Senate Bill sb2692
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Florida Senate - 2004 SB 2692
By Senator Campbell
32-1176-04
1 A bill to be entitled
2 An act relating to motor vehicle repair;
3 amending s. 559.901, F.S.; conforming a
4 cross-reference to the Florida Motor Vehicle
5 Repair Act; amending s. 559.903, F.S.; defining
6 terms; amending s. 559.921, F.S.; providing a
7 civil penalty for specified violations;
8 creating s. 559.9222, F.S.; prohibiting
9 insurers from owning or acquiring interests in
10 motor vehicle repair shops except under
11 specified circumstances; creating s. 559.9223,
12 F.S.; creating the presumption of a favored
13 facility agreement, as defined; creating s.
14 559.9224, F.S.; prescribing conditions for
15 contracts between insurers and certain motor
16 vehicle repair shops; creating s. 559.9225,
17 F.S.; requiring certain motor vehicle repair
18 shops to give notice to customers of
19 relationships with insurers; creating s.
20 559.9226, F.S.; prohibiting specified acts by
21 insurers with respect to motor vehicle repair;
22 creating s. 559.9227, F.S.; requiring contracts
23 between insurers and tied motor vehicle repair
24 shops to be negotiated as arm's length
25 transactions; creating s. 559.9228, F.S.;
26 prescribing permissible support services that
27 an insurer may provide to a tied motor vehicle
28 repair shop; creating s. 559.9229, F.S.;
29 providing for enforcement of antitrust laws;
30 providing an effective date.
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Florida Senate - 2004 SB 2692
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1 Be It Enacted by the Legislature of the State of Florida:
2
3 Section 1. Section 559.901, Florida Statutes, is
4 amended to read:
5 559.901 Short title.--Sections 559.901-559.9229
6 559.901-559.9221 shall be known and may be cited as the
7 "Florida Motor Vehicle Repair Act."
8 Section 2. Section 559.903, Florida Statutes, is
9 amended to read:
10 559.903 Definitions.--As used in this act, the term:
11 (1) "Customer" means the person who signs the written
12 repair estimate or any other person whom the person who signs
13 the written repair estimate designates on the written repair
14 estimate as a person who may authorize repair work.
15 (2) "Department" means the Department of Agriculture
16 and Consumer Services.
17 (3) "Employee" means an individual who is employed
18 full time or part time by a motor vehicle repair shop and
19 performs motor vehicle repair.
20 (4) "Final estimate" means the last estimate approved
21 by the customer either in writing or orally, as evidenced by
22 the written repair estimate.
23 (5) "Motor vehicle" means any automobile, truck, bus,
24 recreational vehicle, motorcycle, motor scooter, or other
25 motor powered vehicle, but does not include trailers, mobile
26 homes, travel trailers, trailer coaches without independent
27 motive power, watercraft or aircraft, or special mobile
28 equipment as defined in s. 316.003(48).
29 (6) "Motor vehicle repair shop" means any person who,
30 for compensation, engages or attempts to engage in the repair
31 of motor vehicles owned by other persons and includes, but is
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Florida Senate - 2004 SB 2692
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1 not limited to: mobile motor vehicle repair shops, motor
2 vehicle and recreational vehicle dealers; garages; service
3 stations; self-employed individuals; truck stops; paint and
4 body shops; brake, muffler, or transmission shops; and shops
5 doing glass work. Any person who engages solely in the
6 maintenance or repair of the coach portion of a recreational
7 vehicle is not a motor vehicle repair shop.
8 (7) "Place of business" means a physical place where
9 the business of motor vehicle repair is conducted, including
10 any vehicle constituting a mobile motor vehicle repair shop
11 from which the business of motor vehicle repair is conducted.
12 (8) "Motor vehicle repair" means all maintenance of
13 and modifications and repairs to motor vehicles, and
14 diagnostic work incident thereto, including, but not limited
15 to, the rebuilding or restoring of rebuilt vehicles, body
16 work, painting, warranty work, and other work customarily
17 undertaken by motor vehicle repair shops.
