of any insurance company,
5 service agreement company, or other corporation, association,
6 or partnership, or any dividends or profits accrued thereon,
7 or anything of value not specified in the motor vehicle
8 service agreement.
9 (8) UNFAIR CLAIM SETTLEMENT PRACTICES.--
10 (a) Attempting to settle claims on the basis of an
11 application or any other material document which was altered
12 without notice to, or knowledge or consent of, the service
13 agreement holder;
14 (b) Making a material misrepresentation to the service
15 agreement holder for the purpose and with the intent of
16 effecting settlement of such claims, loss, or damage under
17 such contract on less favorable terms than those provided in,
18 and contemplated by, such contract; or
19 (c) Committing or performing with such frequency as to
20 indicate a general business practice any of the following
21 practices:
22 1. Failure to adopt and implement internal standards
23 for the investigation of claims;
24 2. Misrepresentation of pertinent facts or contract
25 provisions relating to coverages at issue;
26 3. Failure to acknowledge and act promptly upon
27 communications with respect to claims;
28 4. Denial of claims without conducting reasonable
29 investigations based upon available information;
30 5. Failure to affirm or deny full or partial coverage
31 of claims and, as to partial coverage, the dollar amount or
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HOUSE AMENDMENT
Bill No. HB 1787
Amendment No. 1 (for drafter's use only)
1 extent of coverage, or failure to provide a written statement
2 that the claim is being investigated, upon written request of
3 the service agreement holder within 30 days after
4 proof-of-loss statements have been completed;
5 6. Failure to promptly provide a reasonable
6 explanation to the service agreement holder of the basis in
7 the contract in relation to the facts or applicable law for
8 denial of a claim or for the offer of a compromise settlement;
9 7. Failure to promptly notify the service agreement
10 holder of any additional information necessary for the
11 processing of a claim; or
12 8. Failure to clearly explain the nature of the
13 requested information and the reasons such information is
14 necessary.
15 (9) FAILURE TO MAINTAIN PROCEDURES FOR HANDLING
16 COMPLAINTS.--Failing to maintain a complete record of all
17 complaints received since the date of the last examination.
18 For purposes of this paragraph, "complaint" means any written
19 communication primarily expressing a grievance.
20 (10) DISCRIMINATORY REFUSAL TO ISSUE A
21 CONTRACT.--Refusing to issue a contract solely because of an
22 individual's race, color, creed, marital status, sex, or
23 national origin.
24 (11) MISREPRESENTATION IN SERVICE AGREEMENT
25 APPLICATIONS.--Knowingly making a false or fraudulent written
26 or oral statement or representation on, or relative to, an
27 application or negotiation for a motor vehicle service
28 agreement for the purpose of obtaining a fee, commission,
29 money, or other benefit from any insurer, service agreement
30 company, agent, broker, salesperson, or individual.
31 (12) FREE SERVICE AGREEMENTS.--
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HOUSE AMENDMENT
Bill No. HB 1787
Amendment No. 1 (for drafter's use only)
1 (a) Advertising, offering, or providing a free motor
2 vehicle service agreement as an inducement to the purchase or
3 sale of real or personal property or of services directly or
4 indirectly connected with such real or personal property.
5 (b) For the purposes of this subsection, a "free"
6 motor vehicle service agreement is:
7 1. A motor vehicle service agreement for which no
8 identifiable and additional charge is made to the purchaser of
9 such real property, personal property, or services.
10 2. A motor vehicle service agreement for which an
11 identifiable or additional charge is made in an amount less
12 than the cost of such motor vehicle service agreement as to
13 the seller or other person, other than the service agreement
14 company, providing the same.
15 3. Using the word "free" or words which imply the
16 provision of a motor vehicle service agreement without a cost
17 in connection with the advertising or offering for sale of any
18 kind of goods, merchandise, or services.
19 (13) ILLEGAL DEALINGS IN PREMIUMS; EXCESS OR REDUCED
20 CHARGES FOR MOTOR VEHICLE SERVICE AGREEMENTS.--
21 (a) Knowingly collecting any sum as a premium or
22 charge for a motor vehicle service agreement, which is not
23 then provided, or is not in due course to be provided, subject
24 to acceptance of the risk by a service agreement company or an
25 insurer, by a motor vehicle service agreement issued by a
26 service agreement company or an insurer as permitted by this
27 part.
