| 1 | A bill to be entitled |
| 2 | An act relating to motor vehicle warranty associations; |
| 3 | amending s. 628.4615, F.S.; conforming a cross-reference; |
| 4 | amending s. 634.011, F.S.; defining the term "motor |
| 5 | vehicle manufacturer"; amending s. 634.041, F.S.; |
| 6 | exempting certain motor vehicle manufacturers from certain |
| 7 | licensing requirements; amending s. 634.137, F.S.; |
| 8 | requiring the Office of Insurance Regulation to develop an |
| 9 | abbreviated form for statistical reporting of sales of |
| 10 | service agreements by motor vehicle manufacturers in lieu |
| 11 | of certain other financial reports; amending s. 634.271, |
| 12 | F.S.; conforming a cross-reference; amending s. 634.4165, |
| 13 | F.S.; revising criteria for a required detailed warranty |
| 14 | register of warranties in force; revising certain warranty |
| 15 | holder information requirements; amending s. 634.436, |
| 16 | F.S.; specifying an additional unfair claim settlement |
| 17 | practice; providing an effective date. |
| 18 |
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| 19 | Be It Enacted by the Legislature of the State of Florida: |
| 20 |
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| 21 | Section 1. Paragraph (a) of subsection (1) of section |
| 22 | 628.4615, Florida Statutes, is amended to read: |
| 23 | 628.4615 Specialty insurers; acquisition of controlling |
| 24 | stock, ownership interest, assets, or control; merger or |
| 25 | consolidation.-- |
| 26 | (1) For the purposes of this section, the term "specialty |
| 27 | insurer" means any person holding a license or certificate of |
| 28 | authority as: |
| 29 | (a) A motor vehicle service agreement company authorized |
| 30 | to issue motor vehicle service agreements as those terms are |
| 31 | defined in s. 634.011(7) and (8); |
| 32 | Section 2. Subsections (7) through (16) of section |
| 33 | 634.011, Florida Statutes, are renumbered as subsections (8) |
| 34 | through (17), respectively, and a new subsection (7) is added to |
| 35 | that section to read: |
| 36 | 634.011 Definitions.--As used in this part, the term: |
| 37 | (7) "Motor vehicle manufacturer" means an entity that: |
| 38 | (a) Manufactures or produces motor vehicles and sells |
| 39 | motor vehicles under its own name or label; |
| 40 | (b) Is a subsidiary of an entity that manufactures or |
| 41 | produces motor vehicles; or |
| 42 | (c) Is a corporation that owns 100 percent of an entity |
| 43 | that manufactures or produces motor vehicles. |
| 44 | |
| 45 | For purposes of this subsection, an entity qualifies as a |
| 46 | subsidiary if 25 percent or more of its voting securities are |
| 47 | directly or indirectly owned by an entity that manufactures or |
| 48 | produces motor vehicles and sells motor vehicles under its own |
| 49 | name or label. |
| 50 | Section 3. Subsection (12) is added to section 634.041, |
| 51 | Florida Statutes, to read: |
| 52 | 634.041 Qualifications for license.--To qualify for and |
| 53 | hold a license to issue service agreements in this state, a |
| 54 | service agreement company must be in compliance with this part, |
| 55 | with applicable rules of the commission, with related sections |
| 56 | of the Florida Insurance Code, and with its charter powers and |
| 57 | must comply with the following: |
| 58 | (12) A motor vehicle manufacturer complying with the |
| 59 | provisions of this section must be an entity formed under the |
| 60 | laws of this state or of another state or district of the United |
| 61 | States and is required to comply only with subsections (2) and |
| 62 | (10). A motor vehicle manufacturer is not required to submit |
| 63 | fingerprints, background information, or biographical statements |
| 64 | for any individual except those serving as officers or directors |
| 65 | of an applicant entity. A motor vehicle manufacturer is not |
| 66 | required to comply with s. 634.081(5). Motor vehicle |
| 67 | manufacturers shall be subject to all other applicable |
| 68 | provisions of this part. |
| 69 | Section 4. Subsection (6) is added to section 634.137, |
| 70 | Florida Statutes, to read: |
| 71 | 634.137 Financial and statistical reporting |
| 72 | requirements.-- |
| 73 | (6) The office shall develop by rule an abbreviated form |
| 74 | for statistical reporting of sales of service agreements in this |
| 75 | state by motor vehicle manufacturers to submit in lieu of the |
| 76 | financial reports required in subsections (1) and (2). |
| 77 | Section 5. Subsection (5) of section 634.271, Florida |