18 (9) "Arm's length transaction" means a transaction
19 having a standard of conduct under which two parties having
20 substantially equal bargaining power, each acting in its own
21 interest, would negotiate or carry out a particular
22 transaction.
23 (10) "Claims center" means a location designated by an
24 insurer where a claims adjuster, employee, or agent of the
25 insurer performs an initial damage estimate on a vehicle under
26 the terms of an insurance policy.
27 (11) "Favored facility agreement" means an agreement
28 between an insurer and a motor vehicle repair shop under which
29 the insurer agrees to recommend, directly or indirectly, to
30 its policyholders or other beneficiaries under the insurer's
31 policies, that the policyholder or other beneficiary obtain
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Florida Senate - 2004 SB 2692
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1 repairs at that motor vehicle repair shop or in any other way
2 agrees to influence its policyholders or other beneficiaries
3 under the insurer's policies to obtain repairs at that motor
4 vehicle repair shop.
5 (12) "Insurer" means any person authorized under the
6 Florida Insurance Code to transact insurance in this state.
7 (13) "Support services" means basic services, provided
8 nonspecifically, which are provided internally and to each
9 affiliate or subsidiary by an insurer, its parent company, or
10 a separate affiliate created to provide basic corporate
11 support. The term does not include a service related to the
12 operation of a motor vehicle repair shop if that service would
13 have no value or minimal value to any other type of business.
14 (14) "Tied motor vehicle repair shop" means a motor
15 vehicle repair shop in which an insurer owns an interest.
16 Section 3. Paragraph (b) of subsection (4), paragraph
17 (a) of subsection (5), and subsection (7) of section 559.921,
18 Florida Statutes, are amended to read:
19 559.921 Remedies.--
20 (4)
21 (b) Upon a finding as set forth in paragraph (a), the
22 department may enter an order doing one or more of the
23 following:
24 1. Issuing a notice of noncompliance pursuant to s.
25 120.695.
26 2. Imposing an administrative fine not to exceed
27 $1,000 per violation for each act which constitutes a
28 violation of ss. 559.901-559.9221 this part or a rule or
29 order.
30 3. Imposing an administrative fine of not less than
31 $1,000 or more than $5,000 for each act that constitutes a
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1 violation of ss. 559.9222-559.9229. Each day during which a
2 violation of ss. 559.9222-559.9229 occurs is a separate
3 violation. The amount of the administrative fine shall be
4 based on the seriousness of the violation and must reflect the
5 following factors:
6 a. The nature, circumstances, extent, and gravity of
7 the act or omission that constitutes the violation;
8 b. The economic harm caused by the violation;
9 c. The history of previous violations;
10 d. The need to deter future violations by the person
11 charged with the violation;
12 e. Efforts, if any, made to correct the violation; and
13 f. Any other factors the court considers appropriate
14 to implement the remedial intent of this chapter.
15 4.3. Directing that the motor vehicle repair shop
16 cease and desist specified activities.
17 5.4. Refusing to register or revoking or suspending a
18 registration.
19 6.5. Placing the registrant on probation for a period
20 of time, subject to such conditions as the department may
21 specify.
22 (5)(a) The department or the state attorney, if a
23 violation of this part occurs in his or her judicial circuit,
24 shall be the enforcing authority for purposes of this part and
25 may bring a civil action in circuit court for temporary or
26 permanent injunctive relief and may seek other appropriate
27 civil relief, including a civil penalty not to exceed $1,000
28 for each violation of ss. 559.901-559.9221 and a civil penalty
29 of not less than $1,000 or more than $5,000 for a violation of
30 ss. 559.9222-559.9229, restitution and damages for injured
31 customers, court costs, and reasonable attorney's fees.
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1 (7) If, in any proceeding brought pursuant to ss.
2 559.901-559.9221 this part, it is determined that the repairs
3 and costs thereof were in fact authorized, orally or in
4 writing, the repairs were completed in a proper manner, and
5 the consumer benefited therefrom, then the enforcing authority
6 may consider such factors in assessing penalties or damages
7 and may award the reasonable value of such repairs.
