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.

Kentucky – Sale of VSC’s – May Be Insurance?

UPDATE:  On March 15, 2013, the Office of Insurance of the Commonwealth of Kentucky issued Advisory Opinion 2013-03 concerning motor vehicle service contracts.    It did so in response to numerous inquiries regarding the repeal of its administrative regulation 806 KAR 5:050, as well as what the DOI described as inconsistencies in 304.5-070(1)(p) of Kentucky’s Insurance laws.  This administrative regulation previously imposed registration requirements of certain motor vehicle service contract providers.

 

According to the DOI, these inconsistencies were brought about through amendments to 190.090, which is found in Kentucky’s law governing Motor Vehicle Sales.  The opinion was issued to clarify the Department’s position regarding the requirements of motor vehicle service contract providers and providers of other products related to vehicle service contracts.

 

In its opinion, the Department explained that in light of the 2012 legislative changes, (House Bill 417 (2012) effective July 12, 2012), it concluded that the exemption from being considered insurance set forth in KRS 304.5-070(1)(p) was “no longer conditioned upon the contract covering defects in material and workmanship nor on the requirement that the maker hold an insurance policy to assure the performance of their duties.”  Therefore, 806 KAR 5:050 had, by that time, been repealed and registration of VSC obligors/providers was no longer required.

 

However, recent communications with the Office of General Counsel of the Kentucky DOI has determined that the exemption from being considered insurance, as set forth in KRS 304.5-070(1)(p) continues to be conditioned upon the VSC (a.k.a. “automobile guaranty” ) being incidental to the business of selling or leasing a motor vehicle.    This would seem to suggest that VSC sales that are not incidental to the business of buying or leasing a car (potentially direct sales via call centers or internet sales), are not exempt from being considered insurance, and thus, may only be offered as insurance products.

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