Need help navigating the service contract, extended warranty or GAP waiver regulatory process?

If you are a provider, administrator, seller or insurer of service contracts or GAP waivers; or want to be, let us be your guide to all the state service contract/extended warranty and GAP waiver laws around the country.  We can help guide you through the licensing and registration hoops;  and also help you establish and maintain a compliant service contract, extended warranty or GAP program.

The Service Contracts Compass is designed to assist companies like yours by providing valuable information about changes in laws and regulations which may impact your service contract or GAP waiver programn and by offering compliance consulting services that can help you keep pace with the insurance laws. service contract laws and GAP waiver laws that govern your industry.

Depending on how your service contract program is structured, or if you are just starting out, some or all of the questions below may be worth exploring…and we can help!

- Do you wonder about recent law changes and need help implementing them accurately and timely?

- Do you need help developing a strategy to expand your program into other states?

- Are you considering the acquisition of an existing provider or program and need a due diligence audit?

- Do you and your program partners have the right license(s) for the kinds of service contracts that you offer or sell?

- Do you qualify for any exemptions that you may be unaware of?

- Are you calculating and returning refunds accurately in every jurisdiction?

- Could you benefit from a limited scope operational audit conducted by someone that is “on your team” to help identify potential regulatory problems before a regulator does?

- Do you have a knowledgeable resource who can offer issue-by-issue and state-by-state support for regulatory matters that may arise regarding your service contract program?

Be proactive rather than reactive!  Whether it’s regulatory filing support, contract analysis, or help communicating with a regulator, we have the experience and expertise in the world of service contract laws to offer strategies and solutions for every aspect of your program.

Please explore other areas of this site and be sure to read more about our firm’s practice group and its services. Check out our Service Contract and Extended Warranty Law Services and learn more about our Insurance Regulatory Practice Group.

Legislation & Regulatory Activity

  • 06/06/16
    Maryland – Retail Sellers of VSCs Expanded

    Maryland House Bill 675 was recently signed by the Governor.  This legislation addresses an issue that was seemingly overlooked in last year’s update to this state’s Mechanical Repair Contract (a.k.a. Vehicle Service Contract) law.   Under the current law, only registered obligors or licensed Motor Vehicle Dealers are permitted sell a VSC.  In other words, no third-party sellers, such as a contracted call center, were permitted to sell VSCs in this state.   This legislation, which becomes effective October 1, 2016, authorizes an “agent”, as well as a registered obligor or MV dealer to offer, sell, or negotiate a mechanical read more

    06/06/16
    Colorado – Expands MV Service Contract Benefits

    Colorado House Bill 1317 amends the state’s definition of “motor vehicle service contract” by allowing new ancillary benefits including: repairing or replacing tires or wheels on a motor vehicle damaged as a result of coming into contact with road hazards; removing dents, dings, or creases on a motor vehicle that can be repaired using the process of paintless dent removal without affecting the existing paint finish and without replacing vehicle body panels, sanding, bonding, or painting; replacing or repairing a windshield damaged by road hazards; replacing a motor vehicle key or key fob if the key or key fob becomes read more

  • 05/01/16
    Utah Service Contracts and VPP Warranties

    Utah House Bill 36 has been signed by the Governor and will be effective on May 10, 2016.  In an omnibus bill proposed by the Utah Department of Insurance, sections of the state's service contract law will be amended.   Specifically, HB 36 modifies the definition of "Service Contract Reimbursement Policy" or "Reimbursement Policy" to now include coverage of the obligations of either a service contract provider (obligor) as well as a Vehicle Protection Product Warrantor.    While this state's law already regulates the offering of VPP warranties, the law provides added clarification and a few technical updates.   The read more

    05/01/16
    New Jersey – GAP Waiver Model Legisation

    Legislation to enact the industry "model" relating to offering Guaranteed Asset Protection ("GAP") waivers was recently introduced in the State of  New Jersey.   Assembly Bill 3601 would provide a clear statutory framework within which GAP waivers could be offered in this state.   The legislation defines and distinguishes various types of creditors that may offer GAP waivers and would require that only licensed motor vehicle dealers to insure their GAP waiver obligations under an appropriate reimbursement insurance policy.  Such dealers would not be required to insure GAP waivers offered in connection with leased vehicle.  Other types of creditors are permitted, read more