8 Section 4. Section 559.9222, Florida Statutes, is
9 created to read:
10 559.9222 Insurer interest; exclusively.--
11 (1) Except as provided by this section, an insurer may
12 not own or acquire an interest in a motor vehicle repair shop.
13 (2) An insurer that owns an interest in a tied motor
14 vehicle repair shop that was open for business, or on which
15 construction had commenced, on January 1, 2004, may maintain
16 that ownership interest and may operate that facility.
17 (3) An insurer may relocate a tied motor vehicle
18 repair shop described by subsection (2) but may not obtain an
19 ownership interest in any additional facility not described by
20 subsection (2).
21 (4) Subsections (2) and (3) are applicable to an
22 insurer only if the insurer and its tied motor vehicle repair
23 shop are otherwise in compliance with ss. 559.9222-559.9229.
24 (5) Unless otherwise specifically provided by this
25 part, this part provides the exclusive authority and rules
26 applicable to the regulation of the relations between an
27 insurer and a tied motor vehicle repair shop.
28 Section 5. Section 559.9223, Florida Statutes, is
29 created to read:
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1 559.9223 Favored facility agreement presumed.--An
2 insurer is presumed to have a favored facility agreement with
3 a motor vehicle shop in which it owns an interest.
4 Section 6. Section 559.9224, Florida Statutes, is
5 created to read:
6 559.9224 Contractual conditions.--
7 (1) An insurer that owns an interest in a motor
8 vehicle repair shop may use only one favored facility
9 agreement.
10 (2) Except as otherwise provided by this subsection,
11 the terms under which the insurer enters into a favored
12 facility agreement must be identical for all motor vehicle
13 repair shops, including a tied motor vehicle repair shop. An
14 insurer may vary the terms as necessary to implement technical
15 differences required by geographical factors or other
16 legitimate business factors.
17 (3) Except as provided by subsection (4), an insurer
18 may not cancel a favored facility agreement until the
19 expiration of the 30th day after the date on which the insurer
20 provides notice to the motor vehicle repair shop of the
21 insurer's intent to cancel the agreement. The insure shall
22 include with the notice a statement explaining the reason for
23 the cancellation of the agreement.
24 (4) An insurer may summarily cancel a favored facility
25 agreement with a motor vehicle repair shop if the insurer, a
26 policyholder of the insurer, or another beneficiary under the
27 insurer's policy establishes reasonable grounds to believe
28 that the motor vehicle repair shop is fraudulent in its
29 dealings with the insurer or the policyholder or other
30 beneficiaries under the insurer's policy.
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1 Section 7. Section 559.9225, Florida Statutes, is
2 created to read:
3 559.9225 Notice.--
4 (1) An insurer that owns an interest in a motor
5 vehicle repair shop shall post the following notice in each of
6 its tied motor vehicle repair shops:
7 "THIS MOTOR VEHICLE REPAIR SHOP IS OWNED IN
8 WHOLE OR IN PART BY (insert name of insurer
9 here). YOU ARE HEREBY NOTIFIED THAT YOU ARE
10 ENTITLED TO SEEK REPAIRS AT ANY MOTOR VEHICLE
11 REPAIR SHOP OF YOUR CHOICE."
12 (2) The notice required by subsection (1) must be
13 posted prominently in a location in which it is likely to be
14 seen and read by a customer of the motor vehicle repair shop.
15 Section 8. Section 559.9226, Florida Statutes, is
16 created to read:
17 559.9226 Prohibited acts.--An insurer may not:
18 (1) Condition the provision of a product, service,
19 insurance policy renewal, pricing, or other benefit on the
20 purchase of any good or service from its tied motor vehicle
21 repair shops.
22 (2) Share information with its tied motor vehicle
23 repair shops which is not made available on identical terms
24 and conditions to other motor vehicle repair shops with which
25 the insurer has entered into a favored facility agreement.
