HB 1503

1
A bill to be entitled
2An act relating to insurer interests in certain motor
3vehicle repair shops; amending s. 559.901, F.S.; providing
4a popular name; amending s. 559.903, F.S.; providing
5definitions; amending s. 559.921, F.S.; providing a civil
6penalty; providing for an administrative fine for certain
7violations; creating s. 559.9222, F.S.; prohibiting
8insurer interests in certain motor vehicle repair shops;
9creating s. 559.9223, F.S.; providing for a favored
10facility agreement presumption; creating s. 559.9224,
11F.S.; providing conditions for contracts between insurers
12and certain motor vehicle repairs shops; creating s.
13559.9225, F.S.; providing notice requirements for certain
14motor vehicle repair shops; creating s. 559.9226, F.S.;
15specifying prohibited acts; creating s. 559.9227, F.S.;
16requiring certain agreements to be negotiated and executed
17to prevent conflicts of interest; creating s. 559.9228,
18F.S.; authorizing insurers to provide certain support
19services to certain repair shops under certain
20circumstances; creating s. 559.9229, F.S.; providing
21certain sections do not confer immunity from certain
22antitrust laws; providing an effective date.
23
24Be It Enacted by the Legislature of the State of Florida:
25
26     Section 1.  Section 559.901, Florida Statutes, is amended
27to read:
28     559.901  Short title.--Sections 559.901-559.9229 559.901-
29559.901-559.9221 shall be known and may be referred to by the
30popular name cited as the "Florida Motor Vehicle Repair Act."
31     Section 2.  Section 559.903, Florida Statutes, is amended
32to read:
33     559.903  Definitions.--As used in this act:
34     (1)  "Arm's length transaction" means the standard of
35conduct under which two parties having substantially equal
36bargaining power, each acting in its own interest, would
37negotiate or carry out a particular transaction.
38     (2)  "Claims center" means a location designated by an
39insurer where a claims adjuster, employee, or agent of the
40insurer performs an initial damage estimate on a vehicle under
41the terms of an insurance policy.
42     (3)(1)  "Customer" means the person who signs the written
43repair estimate or any other person whom the person who signs
44the written repair estimate designates on the written repair
45estimate as a person who may authorize repair work.
46     (4)(2)  "Department" means the Department of Agriculture
47and Consumer Services.
48     (5)(3)  "Employee" means an individual who is employed full
49time or part time by a motor vehicle repair shop and performs
50motor vehicle repair.
51     (6)  "Favored facility agreement" means an agreement
52between an insurer and a motor vehicle repair shop under which
53the insurer agrees to recommend, directly or indirectly, to its
54policyholders or other beneficiaries under the insurer's
55policies, that the policyholder or other beneficiary obtain
56repairs at that motor vehicle repair shop or in any other way
57agrees to influence its policyholders or other beneficiaries
58under the insurer's policies to obtain repairs at that motor
59vehicle repair shop.
60     (7)(4)  "Final estimate" means the last estimate approved
61by the customer either in writing or orally, as evidenced by the
62written repair estimate.
63     (8)  "Insurer" means any person authorized under the
64Florida Insurance Code to transact insurance in this state.
65     (9)(5)  "Motor vehicle" means any automobile, truck, bus,
66recreational vehicle, motorcycle, motor scooter, or other motor
67powered vehicle, but does not include trailers, mobile homes,
68travel trailers, trailer coaches without independent motive
69power, watercraft or aircraft, or special mobile equipment as
70defined in s. 316.003(48).
71     (10)(8)  "Motor vehicle repair" means all maintenance of
72and modifications and repairs to motor vehicles, and diagnostic
73work incident thereto, including, but not limited to, the
74rebuilding or restoring of rebuilt vehicles, body work,
75painting, warranty work, and other work customarily undertaken
76by motor vehicle repair shops.
