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	Amendment (with directory and title amendments)
15	Between lines 75 and 76, insert:
16	Section 4. Paragraph (b) of subsection (8) of section
17	634.011, Florida Statutes, is amended to read:
18	634.011 Definitions.--As used in this part, the term:
19	(8) "Motor vehicle service agreement" or "service
20	agreement" means any contract or agreement indemnifying the
21	service agreement holder for the motor vehicle listed on the
22	service agreement and arising out of the ownership, operation,
23	and use of the motor vehicle against loss caused by failure of
24	any mechanical or other component part, or any mechanical or
25	other component part that does not function as it was originally
26	intended; however, nothing in this part shall prohibit or affect
27	the giving, free of charge, of the usual performance guarantees
28	by manufacturers or dealers in connection with the sale of motor
29	vehicles. Transactions exempt under s. 624.125 are expressly
30	excluded from this definition and are exempt from the provisions
31	of this part. The term "motor vehicle service agreement"
32	includes any contract or agreement that provides:
33	(b) For payment of vehicle protection expenses.
34	1.a. "Vehicle protection expenses" means a preestablished
35	flat amount payable for the loss of or damage to a vehicle or
36	expenses incurred by the service agreement holder for loss or
37	damage to a covered vehicle, including, but not limited to,
38	applicable deductibles under a motor vehicle insurance policy;
39	temporary vehicle rental expenses; expenses for a replacement
40	vehicle that is at least the same year, make, and model of the
41	stolen motor vehicle; sales taxes or registration fees for a
42	replacement vehicle that is at least the same year, make, and
43	model of the stolen vehicle; or other incidental expenses
44	specified in the agreement.
45	b. "Vehicle protection product" means a product or system
46	installed or applied to a motor vehicle or designed to prevent
47	the theft of the motor vehicle or assist in the recovery of the
48	stolen motor vehicle.
49	2. Vehicle protection expenses shall be payable in the
50	event of loss or damage to the vehicle as a result of the
51	failure of the vehicle protection product to prevent the theft
52	of the motor vehicle or to assist in the recovery of the stolen
53	motor vehicle. Vehicle protection expenses covered under the
54	agreement shall be clearly stated in the service agreement form,
55	unless the agreement provides for the payment of a
56	preestablished flat amount, in which case the service agreement
57	form shall clearly identify such amount.
58	3. Motor vehicle service agreements providing for the
59	payment of vehicle protection expenses shall:
60	a. Reimburse a service agreement holder for the following
61	expenses, at a minimum: deductibles applicable to comprehensive
62	coverage under the service agreement holder's motor vehicle
63	insurance policy; temporary vehicle rental expenses; sales taxes
64	and registration fees on a replacement vehicle that is at least
65	the same year, make, and model of the stolen motor vehicle; and
66	the difference between the benefits paid to the service
67	agreement holder for the stolen vehicle under the service
68	agreement holder's comprehensive coverage and the actual cost of
69	a replacement vehicle that is at least the same year, make, and
70	model of the stolen motor vehicle; or
71	b. Pay a preestablished flat amount to the service
72	agreement holder.
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74	Payments shall not duplicate any benefits or expenses paid to
75	the service agreement holder by the insurer providing
76	comprehensive coverage under a motor vehicle insurance policy
77	covering the stolen motor vehicle. However, the payment of
78	vehicle protection expenses at a preestablished flat amount of
79	up to $5,000 does not duplicate any benefits or expenses payable
80	under any comprehensive motor vehicle insurance policy.
81	Section 5. Subsection (11) of section 634.041, Florida
82	Statutes, is amended to read:
83	634.041 Qualifications for license.--To qualify for and
84	hold a license to issue service agreements in this state, a
85	service agreement company must be in compliance with this part,
86	with applicable rules of the department, with related sections
87	of the Florida Insurance Code, and with its charter powers and
88	must comply with the following:
89	(11)(a) A service agreement company offering a service
90	agreementagreementsproviding vehicle protection expenses may
91	meet the requirements for this part only by maintaining a
92	contractual liability insurance policy covering 100 percent of
93	its vehicle protection claim exposurein accordance with
94	paragraph (8)(b), which insurance must be issued by an insurance
95	company not affiliated with the service agreement company,
96	unless the insurance company had issued a contractual liability
97	insurance policy to a service agreement company on or before
98	January 1, 2002. Service agreements providing vehicle protection
99	expenses may be sold only to a service agreement holder that has
100	in-force comprehensive motor vehicle insurance coverage for the
101	vehicle to be covered by the service agreement.
102	(b) Notwithstanding any other requirement of this part, a
103	service agreement company maintaining an unearned premium
104	reserve on all service agreements in accordance with paragraph
105	(8)(a) may offer service agreements providing vehicle protection
106	expenses if it maintains contractual liability insurance only on
107	all service agreements providing vehicle protection expenses and
108	continues to maintain the 50-percent reserve for all service
109	agreements not providing vehicle protection expenses. A service
110	agreement company maintaining contractual liability insurance
111	for all service agreements providing vehicle protection expenses
112	and the 50-percent reserve for all other service agreements
113	shall, in the service agreement register as required pursuant to
114	s. 634.136(4), distinguish between insured service agreements
115	providing vehicle protection expenses and service agreements not
116	providing vehicle protection expenses.
117	Section 6. Paragraph (c) of subsection (1) of section
118	634.121, Florida Statutes, is amended to read:
119	634.121 Filing of forms, required procedures,
120	provisions.--
121	(1) A service agreement form or related form may not be
122	issued or used in this state unless it has been filed with and
123	approved by the department. Upon application for a license, the
124	department shall require the applicant to submit for approval
125	each brochure, pamphlet, circular, form letter, advertisement,
126	or other sales literature or advertising communication addressed
127	or intended for distribution. The department shall disapprove
128	any document which is untrue, deceptive, or misleading or which
129	contains misrepresentations or omissions of material facts.
130	(c) The department shall disapprove any service agreement
131	form providing vehicle protection expenses which does not
132	clearly indicate the method for calculating the benefit to be
133	paid or provided to the service agreement holder or the
134	preestablished flat amount payable pursuant to the terms of the
135	service agreement. All service agreement forms providing vehicle
136	protection expenses shall clearly indicate the term of the
137	service agreement, whether new or used cars are eligible for the
138	vehicle protection product, and that the service agreement
139	holder may not make any claim against the Florida Insurance
140	Guarantee Association for vehicle protection expenses. The
141	service agreement shall be provided to a service agreement
142	holder on a form that provides only vehicle protection expenses.
143	A service agreement form providing vehicle protection expenses
144	must state that the service agreement holder must have in force
145	at the time of loss comprehensive motor vehicle insurance
146	coverage as a condition precedent to requesting payment of
147	vehicle protection expenses.
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149	================= T I T L E A M E N D M E N T =================
150	Remove line(s) 19, and insert:
151	exemptions under certain circumstances; amending s. 634.011,
152	F.S.; revising a definition; amending s. 634.041, F.S.; revising
153	a qualification for licensure as a service agreement company;
154	authorizing a service agreement company to offer service
155	agreements providing vehicle protection expenses under certain
156	circumstances; providing requirements; amending s. 634.121,
157	F.S.; revising a provision authorizing the Department of
158	Financial Services to disapprove certain service agreement forms
159	to include a reference to payment of certain preestablished flat
160	amounts; providing an