CS/HB 1205

1	A bill to be entitled
2	An act relating to motor vehicle warranty associations;
3	amending s. 628.4615, F.S.; conforming a cross-reference;
4	amending s. 634.011, F.S.; defining the term "motor
5	vehicle manufacturer"; amending s. 634.041, F.S.;
6	exempting certain motor vehicle manufacturers from certain
7	licensing requirements; amending s. 634.137, F.S.;
8	requiring the Office of Insurance Regulation to develop an
9	abbreviated form for statistical reporting of sales of
10	service agreements by motor vehicle manufacturers in lieu
11	of certain other financial reports; amending s. 634.271,
12	F.S.; conforming a cross-reference; amending s. 634.4165,
13	F.S.; revising criteria for a required detailed warranty
14	register of warranties in force; revising certain warranty
15	holder information requirements; amending s. 634.436,
16	F.S.; specifying an additional unfair claim settlement
17	practice; providing an effective date.
18
19	Be It Enacted by the Legislature of the State of Florida:
20
21	Section 1.  Paragraph (a) of subsection (1) of section
22	628.4615, Florida Statutes, is amended to read:
23	628.4615  Specialty insurers; acquisition of controlling
24	stock, ownership interest, assets, or control; merger or
25	consolidation.--
26	(1)  For the purposes of this section, the term "specialty
27	insurer" means any person holding a license or certificate of
28	authority as:
29	(a)  A motor vehicle service agreement company authorized
30	to issue motor vehicle service agreements as those terms are
31	defined in s. 634.011(7) and (8);
32	Section 2.  Subsections (7) through (16) of section
33	634.011, Florida Statutes, are renumbered as subsections (8)
34	through (17), respectively, and a new subsection (7) is added to
35	that section to read:
36	634.011  Definitions.--As used in this part, the term:
37	(7)  "Motor vehicle manufacturer" means an entity that:
38	(a)  Manufactures or produces motor vehicles and sells
39	motor vehicles under its own name or label;
40	(b)  Is a subsidiary of an entity that manufactures or
41	produces motor vehicles; or
42	(c)  Is a corporation that owns 100 percent of an entity
43	that manufactures or produces motor vehicles.
44	Section 3.  Subsection (12) is added to section 634.041,
45	Florida Statutes, to read:
46	634.041  Qualifications for license.--To qualify for and
47	hold a license to issue service agreements in this state, a
48	service agreement company must be in compliance with this part,
49	with applicable rules of the commission, with related sections
50	of the Florida Insurance Code, and with its charter powers and
51	must comply with the following:
52	(12)  A motor vehicle manufacturer complying with the
53	provisions of this section must be an entity formed under the
54	laws of this state or of another state or district of the United
55	States and is required to comply only with subsections (2) and
56	(10). A motor vehicle manufacturer is not required to submit
57	fingerprints, background information, or biographical statements
58	for any individual except those serving as officers or directors
59	of an applicant entity. A motor vehicle manufacturer is not
60	required to comply with s. 634.081(5). Motor vehicle
61	manufacturers shall be subject to all other applicable
62	provisions of this part.
63	Section 4.  Subsection (6) is added to section 634.137,
64	Florida Statutes, to read:
65	634.137  Financial and statistical reporting
66	requirements.--
67	(6)  The office shall develop by rule an abbreviated form
68	for statistical reporting of sales of service agreements in this
69	state by motor vehicle manufacturers to submit in lieu of the
70	financial reports required in subsections (1) and (2).
71	Section 5.  Subsection (5) of section 634.271, Florida
72	Statutes, is amended to read:
73	634.271  Civil remedy.--
74	(5)  The penalty provisions in ss. 520.12 and 521.006, as
75	well as the statutory penalty in subsection (1), do not apply to
76	any violation of this part or chapters 520 and 521 relating to
77	or in connection with the sale or failure to disclose in a
78	retail installment contract or lease, prior to April 23, 2002,
79	of a vehicle protection product, or contract or agreement that
80	provides for payment of vehicle protection expenses, as defined
81	in s. 634.011(8)(7)(b)1., so long as the sale of such product,
82	contract, or agreement was otherwise disclosed to the consumer
83	in writing at the time of the purchase or lease. However, in the
84	event of a violation for which such statutory penalties do not
85	apply, the court shall award actual damages and costs, including
86	reasonable attorney's fees. Nothing in this subsection shall be
87	construed to require the application of the referenced statutory
88	penalty provisions where this subsection is not applicable.
89	Section 6.  Subsection (2) of section 634.4165, Florida
90	Statutes, is amended to read:
91	634.4165  Office records required.--As a minimum
92	requirement for permanent office records, each licensed service
93	warranty association shall maintain:
94	(2)  A detailed warranty register of warranties in force,
95	by unique identifier. The register shall include the unique
96	identifier, date of issue, issuing sales representative, name of
97	warranty holder and the, location of the property to the extent
98	the name and address have been furnished by the warranty holder,
99	warranty period, gross premium, commission to sales
100	representative, and net premium. An association that does not
101	collect the name and address of the warranty holder at the time
102	of sale must provide another method for warranty holders to
103	provide such information, including, but not limited to,
104	Internet registration, return postcard, or other means
105	acceptable to the office.
106	Section 7.  Subsection (5) of section 634.436, Florida
107	Statutes is amended to read:
108	634.436  Unfair methods of competition and unfair or
109	deceptive acts or practices defined.-- The following methods,
110	acts, or practices are defined as unfair methods of competition
111	and unfair or deceptive acts or practices:
112	(5)  UNFAIR CLAIM SETTLEMENT PRACTICES.--
113	(a)  Attempting to settle claims on the basis of an
114	application or any other material document which was altered
115	without notice to, or knowledge or consent of, the warranty
116	holder;
117	(b)  Making a material misrepresentation to the warranty
118	holder for the purpose and with the intent of effecting
119	settlement of such claims, loss, or damage under such contract
120	on less favorable terms than those provided in, and contemplated
121	by, such contract; or
122	(c)  Committing or performing with such frequency as to
123	indicate a general business practice any of the following
124	practices:
125	1.  Failure properly to investigate claims;
126	2.  Misrepresentation of pertinent facts or contract
127	provisions relating to coverages at issue;
128	3.  Failure to acknowledge and act promptly upon
129	communications with respect to claims;
130	4.  Denial of claims without conducting reasonable
131	investigations based upon available information;
132	5.  Failure to affirm or deny coverage of claims upon
133	written request of the warranty holder within a reasonable time
134	after proof-of-loss statements have been completed; or
135	6.  Failure to promptly provide a reasonable explanation to
136	the warranty holder of the basis in the contract in relation to
137	the facts or applicable law for denial of a claim or for the
138	offer of a compromise settlement; or
139	(d)  Denying a claim solely on the basis that the
140	association was not able to confirm that the warranty holder in
141	fact purchased a service warranty because the association did
142	not obtain the name and address of the warranty holder as set
143	forth in s. 634.4165(2).
144	Section 8.  This act shall take effect upon becoming a law.

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