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.

Legislation & Regulatory Activity

  • 09/11/18
    Arizona – Change in Eligible Deposits for Service Companies

    In the event your company hasn't gotten "the word", newly enacted legislation in Arizona effective 08/03/2018 affects Service Companies (Motor Vehicle, Consumer Goods and Home obligors)  in several areas, one of them being the types of valid financial security deposit to maintain a Service Company Permit.  Certificates of Deposit are no longer an option as financial security.   The valid forms of security deposit are now a Contractual Liability Policy ("CLP"), a surety bond for $100,000, or marketable securities deposited with our custodial bank Union Bank in the amount of $100,000.  The steps that need to be taken are dependent read more

    Nevada – New Disclosure Requirement – Service Contracts

    Nevada has recently amended its administrative rule relating to Service Contracts.  The amendment was effective June 26, 2018.  The existing regulation already required that in the event a service contract relates to “goods that are essential to the health and safety of the holder”, and the repair of such goods involves the loss of heating or cooling, loss of plumbing or substantial loss of electrical service and the emergency renders a dwelling unfit for a person to live in because of defects that immediately endanger the health and safety of the occupants of the dwelling", that repairs are required to read more

  • 05/28/18
    Oklahoma – Eliminates Statutory Accounting Requirement

    The Oklahoma Legislature has changed the rules relating to how a Service Warranty Association (SWA) maintains and reports its financials to the Insurance Department in this state.      Through an amendment to the definition of "net assets" and "insolvent", Senate Bill 1142 effectively eliminates Oklahoma's long-standing requirement that an SWA maintain its financial statements pursuant to Statutory Accounting Principles (SAP).  Under SAP, certain assets are not recognized when evaluating a company's surplus position.   Even though Oklahoma has not historically required that a prescribed level of surplus be maintained,  the state did require that an SWA maintain a "solvent" position read more

    Minnesota – Adds Ancillary Benefits for VSCs

    Minnesota House File 3418, recently signed by the Governor, amends the state's service contract law by permitting the following benefits in a Vehicle Service Contract:   Tire/Wheel due to Road Hazard - which is now clearly defined Paintless Dent Repair Windshield Crack Repair/Replacement Key/Key Fob Replacement   Minnesota's service contract law already permitted benefits related to "road hazard", but the term was not previously defined.  This legislation clarifies the existing law in this area, and authorizes new benefits not previously permitted.   The new law is effective August 1, 2018. read more

  • 05/13/18
    Arizona – Service Contracts – finally a model law!

    Arizona Senate Bill 1381, signed by the Governor April 5, 2018, finally brings this state's regulation of motor vehicle, consumer goods and home service contracts in line with the vast majority of other states regulating such agreements.  The bill adds to the current definition of "service contracts" express authority to provide the following common benefits in a service contract:   Accidental Damage from Handling Power Surge Tire & Wheel repair due to Road Hazard Paintless Dent Removal Key / Key Fob Replacement   Notably absent from the new law is the allowance for windshield crack repair due to encountering a read more

    Utah – Service Contracts, VPP and GAP

    Utah House Bill 39 has enacted new definitions and disclosure requirements for certain service contracts, VPP warranties and GAP waivers.    The bill defines "incidental costs" in connection with a VPP warranty, which heretofore had not been defined.  The bill also adds to the suite of eligible VPP products those that aid in the recovery a the stolen vehicle - no longer being limited only to products that are designed to prevent or deter theft.    In the case of certain VPP disclosures, a "conspicuous statement" is required which is defined, in part, to be in all capital letters, bold read more

  • 05/01/18
    Indiana – GAP Agreement Disclosures

    UPDATE - Enacted and effective July 1, 2018 - Amendments to Indiana's law governing certain consumer credit transactions, and the associated offering of GAP agreements, may be in for substantive changes this year.   Indiana House Bill 1397, recently filed in the state's legislature, would require a number of new disclosures to be contained in any GAP agreement sold in the state.  In addition, an affirmative written request for coverage will be required of the purchasing consumer, after receiving the new disclosures. read more

    West Virginia – GAP Legislation Introduced

    UPDATE - West Virginia House Bill 4186 became effective March 28, 2018.    This legislation enacts the industry "model" relating to offering Guaranteed Asset Protection ("GAP") waivers..   House Bill  4186 now provides a clear statutory framework within which GAP waivers could be offered in this state.   The legislation defines and distinguishes various types of creditors that may offer GAP waivers and requires that "retail sellers" of  motor vehicles insure their GAP waiver obligations under an appropriate reimbursement insurance policy.  A creditor, other than a retail seller of vehicles, is not be required to insure GAP waivers offered in connection with leased vehicle.    read more

  • 01/22/18
    Alabama – Revision to GAP Waiver Cancellations

    A bill seeking to modify the termination and refund provisions of Alabama's GAP law was recently introduced in the state.   Current law requires that in the event of cancellation of a GAP waiver due to early termination of the associated finance agreement, the creditor must issue any refund due to the borrower within 60 days of cancellation, without requiring the borrower to request cancellation of the waiver.  House Bill 99 proposes to extend that period to 120 days. read more

    Mississippi – GAP Legislation Introduced

    Legislation to enact the industry "model" relating to offering Guaranteed Asset Protection ("GAP") waivers was recently introduced in the State of  Mississippi.   House Bill  1195 would provide a clear statutory framework within which GAP waivers could be offered in this state.   The legislation defines and distinguishes various types of creditors that may offer GAP waivers and would require that "retail sellers" of  motor vehicles insure their GAP waiver obligations under an appropriate reimbursement insurance policy.  A creditor, other than a retail seller of vehicles, would not be required to insure GAP waivers offered in connection with leased vehicle.    The bill read more

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