| 78 | Statutes, is amended to read: |
| 79 | 634.271 Civil remedy.-- |
| 80 | (5) The penalty provisions in ss. 520.12 and 521.006, as |
| 81 | well as the statutory penalty in subsection (1), do not apply to |
| 82 | any violation of this part or chapters 520 and 521 relating to |
| 83 | or in connection with the sale or failure to disclose in a |
| 84 | retail installment contract or lease, prior to April 23, 2002, |
| 85 | of a vehicle protection product, or contract or agreement that |
| 86 | provides for payment of vehicle protection expenses, as defined |
| 87 | in s. 634.011(8)(7)(b)1., so long as the sale of such product, |
| 88 | contract, or agreement was otherwise disclosed to the consumer |
| 89 | in writing at the time of the purchase or lease. However, in the |
| 90 | event of a violation for which such statutory penalties do not |
| 91 | apply, the court shall award actual damages and costs, including |
| 92 | reasonable attorney's fees. Nothing in this subsection shall be |
| 93 | construed to require the application of the referenced statutory |
| 94 | penalty provisions where this subsection is not applicable. |
| 95 | Section 6. Subsection (2) of section 634.4165, Florida |
| 96 | Statutes, is amended to read: |
| 97 | 634.4165 Office records required.--As a minimum |
| 98 | requirement for permanent office records, each licensed service |
| 99 | warranty association shall maintain: |
| 100 | (2) A detailed warranty register of warranties in force, |
| 101 | by unique identifier. The register shall include the unique |
| 102 | identifier, date of issue, issuing sales representative, name of |
| 103 | warranty holder and the, location of the property to the extent |
| 104 | the name and address have been furnished by the warranty holder, |
| 105 | warranty period, gross premium, commission to sales |
| 106 | representative, and net premium. An association that does not |
| 107 | collect the name and address of the warranty holder at the time |
| 108 | of sale must provide another method for warranty holders to |
| 109 | provide such information, including, but not limited to, |
| 110 | Internet registration, return postcard, or other means |
| 111 | acceptable to the office. |
| 112 | Section 7. Subsection (5) of section 634.436, Florida |
| 113 | Statutes is amended to read: |
| 114 | 634.436 Unfair methods of competition and unfair or |
| 115 | deceptive acts or practices defined.-- The following methods, |
| 116 | acts, or practices are defined as unfair methods of competition |
| 117 | and unfair or deceptive acts or practices: |
| 118 | (5) UNFAIR CLAIM SETTLEMENT PRACTICES.-- |
| 119 | (a) Attempting to settle claims on the basis of an |
| 120 | application or any other material document which was altered |
| 121 | without notice to, or knowledge or consent of, the warranty |
| 122 | holder; |
| 123 | (b) Making a material misrepresentation to the warranty |
| 124 | holder for the purpose and with the intent of effecting |
| 125 | settlement of such claims, loss, or damage under such contract |
| 126 | on less favorable terms than those provided in, and contemplated |
| 127 | by, such contract; or |
| 128 | (c) Committing or performing with such frequency as to |
| 129 | indicate a general business practice any of the following |
| 130 | practices: |
| 131 | 1. Failure properly to investigate claims; |
| 132 | 2. Misrepresentation of pertinent facts or contract |
| 133 | provisions relating to coverages at issue; |
| 134 | 3. Failure to acknowledge and act promptly upon |
| 135 | communications with respect to claims; |
| 136 | 4. Denial of claims without conducting reasonable |
| 137 | investigations based upon available information; |
| 138 | 5. Failure to affirm or deny coverage of claims upon |
| 139 | written request of the warranty holder within a reasonable time |
| 140 | after proof-of-loss statements have been completed; or |
| 141 | 6. Failure to promptly provide a reasonable explanation to |
| 142 | the warranty holder of the basis in the contract in relation to |
| 143 | the facts or applicable law for denial of a claim or for the |
| 144 | offer of a compromise settlement; or |
| 145 | (d) Denying a claim solely on the basis that the |
| 146 | association was not able to confirm that the warranty holder in |
| 147 | fact purchased a service warranty because the association did |
| 148 | not obtain the name and address of the warranty holder as set |
| 149 | forth in s. 634.4165(2). |
| 150 | Section 8. This act shall take effect upon becoming a law. |