28 (b) Knowingly collecting as a premium or charge for a
29 motor vehicle service agreement any sum in excess of or less
30 than the premium or charge applicable to such motor vehicle
31 service agreement, in accordance with the applicable
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HOUSE AMENDMENT
Bill No. HB 1787
Amendment No. 1 (for drafter's use only)
1 classifications and rates as filed with the department, and as
2 specified in the motor vehicle service agreement.
3 (14) INTERLOCKING OWNERSHIP AND MANAGEMENT.--
4 (a) Any motor vehicle service agreement company may
5 retain, invest in, or acquire the whole or any part of the
6 capital of any other motor vehicle service agreement company,
7 or have a common management with any other motor vehicle
8 service agreement company, unless such retention, investment,
9 acquisition, or common management is inconsistent with any
10 other provision of this part, or unless by reason thereof the
11 business of such insurers with the public is conducted in a
12 manner which substantially lessens competition generally in
13 the insurance business.
14 (b) Any person otherwise qualified may be a director
15 of two or more motor vehicle service agreement companies which
16 are competitors, unless the effect thereof is substantially to
17 lessen competition between motor vehicle service agreement
18 companies generally or materially tend to create a monopoly.
19 (15) FALSE CLAIMS; OBTAINING OR RETAINING MONEY
20 DISHONESTLY.--
21 (a) Any salesperson who causes to be presented to any
22 motor vehicle service agreement company a false claim for
23 payment, knowing the same to be false; or
24 (b) Any salesperson who represents any motor vehicle
25 service agreement company or collects or does business without
26 the authority of the motor vehicle service agreement company,
27 secures cash advances by false statements, or fails to turn
28 over when required, or satisfactorily account for, all
29 collections of such motor vehicle service agreement company,
30
31 shall, in addition to the other penalties provided in this
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HOUSE AMENDMENT
Bill No. HB 1787
Amendment No. 1 (for drafter's use only)
1 act, commit a misdemeanor of the second degree, punishable as
2 provided in s. 775.082 or s. 775.083.
3 (16) SLIDING.--Sliding is the act or practice of:
4 (a) Representing to the applicant that a specific
5 ancillary coverage or product is required by law in
6 conjunction with the purchase of a motor vehicle service
7 agreement when such coverage or product is not required;
8 (b) Representing to the applicant that a specific
9 ancillary coverage or product is included in the motor vehicle
10 service agreement contract applied for without an additional
11 charge when such charge is required; or
12 (c) Charging an applicant for a specific ancillary
13 coverage or product, in addition to the cost of the motor
14 vehicle service agreement coverage applied for, without the
15 informed consent of the applicant.
16
17 No provision of this section shall be deemed to prohibit a
18 service agreement company or a licensed insurer from giving to
19 service agreement holders, prospective service agreement
20 holders, and others for the purpose of advertising, any
21 article of merchandise having a value of not more than $25.
22 Section 8. Section 634.2825, Florida Statutes, is
23 created to read:
24 634.2825 Motor vehicle service agreement cost
25 specified in "price package".--
26 (1) When the premium or charge for a motor vehicle
27 service agreement or involving such property or merchandise is
28 included in the overall purchase price or financing of the
29 purchase of merchandise or property, the vendor or lender
30 shall separately state and identify the amount charged and to
31 be paid for the motor vehicle service agreement, and the
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HOUSE AMENDMENT
Bill No. HB 1787
Amendment No. 1 (for drafter's use only)
1 classifications, if any, upon which based; and the inclusion
2 or exclusion of the cost of a motor vehicle service agreement
3 in such purchase price or financing shall not increase,
4 reduce, or otherwise affect any other factor involved in the
5 cost of merchandise, property, or financing as to the
6 purchaser or borrower.
7 (2) This section does not apply to transactions which
8 are subject to the provisions of part I of chapter 520,
9 entitled "The Motor Vehicle Retail Sales Finance Act."
