If you are a provider, administrator, seller or insurer of service contracts; or want to be, let us be your resource for valuable information and services to help you establish and maintain a compliant service contract or extended warranty 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 operation and by offering compliance consulting services that can help you keep pace with the regulatory standards of 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?

 

- Should you be charging or collecting state sales tax on the sale of your service contracts?

 

- 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 SERVICES and ABOUT US  to learn more.

LEGISLATION & REGULATORY ACTIVITY

  • 01/24/12
    New Jersey “Model Act” Legislation – MV, Home & Consumer Goods

    Legislation recently filed in New Jersey would establish a statutory framework for regulating motor vehicle, home and consumer goods service contracts in a manner similar to that which is place in a number of other states.  Assembly Bill 1740, and its companion Senate Bill 854, define “Service Contract” as a contract that provides for the repair, replacement, maintenance or service of a motor vehicle or residential or other property, relating to the operational failure or structural failure of the motor vehicle or other property, due to a defect in materials or workmanship.  Such contracts may include coverage for normal wear read more

    01/24/12
    Nebraska Legislative Bill 1054 – Ancillary Protection Products

    This recently filed legislation defines “ancillary protection product warranty” and “ancillary protection product service contract” and creates a carve-out from regulation under the Insurance Code for such agreements.       The ancillary protection product (“APP”) warranty  would allow a warrantor to cover incidental costs that result from the failure of the protection product to prevent loss or damage to a motor vehicle from specific causes.  Ancillary protection products include such things as chemical additives, alarm systems, steering locks, window etch products and ignition kill switches.     The legislation provides that covered incidental costs may include insurance deductibles, rental vehicle costs, sales read more

  • 01/11/12
    Michigan Senate Bill 796 – Prohibition of Automatic Renewal

    Senate Bill 796 was recently filed for consideration by the Michigan Legislature.  This bill, which is similar to one filed last year, proposes to amend Michigan’s Consumer Protection Act by prohibiting, under certain circumstances,  an automatic renewal provision within a consumer agreement.   Michigan’s Consumer Protection Act is part of the state’s Trade and Commerce law and is enforced by the Attorney General.  This law addresses, among other things,  unfair and deceptive practices in the area of trade and commerce and deems them to be prohibited.    SB 796 proposes to add to the list of prohibited practices the enforcement of, read more

    01/03/12
    Washington HB 2218 – Expanding Definition of “Service Contract”

    Recently introduced Washington House Bill 2218 seeks to amend this state's definition of "service contract" by more specifically addressing certain home-related coverages.  In addition to current law which provides, in part, that a regulated "service contract", is one that promises to repair, replace or maintain "property" when it fails due to a defect,  HB 2218 expands this definition to include contracts that repair, replace or maintain residential systems such as electrical, telecommunication, plumbing, mechanical, water, sewer or utility systems.    The legislation does not seek to change existing registration requirements for providers (obligors) of such contracts. read more

  • 01/03/12
    Florida SB 1262 – MV, Home and Consumer Goods

    Legislation recently filed in Florida would establish new standards for issuing refunds relating to cancelled motor vehicle service warranties.  Current law permits refunds to be "effectuated" through the retail seller of the MV service agreement.  Senate Bill 1262 proposes new requirements for how the unearned premium, including the corresponding unearned commission and sales tax, are to be refunded to the consumer.   In addition, the legislation establishes specific records that must be maintained relating to refund.    In the case of a consumer goods service warranty, the legislation provides that refunds can be made by a variety of means, including store credit or gift cards.  read more

    12/01/11
    Oklahoma – New Home Service Contract Act (Senate Bill 780)

    On November 1, 2011, Oklahoma's new Home Service Contract Act became effective, establishing a new framework for regulating the home service contract industry in this state.    The new law enacts a regulatory framework much like what has been adopted in a number of states for regulating all forms of service contracts.  However, this new law applies only to home service contracts and does not change ore repeal current requirements applicable to obligor companies (service warranty associations) offering service warranties (service contracts) covering motor vehicles or consumer goods.    The new law requiresa three-year registration of the provider (oblig0r) which includes demonstrating compliance with one of read more

  • 10/27/11
    Nevada Proposed Regulation Governing CLP Insurers

    The Nevada Division of Insurance recently proposed draft language defining “affiliate” in connection with the new law governing service contract programs that insure their obligations through a contractual liability policy.  Under the new law, which was effective October 1, 2011, unless the provider/obligor can demonstrate and maintain $100M in net worth, its obligations must be insured under a CLP.  That CLP may not be issued by an insurer that is an “affiliate” of the provider/obligor.    The draft of language amending Chapter 690C of the Nevada Administrative Code, defines “affiliate” as:   “a person who directly or indirectly, through one or read more

    08/01/11
    Nevada Assembly Bill 74 – Eliminates Reserving/Deposit Option

    AB 74, which was recently signed by Nevada's Governor, will eliminate one of the industry’s standard methods for service contract providers to satisfy financial responsibility requirements in that state. The new law, effective October 1, 2011, eliminates the reserve account and deposit method that has been available for many years.   The new law, which applies to motor vehicle, consumer goods and home service contract programs, maintains the ability to insure a service contract program through a contractual liability policy or for a provider to demonstrate a $100M net worth. However, the new law now prohibits use of a contractual liability policy read more

  • 07/06/11
    North Carolina HB 575 – New Reserving Option Enacted

    Recently signed by the Governor of North Carolina, House Bill 575 will establish a new financial responsibility option for service contract providers offering motor vehicle, home and certain consumer goods service contracts.   The new law, which was effective July 1, 2011, will allow companies offering service contracts to now maintain a funded reserve account in lieu of insuring their obligations through a contractual liability policy or maintaining a $100M net worth.   The account must be maintained at a level equal to or greater than 40% of gross consideration, less claims paid, for all contracts in force in that state.  This read more

    06/06/11
    Missouri SB 132 – VSC Retail Seller Licensing and More

    UPDATE - Senate Bill 132, was delivered to the Governor on May 26, 2011 and is expected to be signed.   If signed, the new law will be effective January 1, 2012 and will require licensure of any retail seller of a motor vehicle service contract (VSC), on behalf of a registered VSC provider, unless such seller is already a manufacturer of motor vehicles, a federally-insured depository institution or a lender.  Such licensure can be in the form of either a licensed motor vehicle dealer holding an organizational credit entity license, or a limited lines insurance producer’s license for the newly amended limited line read more

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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.