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OLR Bill Analysis
sSB 1425
AN ACT CONCERNING MOTOR VEHICLE PROTECTION
PRODUCTS.
SUMMARY
This bill specifies that a contract or agreement providing an extended
warranty or vehicle theft protection product warranty does not
constitute engaging in the business of insurance in the state. Thus, it
exempts these warranties from general insurance requirements.
The bill expands the definition of extended warranty to include
contracts or agreements that warranty specified motor vehicle damages
(e.g., tire damage from pot holes, dents and dings, and key fob
replacement). It defines a “vehicle theft protection product” as any
device or system installed on or applied to a covered motor vehicle that
is designed to prevent loss or damage from theft and that includes a
vehicle theft protection product warranty (i.e. a contract obligating a
warrantor to pay for specified incidental costs resulting from a vehicle
theft protection product’s failure to work as contracted).
Lastly, the bill subjects extended warranty providers and vehicle theft
protection product warrantors to a $1,500 filing fee payable to the
insurance commissioner. The $1,500 fee applies when filing a rate filing;
a merger, acquisition, or change of control filing; or both. This
requirement is unclear as it does not appear that an extended warranty
provider must file these things with the commissioner. (By law, an
extended warranty provider must submit to the commissioner a copy of
(1) its extended warranty form and (2) the required extended warranty
reimbursement insurance policy issued by an insurer authorized to do
business in Connecticut or a certified public accountant’s certification
that attests to the adequacy of the warranty provider’s claim reserves
(CGS § 42-260(e)).) Further, the bill does not appear to require a vehicle
theft protection product warrantor to submit anything to the 2025SB-01425-R000438-BA.DOCX
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commissioner.
By law, any violation of the extended warranty statute by an
extended warranty provider is a violation of the Connecticut Unfair
Insurance Practices Act (CGS § 38a-816(17)).
EFFECTIVE DATE: October 1, 2025
EXTENDED WARRANTY
Expanded Definition
By law, an “extended warranty” is a contract to repair, replace, or
maintain a product, or indemnify a person for related costs, due to a
product failure or defect. The cost of the warranty must not be included
in the product’s lease or purchase price. The bill expands this definition
to include the following:
1. repairing or replacing motor vehicle tires or wheels damaged due
to road hazards, including pot holes and other specified debris;
2. removing dents, dings, or creases on a motor vehicle using
paintless dent removal without impacting the finish, replacing
the vehicle body, sanding, bonding, or painting;
3. repairing chips or cracks in a windshield due to road hazards;
4. replacing a motor vehicle key or key fob due to theft,
inoperability, or loss; and
5. for vehicles leased for personal use, repairing, replacing, or
maintaining items due to excess wear and use, including tires;
paint; cracks or chips; interior stains, rips, or scratches; exterior
dents or scratches; windshield cracks or chips; missing parts; or
excess mileage resulting in a lease charge, as long as the charge
does not exceed the vehicle’s purchase price.
BACKGROUND
Connecticut Unfair Insurance Practices Act
The law prohibits engaging in unfair or deceptive acts or practices in 2025SB-01425-R000438-BA.DOCX
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the business of insurance. It authorizes the insurance commissioner to
conduct investigations and hearings, issue cease and desist orders,
impose fines, revoke or suspend licenses, and order restitution for per
se violations (i.e. violations specifically listed in statute). The law also
allows the commissioner to ask the attorney general to seek injunctive
relief in Superior Court if he believes someone is engaging in other
unfair or deceptive acts not specifically defined in statute.
Fines may be up to (1) $5,000 per violation to a $50,000 maximum or
(2) $25,000 per violation to a $250,000 maximum in any six-month period
if the violation was knowingly committed. The law also imposes a fine
of up to $50,000, in addition to or in lieu of a license suspension or
revocation, for violating a cease and desist order (CGS §§ 38a-815 to -
819).
COMMITTEE ACTION
Insurance and Real Estate Committee
Joint Favorable Substitute
Yea 12 Nay 1 (03/13/2025)