10 Section 9. Section 634.283, Florida Statutes, is
11 created to read:
12 634.283 Power of department to examine and
13 investigate.--The department has the power to examine and
14 investigate the affairs of every person involved in the
15 business of motor vehicle service agreements in this state in
16 order to determine whether such person has been or is engaged
17 in any unfair method of competition or in any unfair or
18 deceptive act or practice prohibited by s. 634.2815.
19 Section 10. Section 634.284, Florida Statutes, is
20 created to read:
21 634.284 Prohibited practices; hearings, witnesses,
22 appearances, production of books, and service of process.--
23 (1) Whenever the department has reason to believe that
24 any person has engaged, or is engaging, in this state in any
25 unfair method of competition or any unfair or deceptive act or
26 practice as defined in s. 634.282, or is engaging in the
27 business of motor vehicle service agreements without being
28 properly licensed as required by this part, and that a
29 proceeding by the department in respect thereto would be in
30 the interest of the public, the department shall conduct or
31 cause to have conducted a hearing in accordance with chapter
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HOUSE AMENDMENT
Bill No. HB 1787
Amendment No. 1 (for drafter's use only)
1 120.
2 (2) The department, a duly empowered hearing officer,
3 or an administrative law judge shall, during the conduct of
4 such hearing, have those powers enumerated in s. 120.569;
5 however, the penalty for failure to comply with a subpoena or
6 with an order directing discovery is limited to a fine not to
7 exceed $1,000 per violation.
8 (3) A statement of charges, notice, or order under
9 this part may be served by anyone duly authorized by the
10 department, either in the manner provided by law for service
11 of process in civil actions or by certifying and mailing a
12 copy thereof to the person affected by such statement, notice,
13 order, or other process at her or his residence or principal
14 office or place of business. The verified return by the person
15 so serving such statement, notice, order, or other process,
16 setting forth the manner of the service is proof of the same;
17 and the return postcard receipt for such statement, notice,
18 order, or other process, certified and mailed as provided in
19 this subsection, is proof of service of the same.
20 Section 11. Section 634.285, Florida Statutes, is
21 created to read:
22 634.285 Cease and desist and penalty orders.--After
23 the hearing provided for in s. 634.284, the department shall
24 enter a final order in accordance with s. 120.569. If it is
25 determined that the person charged has engaged in an unfair or
26 deceptive act or practice or the unlawful transaction of a
27 service agreement business, the department also shall issue an
28 order requiring the violator to cease and desist from engaging
29 in such method of competition, act, or practice or the
30 unlawful transaction of service agreement business. Further,
31 the department may, at its discretion, order any one or more
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HOUSE AMENDMENT
Bill No. HB 1787
Amendment No. 1 (for drafter's use only)
1 of the following penalties:
2 (1) The suspension or revocation of such person's
3 license, or eligibility for any license, if the person knew,
4 or reasonably should have known, that she or he was in
5 violation of this part.
6 (2) If it is determined that the person charged has
7 provided or offered to provide motor vehicle service
8 agreements without proper licensure, the imposition of an
9 administrative penalty not to exceed $1,000 for each service
10 agreement contract offered or effectuated.
11 Section 12. Section 634.286, Florida Statutes, is
12 created to read:
13 634.286 Appeals from orders of the department.--Any
14 person subject to an order of the department under s. 634.285
15 may obtain a review of such order by filing an appeal
16 therefrom in accordance with the provisions and procedures for
17 appeal from the orders of the department in general under s.
18 120.68.
19 Section 13. Section 634.287, Florida Statutes, is
20 created to read:
21 634.287 Penalty for violation of cease and desist
22 order.--Any person who violates a cease and desist order of
23 the department under s. 634.285 while such order is in effect,
24 after notice and hearing as provided in s. 634.284, is
25 subject, at the discretion of the department, to any one or
26 more of the following penalties:
27 (1) A monetary penalty of not more than $50,000 as to
28 all matters determined in such hearing.
29 (2) The suspension or revocation of such person's
30 license or eligibility to hold a license.
31 Section 14. Section 634.288, Florida Statutes, is
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HOUSE AMENDMENT
Bill No. HB 1787
Amendment No. 1 (for drafter's use only)
1 created to read:
2 634.288 Civil liability.--The provisions of this part
3 are cumulative to rights under the general civil and common
4 law, and no action of the department will abrogate such rights
5 to damages or other relief in any court.