77     (11)(6)  "Motor vehicle repair shop" means any person who,
78for compensation, engages or attempts to engage in the repair of
79motor vehicles owned by other persons and includes, but is not
80limited to: mobile motor vehicle repair shops, motor vehicle and
81recreational vehicle dealers; garages; service stations; self-
82employed individuals; truck stops; paint and body shops; brake,
83muffler, or transmission shops; and shops doing glass work. Any
84person who engages solely in the maintenance or repair of the
85coach portion of a recreational vehicle is not a motor vehicle
86repair shop.
87     (12)(7)  "Place of business" means a physical place where
88the business of motor vehicle repair is conducted, including any
89vehicle constituting a mobile motor vehicle repair shop from
90which the business of motor vehicle repair is conducted.
91     (13)  "Support services" means basic services, provided
92nonspecifically, that are provided internally and to each
93affiliate or subsidiary by an insurer, its parent company, or a
94separate affiliate created to provide basic corporate support.
95The term does not include a service related to the operation of
96a motor vehicle repair shop if that service would have no value
97or minimal value to any other type of business.
98     (14)  "Tied motor vehicle repair shop" means a motor
99vehicle repair shop in which an insurer owns an interest.
100     Section 3.  Subsections (4), (5), and (7) of section
101559.921, Florida Statutes, are amended to read:
102     559.921  Remedies.--
103     (4)(a)  The department may enter an order imposing one or
104more of the penalties set forth in paragraph (b) if the
105department finds that a motor vehicle repair shop:
106     1.  Violated or is operating in violation of any of the
107provisions of this part or of the rules adopted or orders issued
108thereunder;
109     2.  Made a material false statement in any application,
110document, or record required to be submitted or retained under
111this part;
112     3.  Refused or failed, or any of its principal officers
113have refused or failed, after notice, to produce any document or
114record or disclose any information required to be produced or
115disclosed under this part or the rules of the department;
116     4.  Made a material false statement in response to any
117request or investigation by the department, the Department of
118Legal Affairs, or the state attorney; or
119     5.  Has intentionally defrauded the public through
120dishonest or deceptive means.
121     (b)  Upon a finding as set forth in paragraph (a), the
122department may enter an order doing one or more of the
123following:
124     1.  Issuing a notice of noncompliance pursuant to s.
125120.695.
126     2.  Imposing an administrative fine not to exceed $1,000
127per violation for each act which constitutes a violation of ss.
128559.901-559.9221 this part or a rule or order.
129     3.  Imposing an administrative fine of not less than $1,000
130nor more than $5,000 for each act which constitutes a violation
131of ss. 559.9222-559.9229. Each day during which a violation of
132ss. 559.9222-559.9229 occurs constitutes a separate violation.
133The amount of the administrative fine shall be based on the
134seriousness of the violation and must reflect the following
135factors:
136     a.  The nature, circumstances, extent, and gravity of the
137act or omission that constitutes the violation.
138     b.  The economic harm caused by the violation.
139     c.  The history of previous violations.
140     d.  The need to deter future violations by the person
141charged with a violation.
142     e.  Efforts, if any, made to correct the violation.
143     f.  Any other factors the court considers appropriate to
144implement the remedial intent of this chapter.
145     4.3.  Directing that the motor vehicle repair shop cease
146and desist specified activities.
147     5.4.  Refusing to register or revoking or suspending a
148registration.
149     6.5.  Placing the registrant on probation for a period of
150time, subject to such conditions as the department may specify.
151     (c)  The administrative proceedings which could result in
152the entry of an order imposing any of the penalties specified in
153paragraph (b) shall be conducted in accordance with chapter 120.
154     (5)(a)  The department or the state attorney, if a
155violation of this part occurs in his or her judicial circuit,
156shall be the enforcing authority for purposes of this part and
157may bring a civil action in circuit court for temporary or
158permanent injunctive relief and may seek other appropriate civil
159relief, including a civil penalty not to exceed $1,000 for each
160violation of ss. 559.904-559.921 and a civil penalty of not less
161than $1,000 and not more than $5,000 for a violation of ss.
162559.9222-559.9229, restitution and damages for injured
163customers, court costs, and reasonable attorney's fees.
