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A bill to be entitled

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An act relating to motor vehicle warranty associations;

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amending s. 628.4615, F.S., relating to specialty

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insurers; conforming a cross-reference to changes made by

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the act; amending s. 634.011, F.S.; defining the term

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"motor vehicle manufacturer" for purposes of part I of ch.

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634, F.S.; amending s. 634.041, F.S.; exempting motor

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vehicle manufacturers applying for licensure as service

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agreement companies from certain licensing requirements

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and limitations on claims liabilities; amending s.

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634.137, F.S.; authorizing the Office of Insurance

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Regulation to develop an abbreviated form for statistical

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reporting of sales of service agreements by motor vehicle

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manufacturers in lieu of certain other financial reports;

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amending s. 634.271, F.S.; conforming a cross-reference;

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amending s. 634.4165, F.S.; requiring warranty service

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associations that do not collect the names and addresses

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of warranty holders at the time of sale to provide an

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alternative method for warranty holders to provide such

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information; amending s. 634.436, F.S.; prohibiting

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warranty service associations that do not collect the

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names and addresses of warranty holders from denying a

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warranty holder's claim on the basis that the association

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cannot confirm that the warranty holder in fact purchased

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the warranty; providing an effective date.

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

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     Section 1.  Subsection (1) of section 628.4615, Florida

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Statutes, is amended to read:

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     628.4615  Specialty insurers; acquisition of controlling

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stock, ownership interest, assets, or control; merger or

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consolidation.--

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     (1)  For the purposes of this section, the term "specialty

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insurer" means any person holding a license or certificate of

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authority as:

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     (a)  A motor vehicle service agreement company authorized to

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issue motor vehicle service agreements as those terms are defined

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in s. 634.011 s. 634.011(7) and (8);

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     (b)  A home warranty association authorized to issue "home

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warranties" as those terms are defined in s. 634.301(3) and (4);

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     (c)  A service warranty association authorized to issue

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"service warranties" as those terms are defined in s. 634.401(13)

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and (14);

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     (d)  A prepaid limited health service organization

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authorized to issue prepaid limited health service contracts, as

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those terms are defined in chapter 636;

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     (e)  An authorized health maintenance organization operating

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pursuant to s. 641.21;

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     (f)  An authorized prepaid health clinic operating pursuant

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to s. 641.405;

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     (g)  A legal expense insurance corporation authorized to

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engage in a legal expense insurance business pursuant to s.

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642.021;

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     (h)  A provider which is licensed to operate a facility

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which undertakes to provide continuing care as those terms are

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defined in s. 651.011(2), (4), (5), and (6);

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     (i)  A multiple-employer welfare arrangement operating

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pursuant to ss. 624.436-624.446;

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     (j)  A premium finance company authorized to finance

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insurance premiums pursuant to s. 627.828; or

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     (k)  A corporation authorized to accept donor annuity

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agreements pursuant to s. 627.481.

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     Section 2.  Present subsections (7) through (16) of section

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634.011, Florida Statutes, are renumbered as subsections (8)

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through (17), respectively, and a new subsection (7) is added to

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that section, to read:

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

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     (7) "Motor vehicle manufacturer" means an entity that:

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     (a) Manufactures or produces motor vehicles and sells motor

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vehicles under its own name or label;

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     (b) Is a subsidiary of an entity that manufactures or

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produces motor vehicles; or

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     (c) Is a corporation that owns 100 percent of an entity

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that manufactures or produces motor vehicles.

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     Section 3.  Subsection (12) is added to section 634.041,

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Florida Statutes, to read:

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     634.041  Qualifications for license.--To qualify for and

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

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service agreement company must be in compliance with this part,

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with applicable rules of the commission, with related sections of

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the Florida Insurance Code, and with its charter powers and must

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comply with the following:

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     (12) A motor vehicle manufacturer complying with the

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provisions of this part must be an entity formed under the laws

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of this state or of another state or district of the United

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States and need comply only with subsections (2) and (10). A

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motor vehicle manufacturer need not submit fingerprints,

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background information, or biographical statements for any

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individual except those serving as officers or directors of the

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applicant entity. A motor vehicle manufacturer need not comply

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with s. 634.081(5). Motor vehicle manufacturers are subject to

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all other applicable provisions of this part.