6 Section 15. Effective January 1, 2002, section
7 634.3077, Florida Statutes, is amended to read:
8 634.3077 Financial requirements.--
9 (1) An association licensed under this part shall
10 maintain a funded, unearned premium reserve account,
11 consisting of unencumbered assets, equal to a minimum of 25
12 percent of the gross written premiums received by it from all
13 warranty contracts in force. Such assets shall be held in the
14 form of cash or invested in securities for investments as
15 provided in part II of chapter 625.
16 (2) An association shall maintain, at a minimum, net
17 assets equal to one-sixth of the written premiums it receives
18 for the issuance and delivery of any binder or warranty in
19 force. Net assets may be less than one-sixth of the premiums
20 written provided the association has net assets of not less
21 than $500,000 and maintains a funded, unearned premium reserve
22 account consisting of unencumbered assets equal to a minimum
23 of 40 percent of the gross written premiums received by it
24 from all warranty contracts in force which shall be held in
25 the form of cash or invested in securities for investments as
26 provided in part II of chapter 625.
27 (3) In computing the net asset requirement, goodwill;
28 franchises; customer lists; patents or trademarks; receivables
29 from or advances to officers, directors, employees,
30 salespersons, or affiliated companies; and assets deposited
31 outside the United States shall be deducted from the net
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HOUSE AMENDMENT
Bill No. HB 1787
Amendment No. 1 (for drafter's use only)
1 assets of the association.
2 (3)(4) An association shall not be required to set up
3 an unearned premium reserve if it has purchased contractual
4 liability insurance which demonstrates to the satisfaction of
5 the department that 100 percent of its claim exposure is
6 covered by such insurance. Such contractual liability
7 insurance shall be obtained from an insurer that holds a
8 certificate of authority to do business within the state or
9 from an insurer approved by the department as financially
10 capable of meeting the obligations incurred pursuant to the
11 policy. For purposes of this subsection, the contractual
12 liability policy shall contain the following provisions:
13 (a) In the event that the home warranty association is
14 unable to fulfill its obligation under its contracts issued in
15 this state for any reason, including insolvency, bankruptcy,
16 or dissolution, the contractual liability insurer will pay
17 losses and unearned premiums under such plans directly to
18 persons making claims under such contracts.
19 (b) The insurer issuing the policy shall assume full
20 responsibility for the administration of claims in the event
21 of the inability of the association to do so.
22 (c) The policy may not be canceled or not renewed by
23 either the insurer or the association unless 60 days' written
24 notice thereof has been given to the department by the insurer
25 before the date of such cancellation or nonrenewal.
26 (4)(5) An association that purchases contractual
27 liability insurance on the warranties that it issues shall
28 provide the department with claim statistics required to be
29 filed by associations not purchasing such insurance.
30 Section 16. Effective January 1, 2002, section
31 634.3078, Florida Statutes, is created to read:
13
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HOUSE AMENDMENT
Bill No. HB 1787
Amendment No. 1 (for drafter's use only)
1 634.3078 Assets and liabilities.--
2 (1) ASSETS.--In any determination of the financial
3 condition of a home warranty association, there shall be
4 allowed as assets only those assets that are owned by the home
5 warranty association company and which assets consist of:
6 (a) Cash in the possession of the home warranty
7 association, or in transit under its control, including the
8 true balance of any deposit in a solvent bank, savings and
9 loan association, or trust company which is domiciled in the
10 United States.
11 (b) Investments, securities, properties, and loans
12 acquired or held in accordance with this part, and in
13 connection therewith the following items:
14 1. Interest due or accrued on any bond or evidence of
15 indebtedness which is not in default and which is not valued
16 on a basis including accrued interest.
17 2. Declared and unpaid dividends on stock and shares,
18 unless the amount of the dividends has otherwise been allowed
19 as an asset.
20 3. Interest due or accrued upon a collateral loan
21 which is not in default in an amount not to exceed 1 year's
22 interest thereon.
23 4. Interest due or accrued on deposits or certificates
24 of deposit in solvent banks, savings and loan associations,
25 and trust companies domiciled in the United States, and
26 interest due or accrued on other assets, if such interest is
27 in the judgment of the department a collectible asset.