164     (b)  The enforcing authority may terminate any
165investigation or action upon agreement by the offender to pay a
166stipulated civil penalty, to make restitution or pay damages to
167customers, or to satisfy any other relief authorized herein and
168requested by the department.
169     (7)  If, in any proceeding brought pursuant to ss. 559.904-
170559.921 this part, it is determined that the repairs and costs
171thereof were in fact authorized, orally or in writing, the
172repairs were completed in a proper manner, and the consumer
173benefited therefrom, then the enforcing authority may consider
174such factors in assessing penalties or damages and may award the
175reasonable value of such repairs.
176     Section 4.  Section 559.9222, Florida Statutes, is created
177to read:
178     559.9222  Insurer interests; exclusivity.--
179     (1)  Except as provided by this section, an insurer may not
180own or acquire an interest in a motor vehicle repair shop.
181     (2)  An insurer that owns an interest in a tied motor
182vehicle repair shop that was open for business, or on which
183construction had commenced, on January 1, 2004, may maintain
184that ownership interest and may operate that facility.
185     (3)  An insurer may relocate a tied motor vehicle repair
186shop described by subsection (2) but may not obtain an ownership
187interest in any additional facility not described by that
188subsection.
189     (4)  Subsections (2) and (3) apply to an insurer only if
190the insurer and its tied motor vehicle repair shop are in
191compliance with ss. 559.9222-559.9229.
192     (5)  Unless otherwise specifically provided, this part
193provides the exclusive authority and rules applicable to the
194regulation of the relations between an insurer and a tied motor
195vehicle repair shop.
196     Section 5.  Section 559.9223, Florida Statutes, is created
197to read:
198     559.9223  Favored facility agreement presumed.--An insurer
199is presumed to have a favored facility agreement with a motor
200vehicle repair shop in which it owns an interest.
201     Section 6.  Section 559.9224, Florida Statutes, is created
202to read:
203     559.9224  Contractual conditions.--
204     (1)  An insurer that owns an interest in a motor vehicle
205repair shop may be a party to only one favored facility
206agreement.
207     (2)  The terms under which the insurer enters into a
208favored facility agreement must be identical for all motor
209vehicle repair shops, including tied motor vehicle repair shops.
210However, an insurer may, as necessary, vary the terms to
211implement technical differences required by geographical factors
212or other legitimate business factors.
213     (3)  Except as provided by subsection (4), an insurer may
214not cancel a favored facility agreement until the expiration of
215the 30th day after the date on which the insurer provides notice
216to the motor vehicle repair shop of the insurer's intent to
217cancel the agreement. The insurer shall include with the notice
218a statement explaining the reason for the cancellation of the
219agreement.
220     (4)  An insurer may summarily cancel a favored facility
221agreement with a motor vehicle repair shop if the insurer, a
222policyholder of the insurer, or another beneficiary under the
223insurer's policy establishes reasonable grounds to believe that
224the motor vehicle repair shop is fraudulent in its dealings with
225the insurer or the policyholder or other beneficiaries under the
226insurer's policy.
227     Section 7.  Section 559.9225, Florida Statutes, is created
228to read:
229     559.9225  Notice.--
230     (1)  An insurer that owns an interest in a motor vehicle
231repair shop shall post the following notice in each of its tied
232motor vehicle repair shops:
233
234"THIS MOTOR VEHICLE REPAIR SHOP IS OWNED IN WHOLE OR IN PART BY
235(insert name of insurer here). YOU ARE HEREBY NOTIFIED THAT YOU
236ARE ENTITLED TO SEEK REPAIRS AT ANY MOTOR VEHICLE REPAIR SHOP OF
237YOUR CHOICE."
238
239     (2)  The notice required by subsection (1) must be posted
240prominently in a location in which it is likely to be seen and
241read by a customer of the motor vehicle repair shop.
