LEGISLATION & REGULATORY ACTIVITY

• 07/20/10

  Pennsylvania-Model Law Proposed for MV, Home & Consumer Goods

  In contrast to an "exemption" bill moving its way through the Pennsylvania Legislature, a new measure that proposes to regulate all forms of service contracts was introduced in the Senate earlier this month.  PA Senate Bill 1436, introduced on July 2, 2010, would regulate motor vehicle, home and consumer goods service contract providers in a manner consistent with model legislation already enacted in a number of states.  The bill provides for registration of providers with the Department of Insurance and would require demonstration of financial responsibility by insuring the service contract program through a reimbursement insurance policy, maintaining a funded read more

  07/12/10

  Louisiana – PDR and Tire & Wheel Coverage Contract Law Passes

  UPDATE:  Legislation filed in Louisiana expanding the kinds of contracts that can be offered by vehicle mechanical breakdown insurers was effective June 9, 2010.    Under the prior law, such insurers could only offer mechanical breakdown insurance policies limited to coverage for the mechanical breakdown or failure of a motor vehicle and related roadside assistance kinds of benefits.  House Bill 581  establishes a new kind of contract, known as a vehicle component coverage contract,  and authorizes the same licensed insurers to provide paintless dent removal coverage, tire & wheel coverage and windshield coverage.  A restriction that would have permitted  these kinds of coverages to be sold only in conjunction with the read more

• 07/06/10

  Pennsylvania HB 1774 – Exemption Proposal

  A bill proposing to clarify the status of service contracts as "non-insurance" in the state of Pennsylvania continues to move through the state's Legislature.   After a year of activity in the House, HB 1774 finally passed out of the House and was referred to the Senate Insurance Committee on July 1.  This bill defines "service contract" in a manner consistent with industry standards already adopted in a majority of states.  The bill would exempt from insurance regulation any motor vehicle, home or consumer goods contract meeting that definition.  The language in the bill  allows for coverage relating to towing, emergency road service or read more

  06/06/10

  Florida SB 2176 – Service Agreement & Warranty Associations Passes

  Florida’s Senate Bill 2176, proposing numerous changes to the state's service agreement/service warranty association laws, was signed by the Governor yesterday and is effective January 1, 2011 although many sections affecting service warranties are effective upon signature of the Governor.   Key provisions of the legislation include:   Exempts, from regulation under the Florida Insurance Code, motor vehicle service agreements that are sold to “non-consumers”,  i.e., commercial entities or purposes   Broadens the definition of home warranty service agreements.   Eliminates the requirement to file warranty service agreements with the Office of Insurance Regulation (OIR) for approval; however, the amendment read more

• 05/27/10

  TX Residential Service Companies – Rule Amendments Adopted

  FINAL UPDATE: The Texas Real Estate Commission (TREC) recently adopted changes to rules governing Residential Service Companies.  These changes include an amendment to the definition of “employee” of a residential service company and requiring that a specific disclosure be included in the contract in instances where the service company pays a person who is not employed by the company.  Several forms have been revised as well, including the Annual Report and the license application.   A major change to the Annual Report will require the reporting of compensation and other production information relating to use of "non-employee" sales representatives such as real estate brokers, insurance read more

  05/11/10

  Oklahoma SB 2074 – Ratings Required for CLP Insurers Passes

  UPDATE: Senate Bill 2074,  requiring that any insurer issuing a contractual liability policy covering certain service warranties in Oklahoma have a B++ or better rating from A.M. Best Company, Inc., was signed by Governor  April 22, 2010 and is effective upon signing.  Existing law already requires that such insurer maintain a net surplus $15 million or, if less than $15 million but more than $10 million, not exceed a ratio a net written premiums nationally, to surplus and pain-in capital,  of more than 3 to 1. read more

• 05/02/10

  Pennsylvania SB 1334 – Exemption From Insurance Code for Service Contracts

  A bill was introduced in Pennsylvania seeking to exempt the sale of service contracts from regulation as insurance.  Pennsylvania does not currently have a service contract-specific law.  Senate Bill 1334 proposes to define a "service contract" in a manner comparable to the law of many states, and would allow such contracts to offer benefits for accidental damage from handling and damage due to power surge, in additional to the traditional benefits relating to mechanical breakdown and defects.  Legislation like this has been introduced in this state before but has failed to secure passage in prior years. read more

  05/02/10

  Florida HB 751 – Automatic Renewal of Service Contracts

  Florida House Bill 751 (companion to Senate Bill 1332) - is also on its way to the Governor for signature.  The new law provides that an automatic renewal provision in a “service contract”, as defined under the new law, must be clearly and conspicuously disclosed in such contracts where the provision renews a contract for more than one month and where the provision causes the contract to be in effect more than six months after the contract was initiated. However, this legislation includes a specific exemption for entities and contracts offered pursuant to Chapter 634, which is the governing law for read more

• 04/26/10

  Oklahoma SB 1903 – New Home Service Contracts Law Close

  Oklahoma Senate Bill 1903  has passed out of both the  House and the Senate in that state, proposing a new law that would regulate home service contract providers in a manner consistent with standards in place in a majority of other states.  Entitled the Home Service Contract Act, this legislation would subject providers of home service contracts or home warranties, as defined in this bill, to a different regulatory framework than the Service Warranty Act that has been in place in Oklahoma for many years.     Under this bill,  “Home service contract” or “home warranty” is defined, in part,  as: read more

  04/19/10

  New York SB 7465 – New Standards for Protecting Consumers

  New York Senate Bill 7465 (companion to Assembly Bill 10258) would give specific authority to the Commissioner of Insurance to inquire into the affairs and transactions of service contract providers and would require that such entities reply “promptly and truthfully”,  and in some instances, in the form of a sworn statement by a company officer.  The legislation also deems funds held by a provider in a reserve account to now be "fiduciary" in nature and would require that such an account be specifically labeled as such.  The bill proposes changes to disclosure requirements concerning contract termination and refunds as well as proposes read more