28 5. Interest due or accrued on current mortgage loans,
29 in an amount not exceeding in any event the amount, if any, of
30 the excess of the value of the property less delinquent taxes
31 thereon over the unpaid principal; but in no event shall
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HOUSE AMENDMENT
Bill No. HB 1787
Amendment No. 1 (for drafter's use only)
1 interest accrued for a period in excess of 90 days be allowed
2 as an asset.
3 6. Rent due or accrued on real property if such rent
4 is not in arrears for more than 3 months. However, in no event
5 shall rent accrued for a period in excess of 90 days be
6 allowed as an asset.
7 7. The unaccrued portion of taxes paid prior to the
8 due date on real property.
9 (c) Furniture, fixtures, furnishings, vehicles, and
10 equipment, if the original cost of each item is at least $200,
11 which cost shall be amortized in full over a period not to
12 exceed 5 calendar years, unless otherwise approved by the
13 department.
14 (d) Part inventories maintained for the purpose of
15 servicing products warranted. Part inventories must be listed
16 at cost. Home warranty associations companies are required to
17 maintain records to support valuation of part inventories.
18 (e) The liquidation value of prepaid expenses.
19 (f) Other assets or receivables, not inconsistent with
20 the provisions of this section, deemed by the department to be
21 available for the payment of losses and claims, at values to
22 be determined by the department.
23
24 The department, upon determining that a home warranty
25 association's asset has not been evaluated according to
26 applicable law or that it does not qualify as an asset, shall
27 require the home warranty association to properly reevaluate
28 the asset or replace the asset with an asset suitable to the
29 department within 30 days of written notification by the
30 department of this determination, if the removal of the asset
31 from the organization's assets would impair the company's
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HOUSE AMENDMENT
Bill No. HB 1787
Amendment No. 1 (for drafter's use only)
1 solvency.
2 (2) ASSETS NOT ALLOWED.--In addition to assets
3 impliedly excluded by the provisions of subsection (1), the
4 following assets expressly shall not be allowed as assets in
5 any determination of the financial condition of a home
6 warranty association:
7 (a) Goodwill, agreement holder lists, patents, trade
8 names, agreements not to compete, and other like intangible
9 assets.
10 (b) Any note or account receivable from or advances to
11 officers, directors, or controlling stockholders, whether
12 secured or not, and advances to employees, agents, or other
13 persons on personal security only.
14 (c) Stock of the home warranty association owned by it
15 directly or owned by it through any entity in which the
16 organization owns or controls, directly or indirectly, more
17 than 25 percent of the ownership interest.
18 (d) Leasehold improvements, stationery, and
19 literature, except that leasehold improvements made prior to
20 October 1, 2001, shall be allowed as an asset and shall be
21 amortized over the shortest of the following periods:
22 1. The life of the lease.
23 2. The useful life of the improvements.
24 3. The 3-year period following October 1, 2001.
25 (e) Furniture, fixtures, furnishings, vehicles, and
26 equipment, other than those items authorized under paragraph
27 (1)(c).
28 (f) Notes or other evidences of indebtedness which are
29 secured by mortgages or deeds of trust which are in default
30 and beyond the express period specified in the instrument for
31 curing the default.
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HOUSE AMENDMENT
Bill No. HB 1787
Amendment No. 1 (for drafter's use only)
1 (g) Bonds in default for more than 60 days.
2 (h) Deferred costs other than the liquidation value of
3 prepaid expenses except for those companies that reserve 100
4 percent of gross written premium.
5 (i) Any note, account receivable, advance, or other
6 evidence of indebtedness, or investment in:
7 1. The parent of the home warranty association;
8 2. Any entity directly or indirectly controlled by the
9 home warranty association's parent;
10 3. An affiliate of the parent or the home warranty
11 association; or
12 4. Officers, directors, shareholders, employees, or
13 salespersons of the home warranty association; however,
14 premium receivables under 45 days old may be considered an
15 admitted asset.
16
17 The department may, however, allow all or a portion of such
18 asset, at values to be determined by the department, if deemed
19 by the department to be available for the payment of losses
20 and claims.
