Senate Bill sb1426

    Florida Senate - 2005                                  SB 1426

    By Senator Wise





    5-1175-05                                            See HB 97

  1                      A bill to be entitled

  2         An act relating to motor vehicle service

  3         agreement companies; amending s. 634.041, F.S.;

  4         providing an exception to a prohibition against

  5         service agreement companies using certain

  6         reserves and contractual liability insurance

  7         simultaneously; authorizing service agreement

  8         companies maintaining certain net assets to use

  9         certain reserves and certain contractual

10         liability coverage insurance simultaneously;

11         providing a requirement; providing an effective

12         date.

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14  Be It Enacted by the Legislature of the State of Florida:

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16         Section 1.  Subsection (9) of section 634.041, Florida

17  Statutes, is amended to read:

18         634.041  Qualifications for license.--To qualify for

19  and hold a license to issue service agreements in this state,

20  a service agreement company must be in compliance with this

21  part, with applicable rules of the commission, with related

22  sections of the Florida Insurance Code, and with its charter

23  powers and must comply with the following:

24         (9)(a)  In meeting the requirements of this part,

25  except as provided in paragraph (b), a service agreement

26  company may not utilize both the 50-percent reserve and

27  contractual liability insurance simultaneously. However, a

28  company may have contractual liability coverage on service

29  agreements previously sold and sell new service agreements

30  covered by the 50-percent reserve, and the converse of this is

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






    Florida Senate - 2005                                  SB 1426
    5-1175-05                                            See HB 97




 1  also allowed. A service agreement company must be able to

 2  distinguish how each individual service agreement is covered.

 3         (b)  A service agreement company that maintains net

 4  assets of at least $5 million may use simultaneously the

 5  50-percent reserve and the contractual liability coverage for

 6  specific blocks of new service agreements produced by specific

 7  salespersons. A service agreement company must be able to

 8  distinguish how each individual service agreement is covered.

 9         Section 2.  This act shall take effect July 1, 2005.

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