  • 04/29/16
    Illinois Vehicle Protection Products

    Illinois Senate Bill 2771 seeks to amend the state's current definition of "vehicle protection product" by including protective chemicals and substances and excluding fuel additives, oil additives or other chemical products applied to the engine, transmission or fuel system of a vehicle.     The bill clarifies that VPP product warranties are not subject to the state's Service Contract Law unless it is offered as a vehicle service contract.   Current law already requires that VPP warranties must be insured under an warranty reimbursement insurance policy.  Other compliance requirements are also applicable.     This bill has cleared consideration in the read more

    04/02/16
    Washington – Service Contract and VPP Changes

    Senate Bill 6309  amends the State's options for assessing the financial responsibility of certain service contract providers in the State of Washington and is effective June 9, 2016.   Current law requires that a provider be "solvent",  and the Washington Office of the Insurance Commissioner has historically applied a subjective standard to measuring solvency by requiring at least two years of audited financial statements evidencing a profitable service contract operation.   This legislation willd reduce the State's requirement from two to one year's worth of financial statements.   Further, it would allow such financial statements to be certified by company officers, read more

  • 03/25/16
    Alabama Vehicle Service Contracts Expanded

    The Alabama Legislature has expanded the state's service contract law to expressly permit the inclusion of various ancillary benefits in a VSC.  The newly permitted benefits are:   Tire & Wheel / Road Hazard Windshield Crack Repair Paintless Dent/Ding Repair Key/Key Fob Replacement   House Bill 7 is currently awaiting signature of the Governor.  Once signed, it will be effective on the 1st day of the 3rd month following the Governor's approval. read more

    03/15/16
    Florida MV – Service Contracts (PDR/T&W/Key)

    UPDATE:  This bill has been enacted and is effective July 1, 2016.   Legislation was recently introduced in Florida proposing to amend and clarify certain ancillary benefits permitted under the State’s Motor Vehicle Service Agreement (MVSA) law.  Florida House Bill 875, (see also companion Senate Bill 1120), was filed last month and has been referred to the House Insurance and Banking Subcommittee as well as the House Regulatory Affairs Committee for consideration.   Current law defines an MVSA as one that may provide coverage or protection “in conjunction with an additive product” applied to the vehicle.  Current law defines “additive read more

  • 03/15/16
    Virginia Home Service Contracts – Updated Financial Requirements

    Virginia House Bill 304 became law upon approval by the Governor on February 29, 2016.   This bill authorizes the State Corporation Commission (SCC), which regulates home service contract providers,  to deny an initial license application based on its review of the financial statements and any reports, certificates, or other documents filed with the SCC.   Current law requires that an applicant demonstrate minimum net worth (surplus) of $100,000 - and this legislation clarifies that audited financial statements may be required to make this assessment.   The measure also changes the license renewal cycle for home service contract providers from read more

    02/27/16
    Rhode Island – GAP Waiver Model Legislation

    Legislation has been proposed in the State of Rhode Island that would provide for the regulation of GAP Waivers in a manner consistent with the industry model law already enacted in a number of states.   Earlier this month, Rhode Island House Bill 7712 and its companion Senate Bill 2424 were introduced in this state.  While various forms of creditors may offer GAP waivers, only retail sellers of motor vehicles that extend credit relating to the sale of their vehicles, would be required to insure their obligations under a contractual liability policy.  Certain disclosures are required to be in the read more

The information on this website is provided solely for informational purposes and presents only highly condensed summaries or general information relating to the topics presented. Therefore, it should not be relied upon as a complete record for purposes of regulatory compliance, nor is it intended to furnish legal advice adequate to any particular circumstances.  (c) Copyright Shirley F. Kerns 2016