21 (3) LIABILITIES.--In any determination of the
22 financial condition of a home warranty association,
23 liabilities to be charged against its assets shall include,
24 but not be limited to:
25 (a) The amount, in conformity with generally accepted
26 accounting principles, necessary to pay all of its unpaid
27 losses and claims incurred for or on behalf of an agreement
28 holder, on or prior to the end of the reporting period,
29 whether reported or unreported.
30 (b) Taxes, expenses, and other obligations due or
31 accrued at the date of the statement.
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HOUSE AMENDMENT
Bill No. HB 1787
Amendment No. 1 (for drafter's use only)
1 (c) Reserve for unearned premiums.
2
3 The department, upon determining that the home warranty
4 association has failed to report liabilities that should have
5 been reported, shall require a correct report which reflects
6 the proper liabilities to be submitted by the home warranty
7 association to the department within 10 working days of
8 receipt of written notification.
9 Section 17. Effective January 1, 2002, subsection (7)
10 is added to section 634.312, Florida Statutes, to read:
11 634.312 Filing, approval of forms.
12 (7) All home warranty contracts must disclose any
13 exclusions, restrictions, or limitations on the benefits
14 offered or the coverage provided by the home warranty contract
15 in boldfaced type, and must contain, in boldfaced type, a
16 statement on the front page of the contract substantially
17 similar to the following: "Certain items and events are not
18 covered by this contract. Please refer to the exclusions
19 listed on page _ of this document."
20 Section 18. Subsection (5) is added to section
21 634.313, Florida Statutes, to read:
22 634.313 Tax on premiums; annual statement; reports.--
23 (5) The department may by rule require each home
24 warranty association to submit to the department, as the
25 department may designate, all or part of the information
26 contained in the financial reports required by this section in
27 a computer-readable form compatible with the electronic data
28 processing system specified by the department.
29 Section 19. Section 634.318, Florida Statutes, is
30 amended to read:
31 634.318 License and appointment of sales
18
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HOUSE AMENDMENT
Bill No. HB 1787
Amendment No. 1 (for drafter's use only)
1 representatives.--Sales representatives for home warranty
2 associations and insurers shall be licensed, appointed,
3 renewed, continued, reinstated, or terminated in the same
4 manner as prescribed in chapter 626 for insurance
5 representatives in general, except they shall be exempt from
6 the fingerprinting, photo identification card, education, and
7 examination provisions. License, appointment, and other fees
8 shall be those as prescribed in s. 624.501. No employee or
9 sales representative of a home warranty association or insurer
10 may directly or indirectly solicit or negotiate insurance
11 contracts, or hold herself or himself out in any manner to be
12 an insurance agent or solicitor, unless so qualified,
13 licensed, and appointed therefor under the insurance code. A
14 home warranty association is not required to be licensed as a
15 sales representative to solicit, sell, issue, or otherwise
16 transact the home warranty agreements issued by the home
17 warranty association.
18 Section 20. Section 634.331, Florida Statutes, is
19 amended to read:
20 634.331 Coverage of property for sale.--A home
21 warranty may provide coverage of residential property during
22 the listing period of such property for a period not to exceed
23 12 months, provided that the home warranty company charges the
24 warranty purchaser a separately identifiable charge for the
25 listing list period coverage in an amount equal to at least 15
26 percent of the annual premium charged for the home warranty
27 and the charge for such coverage is due at the earlier of the
28 end of the listing period or the date the sale of the
29 residential property is closed.
30 Section 21. Subsection (6) is added to section
31 634.415, Florida Statutes, to read:
19
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HOUSE AMENDMENT
Bill No. HB 1787
Amendment No. 1 (for drafter's use only)
1 634.415 Tax on premiums; annual statement; reports;
2 quarterly statements.--
3 (6) The department may by rule require each service
4 warranty association to submit to the department, as the
5 department may designate, all or part of the information
6 contained in the financial statements and reports required by
7 this section in a computer-readable form compatible with the
8 electronic data processing system specified by the department.
9 Section 22. Section 634.419, Florida Statutes, is
10 amended to read:
11 634.419 License and appointment required.--No person
12 or entity shall solicit, negotiate, advertise, or effectuate
13 service warranty contracts in this state unless such person or
14 entity is licensed and appointed as a sales representative.
