1

A bill to be entitled

2

An act relating to motor vehicle warranty associations;

3

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

4

insurers; conforming a cross-reference to changes made by

5

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

6

"motor vehicle manufacturer" and "subsidiary" for purposes

7

of part I of ch. 634, F.S.; amending s. 634.041, F.S.;

8

exempting motor vehicle manufacturers applying for

9

licensure as service agreement companies from certain

10

licensing requirements and limitations on claims

11

liabilities; amending s. 634.137, F.S.; authorizing the

12

Office of Insurance Regulation to develop an abbreviated

13

form for statistical reporting of sales of service

14

agreements by motor vehicle manufacturers in lieu of

15

certain other financial reports; amending s. 634.271,

16

F.S.; conforming a cross-reference; amending s. 634.4165,

17

F.S.; requiring warranty service associations that do not

18

collect the names and addresses of warranty holders at the

19

time of sale to provide an alternative method for warranty

20

holders to provide such information; amending s. 634.436,

21

F.S.; prohibiting warranty service associations that do

22

not collect the names and addresses of warranty holders

23

from denying a warranty holder's claim on the basis that

24

the association cannot confirm that the warranty holder in

25

fact purchased the warranty; providing an effective date.

26

27

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

28

29

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

30

Statutes, is amended to read:

31

     628.4615  Specialty insurers; acquisition of controlling

32

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

33

consolidation.--

34

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

35

insurer" means any person holding a license or certificate of

36

authority as:

37

     (a)  A motor vehicle service agreement company authorized to

38

issue motor vehicle service agreements as those terms are defined

39

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

40

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

41

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

42

     (c)  A service warranty association authorized to issue

43

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

44

and (14);

45

     (d)  A prepaid limited health service organization

46

authorized to issue prepaid limited health service contracts, as

47

those terms are defined in chapter 636;

48

     (e)  An authorized health maintenance organization operating

49

pursuant to s. 641.21;

50

     (f)  An authorized prepaid health clinic operating pursuant

51

to s. 641.405;

52

     (g)  A legal expense insurance corporation authorized to

53

engage in a legal expense insurance business pursuant to s.

54

642.021;

55

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

56

which undertakes to provide continuing care as those terms are

57

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

58

     (i)  A multiple-employer welfare arrangement operating

59

pursuant to ss. 624.436-624.446;

60

     (j)  A premium finance company authorized to finance

61

insurance premiums pursuant to s. 627.828; or

62

     (k)  A corporation authorized to accept donor annuity

63

agreements pursuant to s. 627.481.

64

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

65

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

66

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

67

that section, to read:

68

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

69

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

70

     (a) Manufactures or produces motor vehicles and sells motor

71

vehicles under its own name or label;

72

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

73

produces motor vehicles; or

74

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

75

that manufactures or produces motor vehicles.

76

77

For purposes of this subsection, an entity qualifies as a

78

subsidiary if 25 percent or more of its voting securities are

79

directly or indirectly owned by an entity that manufactures or

80

produces motor vehicles and sells motor vehicles under its own

81

name or label.

82

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

83

Florida Statutes, to read:

84

     634.041  Qualifications for license.--To qualify for and

85

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

86

service agreement company must be in compliance with this part,

87

with applicable rules of the commission, with related sections of

88

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

89

comply with the following:

90

     (12) A motor vehicle manufacturer complying with the

91

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

92

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

93

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

94

motor vehicle manufacturer need not submit fingerprints,

95

background information, or biographical statements for any

96

individual except those serving as officers or directors of the

97

applicant entity. A motor vehicle manufacturer need not comply

98

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

99

all other applicable provisions of this part.

100

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

101

Florida Statutes, to read:

102

     634.137  Financial and statistical reporting requirements.--

103

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

104

for motor vehicle manufacturers to use in submitting statistical

105

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

106

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

107

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

108

Statutes, is amended to read:

109

     634.271  Civil remedy.--

110

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

111

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

112

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

113

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

114

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

115

vehicle protection product, or contract or agreement that

116

provides for payment of vehicle protection expenses, as defined

117

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

118

such product, contract, or agreement was otherwise disclosed to

119

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

120

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

121

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

122

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

123

subsection shall be construed to require the application of the

124

referenced statutory penalty provisions where this subsection is

125

not applicable.

126

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

127

Statutes, is amended to read:

128

     634.4165  Office records required.--As a minimum requirement

129

for permanent office records, each licensed service warranty

130

association shall maintain:

131

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

132

unique identifier. The register shall include the unique

133

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

134

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

135

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

136

warranty period, gross premium, commission to sales

137

representative, and net premium. Associations not collecting the

138

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

139

provide another method for warranty holders to provide such

140

information, such as Internet registration, return postcard, or

141

other means acceptable to the office.

142

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

143

Statutes, is amended to read:

144

     634.436  Unfair methods of competition and unfair or

145

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

146

acts, or practices are defined as unfair methods of competition

147

and unfair or deceptive acts or practices:

148

     (5)  UNFAIR CLAIM SETTLEMENT PRACTICES.--

149

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

150

application or any other material document which was altered

151

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

152

holder;

153

     (b)  Making a material misrepresentation to the warranty

154

holder for the purpose and with the intent of effecting

155

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

156

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

157

such contract; or

158

     (c)  Committing or performing with such frequency as to

159

indicate a general business practice any of the following

160

practices:

161

     1.  Failure properly to investigate claims;

162

     2.  Misrepresentation of pertinent facts or contract

163

provisions relating to coverages at issue;

164

     3.  Failure to acknowledge and act promptly upon

165

communications with respect to claims;

166

     4.  Denial of claims without conducting reasonable

167

investigations based upon available information;

168

     5.  Failure to affirm or deny coverage of claims upon

169

written request of the warranty holder within a reasonable time

170

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

171

     6.  Failure to promptly provide a reasonable explanation to

172

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

173

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

174

offer of a compromise settlement; or.

175

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

176

association was not able to confirm that the warranty holder in

177

fact purchased a service warranty because the association did not

178

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

179

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