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     Section 4.  Subsection (6) is added to section 634.137,

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Florida Statutes, to read:

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     634.137  Financial and statistical reporting requirements.--

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     (6) The office shall develop by rule an abbreviated form

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for motor vehicle manufacturers to use in submitting statistical

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reporting of sales of service agreements in this state in lieu of

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the financial reports required in subsections (1) and (2).

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     Section 5.  Subsection (5) of section 634.271, Florida

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Statutes, is amended to read:

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     634.271  Civil remedy.--

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

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

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any violation of this part or chapters 520 and 521 relating to or

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in connection with the sale or failure to disclose in a retail

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installment contract or lease, prior to April 23, 2002, of a

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vehicle protection product, or contract or agreement that

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provides for payment of vehicle protection expenses, as defined

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in s. 634.011(8)(b)1. s. 634.011(7)(b)1., so long as the sale of

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such product, contract, or agreement was otherwise disclosed to

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the consumer in writing at the time of the purchase or lease.

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However, in the event of a violation for which such statutory

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penalties do not apply, the court shall award actual damages and

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costs, including reasonable attorney's fees. Nothing in this

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subsection shall be construed to require the application of the

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referenced statutory penalty provisions where this subsection is

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not applicable.

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     Section 6.  Subsection (2) of section 634.4165, Florida

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Statutes, is amended to read:

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     634.4165  Office records required.--As a minimum requirement

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for permanent office records, each licensed service warranty

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association shall maintain:

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     (2)  A detailed warranty register of warranties in force, by

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unique identifier. The register shall include the unique

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identifier, date of issue, issuing sales representative, name of

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warranty holder and the, location of the property to the extent

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the name and address have been furnished by the warranty holder,

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warranty period, gross premium, commission to sales

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representative, and net premium. Associations not collecting the

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name and address of the warranty holder at the time of sale must

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provide another method for warranty holders to provide such

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information, such as Internet registration, return postcard, or

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other means acceptable to the office.

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     Section 7.  Subsection (5) of section 634.436, Florida

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Statutes, is amended to read:

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     634.436  Unfair methods of competition and unfair or

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deceptive acts or practices defined.--The following methods,

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acts, or practices are defined as unfair methods of competition

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and unfair or deceptive acts or practices:

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     (5)  UNFAIR CLAIM SETTLEMENT PRACTICES.--

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     (a)  Attempting to settle claims on the basis of an

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application or any other material document which was altered

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without notice to, or knowledge or consent of, the warranty

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holder;

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     (b)  Making a material misrepresentation to the warranty

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holder for the purpose and with the intent of effecting

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settlement of such claims, loss, or damage under such contract on

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less favorable terms than those provided in, and contemplated by,

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such contract; or

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     (c)  Committing or performing with such frequency as to

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indicate a general business practice any of the following

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practices:

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     1.  Failure properly to investigate claims;

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     2.  Misrepresentation of pertinent facts or contract

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provisions relating to coverages at issue;

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     3.  Failure to acknowledge and act promptly upon

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communications with respect to claims;

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     4.  Denial of claims without conducting reasonable

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investigations based upon available information;

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     5.  Failure to affirm or deny coverage of claims upon

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written request of the warranty holder within a reasonable time

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after proof-of-loss statements have been completed; or

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     6.  Failure to promptly provide a reasonable explanation to

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the warranty holder of the basis in the contract in relation to

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the facts or applicable law for denial of a claim or for the

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offer of a compromise settlement: or.

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     (d) Denying a claim solely on the basis that the

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association was not able to confirm that the warranty holder in

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fact purchased a service warranty because the association did not

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obtain the name and address as set forth in s. 634.4165(2).

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     Section 8.  This act shall take effect upon becoming a law.