15 Sales representatives shall be responsible for the actions of
16 persons under their supervision. However, a service warranty
17 association licensed as such under this part shall not be
18 required to be licensed and appointed as a sales
19 representative to solicit, negotiate, advertise or effectuate
20 its products.
21 Section 23. Subsection (8) is added to section
22 634.436, Florida Statutes, to read:
23 634.436 Unfair methods of competition and unfair or
24 deceptive acts or practices defined.--The following methods,
25 acts, or practices are defined as unfair methods of
26 competition and unfair or deceptive acts or practices:
27 (8) FREE SERVICE WARRANTIES.--
28 (a) Advertising, offering, or providing a free service
29 warranty as an inducement to the purchase or sale of real or
30 personal property or of services directly or indirectly
31 connected with such real or personal property.
20
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HOUSE AMENDMENT
Bill No. HB 1787
Amendment No. 1 (for drafter's use only)
1 (b) For the purposes of this subsection, a "free"
2 service warranty is:
3 1. A service warranty for which no identifiable and
4 additional charge is made to the purchaser of such real
5 property, personal property, or services.
6 2. A service warranty for which an identifiable or
7 additional charge is made in an amount less than the cost of
8 such service warranty as to the seller or other person, other
9 than the service warranty association, providing the same.
10 3. Using the word "free" or words which imply the
11 provision of a service warranty without a cost in connection
12 with the advertising or offering for sale of any kind of
13 goods, merchandise, or services.
14 Section 24. Section 624.124, Florida Statutes, is
15 amended to read:
16 624.124 Motor vehicle services; exemption from
17 code.--Any person may, in exchange for fees, dues, charges, or
18 other consideration, provide any of the following services
19 related to the ownership, operation, use, or maintenance of a
20 motor vehicle without being deemed an insurer and without
21 being subject to the provisions of this code:
22 (1) Towing service.
23 (2) Procuring from an insurer group coverage for bail
24 and arrest bonds or for accidental death and dismemberment.
25 (3) Emergency service.
26 (4) Procuring prepaid legal services, or providing
27 reimbursement for legal services, except that this shall not
28 be deemed to be an exemption from chapter 642.
29 (5) Offering assistance in locating or recovering
30 stolen or missing motor vehicles.
31 (6) Paying emergency living and transportation
21
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HOUSE AMENDMENT
Bill No. HB 1787
Amendment No. 1 (for drafter's use only)
1 expenses of the owner of a motor vehicle when the motor
2 vehicle is damaged.
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4 For purposes of this section, "motor vehicle" has the same
5 meaning specified by s. 634.011(7)(6).
6 Section 25. Paragraph (a) of subsection (1) of section
7 628.4615, Florida Statutes, is amended to read:
8 628.4615 Specialty insurers; acquisition of
9 controlling stock, ownership interest, assets, or control;
10 merger or consolidation.--
11 (1) For the purposes of this section, the term
12 "specialty insurer" means any person holding a license or
13 certificate of authority as:
14 (a) A motor vehicle service agreement company
15 authorized to issue motor vehicle service agreements as those
16 terms are defined in s. 634.011(8)(7) and (9) (8);
17 Section 26. Section 634.289, Florida Statutes, is
18 created to read:
19 634.289 Rules.--The department may adopt rules, in
20 accordance with chapter 120, to identify specific methods of
21 competition or acts or practices which are prohibited by s.
22 634.282, but these rules shall not enlarge upon or extend the
23 provisions of that section.
24 Section 27. Section 634.302, Florida Statutes, is
25 created to read:
26 634.302 Powers of department; rules.--The department
27 shall administer this part, and, to that end, it has authority
28 to adopt rules pursuant to ss. 120.536(1) and 120.54 to
29 implement the provisions of this part. Such rules may include
30 rules to identify specific methods of competition or acts or
31 practices which are prohibited by s. 634.336, but the rules
22
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HOUSE AMENDMENT
Bill No. HB 1787
Amendment No. 1 (for drafter's use only)
1 shall not enlarge upon or extend the provisions of that
2 section.