242     Section 8.  Section 559.9226, Florida Statutes, is created
243to read:
244     559.9226  Prohibited acts.--An insurer may not:
245     (1)  Condition the provision of a product, service,
246insurance policy renewal, pricing, or other benefit on the
247purchase of any good or service from its tied motor vehicle
248repair shops.
249     (2)  Share information with its tied motor vehicle repair
250shops that is not made available on identical terms and
251conditions to other motor vehicle repair shops with which the
252insurer has entered into a favored facility agreement;
253     (3)  Engage in a joint marketing program with its tied
254motor vehicle repair shops.
255     (4)  Provide its tied motor vehicle repair shops with a
256recommendation, referral, description, advantage, or access to
257its policyholders or other beneficiaries under its insurance
258policies that is not provided on identical terms to other motor
259vehicle repair shops with which the insurer has entered into a
260favored facility agreement.
261     (5)  Provide a tied motor vehicle repair shop access to the
262insurer's products or services on terms and conditions different
263from those under which the insurer provides access to the same
264products or services to another motor vehicle repair shop with
265which the insurer has entered into a favored facility agreement.
266     (6)  Allow a tied motor vehicle repair shop to use the
267insurer's name, trademark, trade name, brand, or logo in a
268manner different than that allowed for any other favored
269facility.
270     (7)  Subsidize the business activities or operating
271expenses of a tied motor vehicle repair shop.
272     (8)  Directly or indirectly require a policyholder of the
273insurer or other beneficiary under the insurer's policy to
274obtain a damage estimate on a vehicle covered by the insurance
275policy at a tied motor vehicle repair shop.
276     (9)  Authorize or allow a person representing the insurer,
277whether an employee or an independent contractor, to recommend
278to a policyholder or other beneficiary under the insurance
279policy that the policyholder or other beneficiary obtain motor
280vehicle repair at a tied motor vehicle repair shop, except to
281the same extent that the person recommends other motor vehicle
282repair shops with whom the insurer has entered into a favored
283facility agreement.
284     (10)  Require a policyholder or beneficiary to use a claims
285center located on the premises of a tied motor vehicle repair
286shop.
287     (11)  Enter into a favored facility agreement exclusively
288with its tied motor vehicle repair shops.
289     (12)  Retaliate or discriminate against a person who files
290an action as provided by this part.
291     (13)  Retaliate or discriminate against a person who
292assists or participates in any manner in an investigation,
293judicial proceeding, or other action brought or maintained as
294provided by this part.
295     (14)  Include earnings or losses of a tied motor vehicle
296repair shop in a rate filing made under chapter 627.
297     Section 9.  Section 559.9227, Florida Statutes, is created
298to read:
299     559.9227  Conflict of interest prohibited.--Except as
300otherwise provided by this part, an agreement between an insurer
301and its tied motor vehicle repair shop must be negotiated and
302executed as an arm's length transaction.
303     Section 10.  Section 559.9228, Florida Statutes, is created
304to read:
305     559.9228  Support services.--
306     (1)  Notwithstanding this part, and except as provided by
307subsection (2), an insurer may provide support services to its
308tied motor vehicle repair shops if those services:
309     (a)  Are priced at a level that is fair and reasonable to
310both the insurer and the tied motor vehicle repair shop.
311     (b)  Do not directly or indirectly confer a competitive
312advantage to the tied motor vehicle repair shop.
313     (2)  Notwithstanding subsection (1), an agreement by an
314insurer to provide support services to its tied motor vehicle
315repair shop may not create the potential for confusion among the
316policyholders of the insurer, other beneficiaries of an
317insurance policy issued by the insurer, or other parties.
318     Section 11.  Section 559.9229, Florida Statutes, is created
319to read:
320     559.9229  Antitrust enforcement.--Sections 559.9222-
321559.9222-559.9229 do not confer immunity from an antitrust law
322of this state or the United States. A sanction or penalty
323imposed in an action brought under this part is in addition to
324other relief granted on the basis of the violation of an
325antitrust law of this state or the United States.
326     Section 12.  This act shall take effect upon becoming a
327law.


CODING: Words stricken are deletions; words underlined are additions.