UPDATE – FINALLY !! The Insurance Department of the District of Columbia has posted the new Registration Application for Service Contract Providers on its website. The new law requiring registration of obligors goes into effect this week. Review our earlier recap below and visit the Department’s website for more information.
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This legislation has been enacted and the District of Columbia Department of Insurance has 180 days to implement. Staff of the DOI advised recently that they are drafting administrative regulations that will provide specifics as to the forms and process for registration. They hope to be able to publish an application for registration sometime in June. Registration of providers will be required as of August 21, 2019.
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The District of Columbia has recently introduced legislation that will regulate the service contract industry in a manner consistent with many other states. Legislative Bill 22-584 proposes to establish a regulatory framework that includes the following:
- Registration of all Providers (obligors) with no registration for Administrators;
- Would be applicable to motor vehicle, consumer goods and home service contracts;
- Includes a partial exemption for motor vehicle manufacturer obligors
- Would permit “accidental damage from handling” and “power surge” benefits
- Would permit tire & wheel benefits and windshield crack repair/replacement due to “road hazard”;
- Would also permit paintless dent removal; repair of interior components due to wear and tear and key or key fob replacement if the key or fob become inoperable, or is lost or stolen
Providers would be required to qualify by satisfying one of three financial responsibility methods: insuring obligations under a reimbursement insurance policy; maintaining a net worth of $100M or filing a deposit with the state and maintain a funded reserve account. The legislation also requires various consumer disclosure in a service contract, which would not be subject to filing with the regulator. Other post-registration compliance requirements are established as well.
In enacted, the legislation would take effect following approval by the Mayor, a 30-day congressional review and publication in the D.C. Register.