3 Section 28. Section 634.402, Florida Statutes, is
4 amended to read:
5 634.402 Powers of department; rules.--The department
6 shall administer this part, and to that end it has authority
7 to adopt rules pursuant to ss. 120.536(1) and 120.54 to
8 implement the provisions of this part. Such rules may identify
9 specific methods of competition or acts or practices which are
10 prohibited by s. 634.436, but shall not enlarge upon or extend
11 the provisions of that section.
12 Section 29. This act shall take effect upon becoming a
13 law, except as otherwise provided herein.
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15
16 ================ T I T L E A M E N D M E N T ===============
17 And the title is amended as follows:
18 On page 1, line 19 through page 3, line 28
19 remove from the title of the bill: all of said lines
20
21 and insert in lieu thereof:
22 repealing s. 634.281, F.S., which provides that
23 service agreement companies and their
24 salespersons shall be subject to pt. IX of ch.
25 626, F.S., relating to service agreement
26 companies and their salespersons; creating s.
27 634.2815, F.S.; prohibiting engaging in any
28 trade practice determined to be an unfair
29 method of competition or an unfair or deceptive
30 act or practice involving the business of motor
31 vehicle service agreements; creating s.
23
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HOUSE AMENDMENT
Bill No. HB 1787
Amendment No. 1 (for drafter's use only)
1 634.282, F.S.; defining unfair methods of
2 competition and unfair or deceptive acts or
3 practices; creating s. 634.2825, F.S.;
4 requiring vendors and lenders to separately
5 state and identify the amount charged and to be
6 paid for a motor vehicle service agreement;
7 providing applicability; creating s. 634.283,
8 F.S.; providing power of the Department of
9 Insurance to examine and investigate the
10 affairs of persons involved in the business of
11 motor vehicle service agreements in the state;
12 creating s. 634.284, F.S.; authorizing the
13 department to conduct hearings with respect to
14 specified prohibited practices; providing a
15 fine for failure to comply with a subpoena or
16 an order directing discovery; creating s.
17 634.285, F.S.; providing for the issuance of
18 cease and desist orders by the department;
19 providing specified penalties; creating s.
20 634.286, F.S.; providing for appeals of orders
21 of the department; creating s. 634.287, F.S.;
22 providing penalties for violation of a cease
23 and desist order of the department; creating s.
24 634.288, F.S.; providing for civil liability;
25 amending s. 634.3077, F.S.; eliminating
26 specified assets to be deducted in computing
27 the net asset requirement of a home warranty
28 association; creating s. 634.3078, F.S.;
29 specifying allowable assets and liabilities
30 with respect to the determination of the
31 financial condition of a service warranty
24
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HOUSE AMENDMENT
Bill No. HB 1787
Amendment No. 1 (for drafter's use only)
1 association; amending s. 634.313, F.S.;
2 providing for submission of annual statements
3 and financial reports to the Department of
4 Insurance in a computer-readable form; amending
5 s. 634.312, F.S.; filing and approval of forms;
6 amending s. 634.318, F.S.; providing that a
7 home warranty association is not required to be
8 licensed as a salesperson to solicit, sell,
9 issue, or otherwise transact the home warranty
10 agreements issued by the association; amending
11 s. 634.331, F.S.; revising terminology with
12 respect to coverage of property for sale;
13 amending s. 634.415, F.S.; providing for
14 submission of statements and reports to the
15 Department of Insurance in a computer-readable
16 form; amending s. 634.419, F.S.; providing that
17 a service warranty association is not required
18 to be licensed as a sales representative to
19 solicit, sell, or issue service warranty
20 agreements issued by the association; amending
21 s. 634.436, F.S.; including advertising,
22 offering, or providing a free service warranty
23 as an inducement to specified purchases or
24 sales among acts or practices which constitute
25 unfair methods of competition and unfair or
26 deceptive acts or practices; amending ss.
27 624.124 and 628.4615, F.S.; correcting cross
28 references; creating s. 634.289, F.S.; relating
29 to rulemaking authority; amending s. 634.302,
30 F.S.; relating to rulemaking authority;
31 amending s. 634.402, F.S.; relating to
25
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HOUSE AMENDMENT
Bill No. HB 1787
Amendment No. 1 (for drafter's use only)
1 rulemaking authority; providing for effective
2 dates.
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