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Washington HB 3032 – Stand-Alone Tire & Wheel Coverage

admin — Mon, 22 Mar 2010 18:58:03 +0000

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 manufacturer offering such coverage from regulations otherwise applicable to motor vehicle service contract providers generally.

Virginia HB 532 – Exemption for Home Service Contract Providers

admin — Mon, 22 Mar 2010 18:46:22 +0000

UPDATE: 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 net worth requirements and placing at least $25,000 on deposit with the agency.

PDR and Road Hazard Considered in New York and Wyoming

admin — Tue, 16 Mar 2010 00:27:03 +0000

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 last week and amends existing law by permiting service contracts to offer similar PDR services. The new Wyoming law further provides that a service contract may provide road hazard protection by allowing for the repair or replacement of tires or wheels damaged as a result of coming into contact with ordinary road hazards such as potholes, curbs and glass. Such an agreement offered by a tire or wheel manufacturer is exempt from regulation under the state’s service contract law. As drafted, the legislation in both states would appear to allow such contracts to be offered on a stand-alone basis and not be required as a component of a broader mechanical breakdown type of service contract. The Wyoming bill is effective July 1, 2010. Check back for updates on the New York legislation.

Louisiana – New Home Service Contract Provider Registration

admin — Sun, 31 Jan 2010 02:57:49 +0000

A 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 establishes required disclosures in any service contract sold in the state and samples of such contracts are requested as part of the provider registration application filing.

California Assembly Bill 63 (2009) – New Retailer Requirements

admin — Thu, 21 Jan 2010 00:27:44 +0000

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 in which the service contact is in effect and does not apply to service contracts covering motor vehicles. This law was effective August 5, 2009.

Arkansas – Amendment to Service Contract Act

admin — Thu, 21 Jan 2010 00:24:01 +0000

Due 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 are: a) insure the program through a contractual liability policy; b) place a minimum of $25,000 on deposit with the Department and maintain an unearned premium reserve fund with specified minimums; or c) maintain a net worth of $100 million. This new law was effective July 31, 2009.