26 (3) Engage in a joint marketing program with its tied
27 motor vehicle repair shops.
28 (4) Provide its tied motor vehicle repair shops a
29 recommendation, referral, description, advantage, or access to
30 its policyholders or other beneficiaries under its insurance
31 policies which is not provided on identical terms to other
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1 motor vehicle repair shops with which the insurer has entered
2 into a favored facility agreement.
3 (5) Provide a tied motor vehicle repair shop access to
4 the insurer's products or services on terms and conditions
5 different from those under which the insurer provides access
6 to the same products or services to another motor vehicle
7 repair shop with which the insurer has entered into a favored
8 facility agreement.
9 (6) Allow a tied motor vehicle repair shop to use the
10 insurer's name, trademark, tradename, brand, or logo in a
11 manner different than that allowed for any other motor vehicle
12 repair shop with which the insurer has entered into a favored
13 facility agreement.
14 (7) Subsidize the business activities or operating
15 expenses of a tied motor vehicle repair shop.
16 (8) Directly or indirectly require a policyholder of
17 the insurer or other beneficiary under the insurer's policy to
18 obtain a damage estimate on a vehicle covered by the insurance
19 policy at a tied motor vehicle repair shop.
20 (9) Authorize or allow a person representing the
21 insurer, whether an employee or an independent contractor, to
22 recommend to a policyholder or other beneficiary under the
23 insurance policy that the policyholder or other beneficiary
24 obtain motor vehicle repair at a tied motor vehicle repair
25 shop, except to the same extent that the person recommends
26 other motor vehicle repair shops with which the insurer has
27 entered into a favored facility agreement.
28 (10) Require a policyholder or beneficiary to use a
29 claims center located on the premises of a tied motor vehicle
30 repair shop.
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1 (11) Enter into a favored facility agreement
2 exclusively with its tied motor vehicle repair shops.
3 (12) Retaliate or discriminate against a person who:
4 (a) Files an action as provided by this part; or
5 (b) Assists or participates in any manner in an
6 investigation, judicial proceeding, or other action brought or
7 maintained as provided by this part.
8 (13) Include earnings or losses of a tied motor
9 vehicle repair shop in a rate filing made under chapter 627.
10 Section 9. Section 559.9227, Florida Statutes, is
11 created to read:
12 559.9227 Conflict of interest prohibited.--Except as
13 otherwise provided by this part, an agreement between an
14 insurer and its tied motor vehicle repair shop must be
15 negotiated and executed as an arm's length transaction.
16 Section 10. Section 559.9228, Florida Statutes, is
17 created to read:
18 559.9228 Support services.--
19 (1) Notwithstanding this part, and except as provided
20 by subsection (2), an insurer may provide support services to
21 its tied motor vehicle repair shops if those services:
22 (a) Are priced at a level that is fair and reasonable
23 to both the insurer and the tied motor vehicle repair shop;
24 and
25 (b) Do not directly or indirectly confer a competitive
26 advantage to the tied motor vehicle repair shop.
27 (2) Notwithstanding subsection (1), an agreement by an
28 insurer to provide support services to its tied motor vehicle
29 repair shop may not create the potential for confusion among
30 the policyholders of the insurer, other beneficiaries of an
31 insurance policy issued by the insurer, or other parties.
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1 Section 11. Section 559.9229, Florida Statutes, is
2 created to read:
3 559.9229 Antitrust enforcement.--Sections
4 559.9222-559.9229 do not confer immunity from an antitrust law
5 of this state or the United States. A sanction or penalty
6 imposed in an action brought under this part is in addition to
7 other relief granted on the basis of the violation of an
8 antitrust law of this state or the United States.
9 Section 12. This act shall take effect July 1, 2004.
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12 SENATE SUMMARY
13 Provides conditions on the existence and nature of
relationships between insurers and motor vehicle repair
14 shops in which they own an interest. Prohibits such
interests except under limited conditions. Provides
15 penalties for violations and prohibits certain actions
with respect thereto.
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