Senate Bill sb2498c1
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    Florida Senate - 2005                           CS for SB 2498
    By the Committee on Banking and Insurance; and Senator
    Campbell
    597-2098-05
  1                      A bill to be entitled
  2         An act relating to warranty associations;
  3         amending s. 634.271, F.S.; providing an
  4         exemption from penalty provisions for certain
  5         service warranties; providing actual damages
  6         and costs for violations for which such
  7         statutory penalties do not apply; providing
  8         retroactive applicability; amending s. 634.401,
  9         F.S.; redefining the term "service warranty";
10         providing an effective date.
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12  Be It Enacted by the Legislature of the State of Florida:
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14         Section 1.  Subsection (5) is added to section 634.271,
15  Florida Statutes, to read:
16         634.271  Civil remedy.--
17         (5)  The penalty provisions in ss. 520.12 and 521.006,
18  as well as the statutory penalty in subsection (1), do not
19  apply to any violation of this part or chapters 520 and 521
20  relating to or in connection with the sale or failure to
21  disclose in a retail installment contract or lease, prior to
22  April 23, 2002, of a vehicle protection product, or contract
23  or agreement that provides for payment of vehicle protection
24  expenses, as defined in s. 634.011(7)(b)1., so long as the
25  sale of such product, contract, or agreement was otherwise
26  disclosed to the consumer in writing at the time of the
27  purchase or lease. However, in the event of a violation for
28  which such statutory penalties do not apply, the court shall
29  award actual damages and costs, including a reasonable
30  attorney's fee. Nothing in this subsection shall be construed
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    Florida Senate - 2005                           CS for SB 2498
    597-2098-05
 1  to require the application of the referenced statutory penalty
 2  provisions where this subsection is not applicable.
 3         Section 2.  Subsection (13) of section 634.401, Florida
 4  Statutes, is amended to read:
 5         634.401  Definitions.--As used in this part, the term:
 6         (13)  "Service warranty" means any warranty, guaranty,
 7  extended warranty or extended guaranty, maintenance service
 8  contract equal to or greater than 1 year in length or which
 9  does not meet the exemption in paragraph (a), contract,
10  agreement, or other written promise for a specific duration to
11  perform the repair, replacement, or maintenance of a consumer
12  product, or for indemnification for repair, replacement, or
13  maintenance, for the operational or structural failure due to
14  a defect in materials or workmanship, normal wear and tear,
15  power surge, or accidental damage from handling to indemnify
16  against the cost of repair or replacement of a consumer
17  product in return for the payment of a segregated charge by
18  the consumer; however:
19         (a)  Maintenance service contracts written for less
20  than 1 year or less which do not contain provisions for
21  indemnification and which do not provide a discount to the
22  consumer for any combination of parts and labor in excess of
23  20 percent during the effective period of such contract, motor
24  vehicle service agreements, transactions exempt under s.
25  624.125, and home warranties subject to regulation under parts
26  I and II of this chapter are excluded from this definition;
27  and
28         (b)  The term "service warranty" does not include
29  service contracts between consumers and condominium
30  associations; and.
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    Florida Senate - 2005                           CS for SB 2498
    597-2098-05
 1         (c)  All contracts that include coverage for accidental
 2  damage from handling must be covered by the contractual
 3  liability policy referred to in s. 634.406(3).
 4         Section 3.  This act shall take effect upon becoming a
 5  law and shall apply retroactively to January 1, 1998.
 6  
 7          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
 8                         Senate Bill 2498
 9                                 
10  The committee substitute expands the definition of a "service
    warranty" that may be sold by a licensed service warranty
11  association to include normal wear and tear, power surge
    damage, and accidental damage from handling. The bill also
12  revises the definition to cover warranties of 1 year or
    longer. Any warranty contract that includes coverage for
13  accidental damage from handling must be covered by a
    contractual liability policy purchased by the warranty
14  association covering 100 percent of its total claim exposure.
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