| 1 | A bill to be entitled |
| 2 | An act relating to debt cancellation products; amending s. |
| 3 | 624.605, F.S.; including debt cancellation products under |
| 4 | casualty insurance; describing debt cancellation products; |
| 5 | authorizing certain entities to offer debt cancellation |
| 6 | products under certain circumstances; specifying such |
| 7 | products as not constituting insurance; amending s. |
| 8 | 626.9541, F.S.; providing an additional exclusion from a |
| 9 | prohibition against free insurance for certain property |
| 10 | insurance; creating s. 655.947, F.S.; defining debt |
| 11 | cancellation products; authorizing financial institutions |
| 12 | to offer such products; authorizing a fee; requiring the |
| 13 | Financial Services Commission to adopt rules; amending s. |
| 14 | 520.07, F.S.; requiring the commission to adopt rules for |
| 15 | the sale of such products by motor vehicle retail |
| 16 | installment sellers; providing an effective date. |
| 17 |
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| 18 | Be It Enacted by the Legislature of the State of Florida: |
| 19 |
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| 20 | Section 1. Paragraph (r) is added to subsection (1) of |
| 21 | section 624.605, Florida Statutes, to read: |
| 22 | 624.605 "Casualty insurance" defined.-- |
| 23 | (1) "Casualty insurance" includes: |
| 24 | (r) Debt cancellation products.--Insurance that a creditor |
| 25 | may purchase against the risk of financial loss from the use of |
| 26 | debt cancellation products with consumer loans or leases or |
| 27 | retail installment contracts. |
| 28 | 1. For purposes of this paragraph, debt cancellation |
| 29 | products, including, but not limited to, debt cancellation |
| 30 | contracts, debt suspension agreements, and guaranteed asset |
| 31 | protection contracts, are loan, lease, or retail installment |
| 32 | contract terms, or modifications to loan, lease, or retail |
| 33 | installment contracts, under which a creditor agrees to cancel |
| 34 | or suspend all or part of a customer's obligation to make |
| 35 | payments upon the occurrence of specified events. |
| 36 | 2. Debt cancellation products may be offered by financial |
| 37 | institutions, as defined in s. 655.005(1)(h), and including |
| 38 | insured depository institutions, as defined in 12 U.S.C. s. |
| 39 | 1813(c), and subsidiaries of such institutions, as provided in |
| 40 | the financial institution codes, or motor vehicle retail |
| 41 | installment sellers, as defined in s. 520.02(15) or retail |
| 42 | lessors, as defined in s. 521.003(8), and such products shall |
| 43 | not constitute insurance for purposes of the Florida Insurance |
| 44 | Code. |
| 45 | Section 2. Paragraph (n) of subsection (1) of section |
| 46 | 626.9541, Florida Statutes, is amended to read: |
| 47 | 626.9541 Unfair methods of competition and unfair or |
| 48 | deceptive acts or practices defined.-- |
| 49 | (1) UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE |
| 50 | ACTS.--The following are defined as unfair methods of |
| 51 | competition and unfair or deceptive acts or practices: |
| 52 | (n) Free insurance prohibited.-- |
| 53 | 1. Advertising, offering, or providing free insurance as |
| 54 | an inducement to the purchase or sale of real or personal |
| 55 | property or of services directly or indirectly connected with |
| 56 | such real or personal property. |
| 57 | 2. For the purposes of this paragraph, "free" insurance |
| 58 | is: |
| 59 | a. Insurance for which no identifiable and additional |
| 60 | charge is made to the purchaser of such real property, personal |
| 61 | property, or services. |
| 62 | b. Insurance for which an identifiable or additional |
| 63 | charge is made in an amount less than the cost of such insurance |
| 64 | as to the seller or other person, other than the insurer, |
| 65 | providing the same. |
| 66 | 3. Subparagraphs 1. and 2. do not apply to: |
| 67 | a. Insurance of, loss of, or damage to the real or |
| 68 | personal property involved in any such sale or services, under a |
| 69 | policy covering the interests therein of the seller or vendor. |
| 70 | b. Blanket disability insurance as defined in s. 627.659. |
| 71 | c. Credit life insurance or credit disability insurance. |
| 72 | d. Any individual, isolated, nonrecurring unadvertised |
| 73 | transaction not in the regular course of business. |
| 74 | e. Title insurance. |
| 75 | f. Any purchase agreement involving the purchase of a |
| 76 | cemetery lot or lots in which, under stated conditions, any |
| 77 | balance due is forgiven upon the death of the purchaser. |
| 78 | g. Life insurance, trip cancellation insurance, or lost |
| 79 | baggage insurance offered by a travel agency as part of a travel |
| 80 | package offered by and booked through the agency. |
| 81 | h. Insurance covering property, other than real property |
| 82 | or motor vehicles, if the person paying for the insurance: |
| 83 | (I) Has an ongoing contractual interest or other economic |
| 84 | interest in the property; or |
| 85 | (II) Requires the property to deliver its services. |
| 86 | 4. Using the word "free" or words which imply the |
| 87 | provision of insurance without a cost to describe life or |
| 88 | disability insurance, in connection with the advertising or |
| 89 | offering for sale of any kind of goods, merchandise, or |
| 90 | services. |
| 91 | Section 3. Section 655.947, Florida Statutes, is created |
| 92 | to read: |
| 93 | 655.947 Debt cancellation products.-- |
| 94 | (1) Debt cancellation products, including, but not limited |
| 95 | to, debt cancellation contracts, debt suspension agreements, and |
| 96 | guaranteed asset protection contracts, are loan or lease |
| 97 | contract provisions, or modifications to loan or lease |
| 98 | contracts, under which a creditor agrees to cancel or suspend |
| 99 | all or part of a customer's obligation to make payments upon the |
| 100 | occurrence of specified events. Debt cancellation products may |
| 101 | be offered, and a fee charged, by financial institutions and |
| 102 | their subsidiaries subject to the provisions of this section. As |
| 103 | used in this section, the term "financial institutions" includes |
| 104 | those as defined in s. 655.005(1)(h) and insured depository |
| 105 | institutions as defined in 12 U.S.C. s. 1813(c). |
| 106 | (2) The commission shall adopt rules pursuant to ss. |
| 107 | 120.536(1) and 120.54 to administer this section, which rules |
| 108 | must be consistent with 12 C.F.R. part 37, as amended. |
| 109 | Section 4. Subsection (11) is added to section 520.07, |
| 110 | Florida Statutes, to read: |
| 111 | 520.07 Requirements and prohibitions as to retail |
| 112 | installment contracts.-- |
| 113 | (11) The commission shall adopt rules to administer the |
| 114 | sale of debt cancellation products as defined in s. |
| 115 | 624.605(1)(r) by motor vehicle retail installment sellers. |
| 116 | Section 5. This act shall take effect July 1, 2007. |