Senate Bill sb2498c1

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    Florida Senate - 2005                           CS for SB 2498

    By the Committee on Banking and Insurance; and Senator
    Campbell




    597-2098-05

  1                      A bill to be entitled

  2         An act relating to warranty associations;

  3         amending s. 634.271, F.S.; providing an

  4         exemption from penalty provisions for certain

  5         service warranties; providing actual damages

  6         and costs for violations for which such

  7         statutory penalties do not apply; providing

  8         retroactive applicability; amending s. 634.401,

  9         F.S.; redefining the term "service warranty";

10         providing an effective date.

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

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14         Section 1.  Subsection (5) is added to section 634.271,

15  Florida Statutes, to read:

16         634.271  Civil remedy.--

17         (5)  The penalty provisions in ss. 520.12 and 521.006,

18  as well as the statutory penalty in subsection (1), do not

19  apply to any violation of this part or chapters 520 and 521

20  relating to or in connection with the sale or failure to

21  disclose in a retail installment contract or lease, prior to

22  April 23, 2002, of a vehicle protection product, or contract

23  or agreement that provides for payment of vehicle protection

24  expenses, as defined in s. 634.011(7)(b)1., so long as the

25  sale of such product, contract, or agreement was otherwise

26  disclosed to the consumer in writing at the time of the

27  purchase or lease. However, in the event of a violation for

28  which such statutory penalties do not apply, the court shall

29  award actual damages and costs, including a reasonable

30  attorney's fee. Nothing in this subsection shall be construed

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    Florida Senate - 2005                           CS for SB 2498
    597-2098-05




 1  to require the application of the referenced statutory penalty

 2  provisions where this subsection is not applicable.

 3         Section 2.  Subsection (13) of section 634.401, Florida

 4  Statutes, is amended to read:

 5         634.401  Definitions.--As used in this part, the term:

 6         (13)  "Service warranty" means any warranty, guaranty,

 7  extended warranty or extended guaranty, maintenance service

 8  contract equal to or greater than 1 year in length or which

 9  does not meet the exemption in paragraph (a), contract,

10  agreement, or other written promise for a specific duration to

11  perform the repair, replacement, or maintenance of a consumer

12  product, or for indemnification for repair, replacement, or

13  maintenance, for the operational or structural failure due to

14  a defect in materials or workmanship, normal wear and tear,

15  power surge, or accidental damage from handling to indemnify

16  against the cost of repair or replacement of a consumer

17  product in return for the payment of a segregated charge by

18  the consumer; however:

19         (a)  Maintenance service contracts written for less

20  than 1 year or less which do not contain provisions for

21  indemnification and which do not provide a discount to the

22  consumer for any combination of parts and labor in excess of

23  20 percent during the effective period of such contract, motor

24  vehicle service agreements, transactions exempt under s.

25  624.125, and home warranties subject to regulation under parts

26  I and II of this chapter are excluded from this definition;

27  and

28         (b)  The term "service warranty" does not include

29  service contracts between consumers and condominium

30  associations; and.

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    Florida Senate - 2005                           CS for SB 2498
    597-2098-05




 1         (c)  All contracts that include coverage for accidental

 2  damage from handling must be covered by the contractual

 3  liability policy referred to in s. 634.406(3).

 4         Section 3.  This act shall take effect upon becoming a

 5  law and shall apply retroactively to January 1, 1998.

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 7          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
 8                         Senate Bill 2498

 9                                 

10  The committee substitute expands the definition of a "service
    warranty" that may be sold by a licensed service warranty
11  association to include normal wear and tear, power surge
    damage, and accidental damage from handling. The bill also
12  revises the definition to cover warranties of 1 year or
    longer. Any warranty contract that includes coverage for
13  accidental damage from handling must be covered by a
    contractual liability policy purchased by the warranty
14  association covering 100 percent of its total claim exposure.

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