HB 0825

CS

CHAMBER ACTION

1	The State Resources Council recommends the following:
2
3	Council/Committee Substitute
4	Remove the entire bill and insert:
5	A bill to be entitled
6	An act relating to motor vehicle service agreements;
7	amending s. 634.011, F.S.; including provision of payments
8	for paintless dent removal services within application of
9	the term "motor vehicle service agreement"; providing
10	definitions; amending s. 634.041, F.S.; revising
11	requirements governing qualifications for a license to
12	issue such agreements; authorizing certain service
13	agreement companies to use a 50-percent reserve and
14	contractual liability coverage for certain agreements;
15	providing a definition; amending s. 634.136, F.S.;
16	requiring a motor vehicle service contract company to
17	maintain additional information in a detailed service
18	agreement register relating to motor vehicle service
19	agreements; providing an effective date.
20
21	Be It Enacted by the Legislature of the State of Florida:
22
23	Section 1.  Subsection (7) of section 634.011, Florida
24	Statutes, is amended to read:
25	634.011  Definitions.--As used in this part, the term:
26	(7)  "Motor vehicle service agreement" or "service
27	agreement" means any contract or agreement indemnifying the
28	service agreement holder for the motor vehicle listed on the
29	service agreement and arising out of the ownership, operation,
30	and use of the motor vehicle against loss caused by failure of
31	any mechanical or other component part, or any mechanical or
32	other component part that does not function as it was originally
33	intended; however, nothing in this part shall prohibit or affect
34	the giving, free of charge, of the usual performance guarantees
35	by manufacturers or dealers in connection with the sale of motor
36	vehicles. Transactions exempt under s. 624.125 are expressly
37	excluded from this definition and are exempt from the provisions
38	of this part. The term "motor vehicle service agreement"
39	includes any contract or agreement that provides for any of the
40	following:
41	(a)  For the coverage or protection defined in this
42	subsection and which is issued or provided in conjunction with
43	an additive product applied to the motor vehicle that is the
44	subject of such contract or agreement.; or
45	(b)  For payment of vehicle protection expenses.
46	1.a.  "Vehicle protection expenses" means a preestablished
47	flat amount payable for the loss of or damage to a vehicle or
48	expenses incurred by the service agreement holder for loss or
49	damage to a covered vehicle, including, but not limited to,
50	applicable deductibles under a motor vehicle insurance policy;
51	temporary vehicle rental expenses; expenses for a replacement
52	vehicle that is at least the same year, make, and model of the
53	stolen motor vehicle; sales taxes or registration fees for a
54	replacement vehicle that is at least the same year, make, and
55	model of the stolen vehicle; or other incidental expenses
56	specified in the agreement.
57	b.  "Vehicle protection product" means a product or system
58	installed or applied to a motor vehicle or designed to prevent
59	the theft of the motor vehicle or assist in the recovery of the
60	stolen motor vehicle.
61	2.  Vehicle protection expenses shall be payable in the
62	event of loss or damage to the vehicle as a result of the
63	failure of the vehicle protection product to prevent the theft
64	of the motor vehicle or to assist in the recovery of the stolen
65	motor vehicle. Vehicle protection expenses covered under the
66	agreement shall be clearly stated in the service agreement form,
67	unless the agreement provides for the payment of a
68	preestablished flat amount, in which case the service agreement
69	form shall clearly identify such amount.
70	3.  Motor vehicle service agreements providing for the
71	payment of vehicle protection expenses shall either:
72	a.  Reimburse a service agreement holder for the following
73	expenses, at a minimum: deductibles applicable to comprehensive
74	coverage under the service agreement holder's motor vehicle
75	insurance policy; temporary vehicle rental expenses; sales taxes
76	and registration fees on a replacement vehicle that is at least
77	the same year, make, and model of the stolen motor vehicle; and
78	the difference between the benefits paid to the service
79	agreement holder for the stolen vehicle under the service
80	agreement holder's comprehensive coverage and the actual cost of
81	a replacement vehicle that is at least the same year, make, and
82	model of the stolen motor vehicle; or
83	b.  Pay a preestablished flat amount to the service
84	agreement holder.
85
86	Payments shall not duplicate any benefits or expenses paid to
87	the service agreement holder by the insurer providing
88	comprehensive coverage under a motor vehicle insurance policy
89	covering the stolen motor vehicle; however, the payment of
90	vehicle protection expenses at a preestablished flat amount of
91	$5,000 or less does not duplicate any benefits or expenses
92	payable under any comprehensive motor vehicle insurance policy.
93	(c)  For payment of paintless dent removal services by a
94	paintless dent removal provider. For purposes of this paragraph:
95	1.  "Paintless dent removal services" means the process of
96	removing dents, dings, creases, and hail damage from vehicles
97	without affecting the original paint finish. Paintless dent
98	removal does not include services that involve vehicle panel
99	replacement, sanding, bonding, or painting.
100	2.  "Paintless dent removal provider" means a company whose
101	primary business consists of providing paintless dent removal
102	services.
103	Section 2.  Subsection (9) of section 634.041, Florida
104	Statutes, is amended to read:
105	634.041  Qualifications for license.--To qualify for and
106	hold a license to issue service agreements in this state, a
107	service agreement company must be in compliance with this part,
108	with applicable rules of the commission, with related sections
109	of the Florida Insurance Code, and with its charter powers and
110	must comply with the following:
111	(9)(a)  In meeting the requirements of this part, except as
112	provided in paragraph (b), a service agreement company may not
113	utilize both the 50-percent reserve and contractual liability
114	insurance simultaneously. However, a company may have
115	contractual liability coverage on service agreements previously
116	sold and sell new service agreements covered by the 50-percent
117	reserve, and the converse of this is also allowed. A service
118	agreement company must be able to distinguish how each
119	individual service agreement is covered.
120	(b)  A service agreement company that maintains net assets
121	of at least $7.5 million may use the 50-percent reserve and
122	contractual liability coverage for specific blocks of new
123	service agreements. For purposes of this paragraph, the term
124	"specific blocks of new service agreements" means the service
125	agreements sold by a single designated licensed salesperson. A
126	service agreement must distinguish how each individual service
127	agreement is covered.
128	Section 3.  Subsection (4) of section 634.136, Florida
129	Statutes, is amended to read:
130	634.136  Office records required.--Each licensed motor
131	vehicle service contract company, as a minimum requirement for
132	permanent office records, shall maintain:
133	(4)  A detailed service agreement register, in numerical
134	order by service agreement number, of agreements in force, which
135	register shall include the following information: service
136	agreement number, date of issue, issuing dealer, name of
137	agreement holder, description of motor vehicle, service
138	agreement period and mileage, gross premium, commission to
139	salespersons, commission to dealer, and net premium and whether
140	the agreement is covered by contractual liability insurance or
141	the unearned premium reserve account.
142	Section 4.  This act shall take effect July 1, 2005.

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