HOUSE AMENDMENT Bill No. HB 721 CS
1	CHAMBER ACTION
2	Senate House
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12	Representative Troutman offered the following:
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14	Substitute Amendment for Amendment (550721) (with title
15	amendment)
16	Between lines 75 and 76, insert:
17	Section 4. Paragraph (b) of subsection (8) of section
18	634.011, Florida Statutes, is amended to read:
19	634.011 Definitions.--As used in this part, the term:
20	(8) "Motor vehicle service agreement" or "service
21	agreement" means any contract or agreement indemnifying the
22	service agreement holder for the motor vehicle listed on the
23	service agreement and arising out of the ownership, operation,
24	and use of the motor vehicle against loss caused by failure of
25	any mechanical or other component part, or any mechanical or
26	other component part that does not function as it was originally
27	intended; however, nothing in this part shall prohibit or affect
28	the giving, free of charge, of the usual performance guarantees
29	by manufacturers or dealers in connection with the sale of motor
30	vehicles. Transactions exempt under s. 624.125 are expressly
31	excluded from this definition and are exempt from the provisions
32	of this part. The term "motor vehicle service agreement"
33	includes any contract or agreement that provides:
34	(b) For payment of vehicle protection expenses.
35	1.a. "Vehicle protection expenses" means a preestablished
36	flat amount payable for the loss of or damage to a vehicle or
37	expenses incurred by the service agreement holder for loss or
38	damage to a covered vehicle, including, but not limited to,
39	applicable deductibles under a motor vehicle insurance policy;
40	temporary vehicle rental expenses; expenses for a replacement
41	vehicle that is at least the same year, make, and model of the
42	stolen motor vehicle; sales taxes or registration fees for a
43	replacement vehicle that is at least the same year, make, and
44	model of the stolen vehicle; or other incidental expenses
45	specified in the agreement.
46	b. "Vehicle protection product" means a product or system
47	installed or applied to a motor vehicle or designed to prevent
48	the theft of the motor vehicle or assist in the recovery of the
49	stolen motor vehicle.
50	2. Vehicle protection expenses shall be payable in the
51	event of loss or damage to the vehicle as a result of the
52	failure of the vehicle protection product to prevent the theft
53	of the motor vehicle or to assist in the recovery of the stolen
54	motor vehicle. Vehicle protection expenses covered under the
55	agreement shall be clearly stated in the service agreement form,
56	unless the agreement provides for the payment of a
57	preestablished flat amount, in which case the service agreement
58	form shall clearly identify such amount.
59	3. Motor vehicle service agreements providing for the
60	payment of vehicle protection expenses shall either:
61	a. Reimburse a service agreement holder for the following
62	expenses, at a minimum: deductibles applicable to comprehensive
63	coverage under the service agreement holder's motor vehicle
64	insurance policy; temporary vehicle rental expenses; sales taxes
65	and registration fees on a replacement vehicle that is at least
66	the same year, make, and model of the stolen motor vehicle; and
67	the difference between the benefits paid to the service
68	agreement holder for the stolen vehicle under the service
69	agreement holder's comprehensive coverage and the actual cost of
70	a replacement vehicle that is at least the same year, make, and
71	model of the stolen motor vehicle; or
72	b. Pay a preestablished flat amount to the service
73	agreement holder.
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75	Payments shall not duplicate any benefits or expenses paid to
76	the service agreement holder by the insurer providing
77	comprehensive coverage under a motor vehicle insurance policy
78	covering the stolen motor vehicle. However, the payment of
79	vehicle protection expenses at a preestablished flat amount of
80	up to $5,000 does not duplicate any benefits or expenses payable
81	under any comprehensive motor vehicle insurance policy.
82	Section 5. Subsection (11) of section 634.041, Florida
83	Statutes, is amended 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 department, with related sections
88	of the Florida Insurance Code, and with its charter powers and
89	must comply with the following:
90	(11)(a) A service agreement company offering a service
91	agreementagreementsproviding vehicle protection expenses may
92	meet the requirements for this part only by maintaining a
93	contractual liability insurance policy covering 100 percent of
94	its vehicle protection claim exposurein accordance with
95	paragraph (8)(b), which insurance must be issued by an insurance
96	company not affiliated with the service agreement company,
97	unless the insurance company had issued a contractual liability
98	insurance policy to a service agreement company on or before
99	January 1, 2002. Service agreements providing vehicle protection
100	expenses may be sold only to a service agreement holder that has
101	in-force comprehensive motor vehicle insurance coverage for the
102	vehicle to be covered by the service agreement.
103	(b) Notwithstanding any other requirement of this part, a
104	service agreement company maintaining an unearned premium
105	reserve on all service agreements in accordance with paragraph
106	(8)(a) may offer service agreements providing vehicle protection
107	expenses if it maintains contractual liability insurance only on
108	all service agreements providing vehicle protection expenses and
109	continues to maintain the 50-percent reserve for all service
110	agreements not providing vehicle protection expenses. A service
111	agreement company maintaining contractual liability insurance
112	for all service agreements providing vehicle protection expenses
113	and the 50-percent reserve for all other service agreements
114	shall, in the service agreement register as required pursuant to
115	s. 634.136(4), distinguish between insured service agreements
116	providing vehicle protection expenses and service agreements not
117	providing vehicle protection expenses.
118	Section 6. Paragraph (c) of subsection (1) of section
119	634.121, Florida Statutes, is amended to read:
120	634.121 Filing of forms, required procedures,
121	provisions.--
122	(1) A service agreement form or related form may not be
123	issued or used in this state unless it has been filed with and
124	approved by the department. Upon application for a license, the
125	department shall require the applicant to submit for approval
126	each brochure, pamphlet, circular, form letter, advertisement,
127	or other sales literature or advertising communication addressed
128	or intended for distribution. The department shall disapprove
129	any document which is untrue, deceptive, or misleading or which
130	contains misrepresentations or omissions of material facts.
131	(c) The department shall disapprove any service agreement
132	form providing vehicle protection expenses unless itwhich does
133	not clearly indicates eitherindicatethe method for calculating
134	the benefit to be paid or provided to the service agreement
135	holder or the preestablished flat amount payable pursuant to the
136	terms of the service agreement. All service agreement forms
137	providing vehicle protection expenses shall clearly indicate the
138	term of the service agreement, whether new or used cars are
139	eligible for the vehicle protection product, and that the
140	service agreement holder may not make any claim against the
141	Florida Insurance Guarantee Association for vehicle protection
142	expenses. The service agreement shall be provided to a service
143	agreement holder on a form that provides only vehicle protection
144	expenses. A service agreement form providing vehicle protection
145	expenses must state that the service agreement holder must have
146	in force at the time of loss comprehensive motor vehicle
147	insurance coverage as a condition precedent to requesting
148	payment of vehicle protection expenses.
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150	================= T I T L E A M E N D M E N T =================
151	Remove line(s) 19, and insert:
152	exemptions under certain circumstances; amending s. 634.011,
153	F.S.; revising a definition; amending s. 634.041, F.S.; revising
154	a qualification for licensure as a service agreement company;
155	authorizing a service agreement company to offer service
156	agreements providing vehicle protection expenses under certain
157	circumstances; providing requirements; amending s. 634.121,
158	F.S.; revising a provision authorizing the Department of
159	Financial Services to disapprove certain service agreement forms
160	to include a reference to payment of certain preestablished flat
161	amounts; providing an