Home Page Archive
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12/17/12Texas Home Warranties – Proposed Regulations
The Texas Real Estate Commission (TREC) is responsible for licensing of residential or home service contract companies. TREC has recently proposed amendments to its regulations governing companies offering home warranties, a.k.a., Residential Service Companies (RSC). RSCs are companies that offer residential or home warranty or home service contracts to maintain, repair or replace all or any part of the appliances, structural components, electrical, plumbing, heating, or air conditioning systems of residential property. These proposed rules amend the Funded Reserve section of existing rules by expanding the eligible liquid assets that may be used to fund the required reserve to include read more
11/05/12Kentucky – VSC CLP No Longer RequiredThe Kentucky Department of Insurance has proposed the repeal of 806 KAR 5:050, which is the administrative regulation that the Department has historically relied upon in regulating vehicle service contracts obligors. The proposed repeal is in keeping with changes enacted earlier this year as a result of the enactment of Kentucky House Bill 417 which was effective on July 12. Among other things, HB 417 amended Kentucky’s definition of “casualty” insurance which includes a definition of “automobile guaranty”. The 2012 amendments to this statute(304.5-070, KRS), effectively carve out from this definition various types of agreements that are often sold read more
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11/01/12Oklahoma – Eff: 11-1-12 -MV & Consumer Goods Service Warranties
UPDATE: Senate Bill 1475 was sent to the Governor on April 19, 2012. Once it becomes law, this legislation will more clearly settle the status of motor vehicle and consumer goods service warranties as non-insurance products. Current law relating to home service contracts already provides that such are not insurance. Oklahoma’s current law, entitled the Service Warranty Insurance Act, would be repealed under Senate Bill 1475, and an almost identical statutory scheme for regulating these contracts would be codified in another section of law, as the Service Warranty Act. Under this legislation, service warranties would continue to be regulated by read more
10/05/12UPDATE Nebraska Rules Finalized – VSC FilingsThe Director of the Nebraska Department of Insurance (NDOI) has published proposed amendments of Title 210, Nebraska Administrative Code, Chapter 58 – Motor Vehicle Service Contract Reimbursement Insurance. According to materials published by the NDOI, the proposed amendments streamline the filing requirements for motor vehicle service contracts (MVSCs). Currently, MVSC providers are responsible for filing a copy of the MVSC form with the Department prior to use, while reimbursement insurers are responsible for filing a copy of the MVSC reimbursement policy with the department prior to use. Both entities must file a “notice of filing” form provided by the department. read more
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03/22/10Washington HB 3032 – Stand-Alone Tire & Wheel Coverage
UPDATE: House Bill 3032 (companion to SB 6624) was signed by the Governor last week and becomes effective June 10, 2010. This new law clarifies that a motor vehicle service contract may provide benefits relating to the repair or replacement of tires or wheels which are damaged as a result of coming in contact with road hazards, i.e., potholes, rocks, glass, etc. The new law further clarifies that such a benefit can be offered on a stand-alone basis, and does not necessarily have to be a part of a contract that covers other parts of the vehicle. The new law exempt a tire or wheel read more
03/22/10Virginia HB 532 – Exemption for Home Service Contract ProvidersUPDATE: Virginia House Bill 532 has been signed by the Governor and becomes effective July 1, 2010. This new law establishes an exemption from regulation for home service contract providers that can demonstrate a net worth in excess of $100 million. The Virginia Bureau of Insurance is in the process of developing a protocol for requesting such an exemption and further guidance will be published on its website at http://www.scc.virginia.gov/division/boi/index.htm in the coming weeks. The law did not change with respect to all other home service contract providers who are required to be licensed with the Virginia Bureau of Insurance and meet various qualifications including, but not limited to, maintaining minimum read more
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03/15/10PDR and Road Hazard Considered in New York and Wyoming
Bills in at least two states are moving through state legislatures to allow for Paintless Dent Removal (PDR) services as a form of service contract. In New York, SB 2092 has advanced to its Third Reading in the Senate and would amend the state's definition of "service contract" by including a contract offered by or for the supplier or seller of PDR services. Consistent with other state laws governing such agreements, this bill does not allow a service contract to include services that involve the replacement of vehicle body panels, sanding, bonding or painting. In Wyoming, House Bill 90 was signed by the Governor read more
01/30/10Louisiana – New Home Service Contract Provider RegistrationA new law regulating the home service contract industry became effective January 1, 2010 . The new law requires registration of any home service contract provider operating in that state. To qualify as a home service contract provider, an entity must file its organizational documents (Articles of Incorporation, ByLaws) and demonstrate compliance with one of three financial responsibility requirements: insurance backing the service contract program; file a surety bond with the state’s Department of Insurance and maintain a reserve fund to pay future claims, or show evidence of having a net worth of at least $25 million. The law also read more
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01/20/10California Assembly Bill 63 (2009) – New Retailer Requirements
This new law, amending California’s Civil Code, now requires any retailer that sells service contracts to either maintain contract information that includes a description of the terms and conditions of the service contract and to provide that information to the purchaser of the service contract upon request, or to obtain an actual copy of the actual service contract and make a copy available to the purchases upon request. Either form of documentation must be provided to the purchaser or other beneficiary of the service contract within 10 business days of the request. This requirement only applies during the period time read more
01/20/10Arkansas – Amendment to Service Contract ActDue to a codification error in the Service Contracts Act, which was enacted in 2007, the Arkansas Department of Insurance pursued an amendment in the state's 2009 legislative session addressing financial responsibility requirements of service contract providers. According to the Department's Bulletin 6-2009, the original law required a service contract provider to meet the financial requirements for doing business in that state by only placing a minimum of $25,000 on deposit with the Department. This, according to the DOI, allowed providers to be less financially secure than was intended. The 2009 amendment sets forth the three ways a provider can comply with the Act’s applicable financial requirements which read more