| 10 | 10 | | F L O R I D A H O U S E O F R E P R E S E N T A T I V E S |
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| 11 | 11 | | |
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| 12 | 12 | | |
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| 13 | 13 | | |
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| 14 | 14 | | A bill to be entitled 1 |
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| 15 | 15 | | An act relating to asset protection products; amending 2 |
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| 16 | 16 | | s. 520.02, F.S.; revising the definition of the term 3 |
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| 17 | 17 | | "guaranteed asset protection product"; amending s. 4 |
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| 18 | 18 | | 520.07, F.S.; prohibiting certain entities from 5 |
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| 19 | 19 | | deducting more than a specified amount in 6 |
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| 20 | 20 | | administrative fees when providing a refund of a 7 |
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| 21 | 21 | | guaranteed asset protection product; authorizing 8 |
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| 22 | 22 | | guaranteed asset protection products to be cancelable 9 |
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| 23 | 23 | | or noncancelable under certain circumstances; 10 |
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| 24 | 24 | | authorizing certain entities to pay refunds directly 11 |
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| 25 | 25 | | to the holder or administrator of a loan under certain 12 |
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| 26 | 26 | | circumstances; creating s. 520.151, F.S.; providing a 13 |
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| 27 | 27 | | short title; creating s. 520.152, F.S.; providing 14 |
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| 28 | 28 | | definitions; creating s. 520.153, F.S.; authorizing 15 |
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| 29 | 29 | | the offer, sale, or gift of vehicle value protection 16 |
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| 30 | 30 | | agreements in compliance with a certain act; 17 |
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| 31 | 31 | | specifying a requirement regarding the amount charged 18 |
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| 32 | 32 | | or financed for a vehicle value protection agreement; 19 |
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| 33 | 33 | | prohibiting the conditioning of credit offers or terms 20 |
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| 34 | 34 | | for the sale or lease of a motor vehicle upon a 21 |
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| 35 | 35 | | consumer's payment for or financing of any charge for 22 |
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| 36 | 36 | | a vehicle value protection agreement; authorizing 23 |
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| 37 | 37 | | discounting or giving the vehicle value protection 24 |
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| 38 | 38 | | agreement at no charge under certain circumstances; 25 |
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| 39 | 39 | | |
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| 47 | 47 | | F L O R I D A H O U S E O F R E P R E S E N T A T I V E S |
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| 48 | 48 | | |
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| 49 | 49 | | |
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| 50 | 50 | | |
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| 51 | 51 | | authorizing providers to use an administrator or othe r 26 |
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| 52 | 52 | | designee for administration of vehicle value 27 |
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| 53 | 53 | | protection agreements; prohibiting vehicle value 28 |
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| 54 | 54 | | protection agreements from being sold under certain 29 |
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| 55 | 55 | | circumstances; specifying financial security 30 |
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| 56 | 56 | | requirements for providers; prohibiting additional 31 |
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| 57 | 57 | | financial security requirements from being imposed on 32 |
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| 58 | 58 | | providers; creating s. 520.154, F.S.; requiring 33 |
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| 59 | 59 | | vehicle value protection agreements to include certain 34 |
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| 60 | 60 | | written disclosures in clear and understandable 35 |
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| 61 | 61 | | language; requiring vehicle value protection 36 |
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| 62 | 62 | | agreements to state the terms, restrictions, or 37 |
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| 63 | 63 | | conditions governing cancellation by the provider or 38 |
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| 64 | 64 | | the contract holder; specifying requirements for 39 |
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| 65 | 65 | | notice by the provider, refund of fees, and deduction 40 |
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| 66 | 66 | | of fees if the agreement is canceled; creating s. 41 |
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| 67 | 67 | | 520.155, F.S.; provi ding an exemption for vehicle 42 |
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| 68 | 68 | | value protection agreements in connection with a 43 |
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| 69 | 69 | | commercial transaction; creating s. 520.156, F.S.; 44 |
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| 70 | 70 | | providing noncriminal penalties; defining the term 45 |
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| 71 | 71 | | "violations of a similar nature"; creating s. 520.157, 46 |
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| 72 | 72 | | F.S.; defining the t erm "excess wear and use waiver"; 47 |
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| 88 | | - | lease on his or her payment for any excess wear and 51 |
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| 89 | | - | use waiver; authorizing discounting or giving the 52 |
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| 90 | | - | excess wear and use waiver at no charge under certain 53 |
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| 91 | | - | circumstances; requiring certain disclosures for a 54 |
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| 92 | | - | lease agreement that includes an excess wear and use 55 |
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| 93 | | - | waiver; providing construction; providing an effective 56 |
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| 94 | | - | date. 57 |
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| 95 | | - | 58 |
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| 96 | | - | Be It Enacted by the Legislature of the State of Florida: 59 |
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| 97 | | - | 60 |
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| 98 | | - | Section 1. Subsection (7) of section 520.02, Florida 61 |
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| 99 | | - | Statutes, is amended to read: 62 |
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| 100 | | - | 520.02 Definitions.—In this act, unless the context or 63 |
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| 101 | | - | subject matter otherwise requires: 64 |
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| 102 | | - | (7) "Guaranteed asset protection product" means a loan, 65 |
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| 103 | | - | lease, or retail installment contract term, or modification or 66 |
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| 104 | | - | addendum to a loan, lease, or retail installm ent contract, under 67 |
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| 105 | | - | which a creditor agrees with or without a separate charge, to 68 |
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| 106 | | - | cancel or waive a customer's liability for payment of some or 69 |
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| 107 | | - | all of the amount by which the debt exceeds the value of the 70 |
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| 108 | | - | collateral that has incurred total physical damage or is the 71 |
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| 109 | | - | subject of an unrecovered theft . A guaranteed asset protection 72 |
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| 110 | | - | product may also provide, with or without a separate charge, a 73 |
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| 111 | | - | benefit that waives a portion of, or provides a customer with a 74 |
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| 112 | | - | credit towards, the purchase of a replacement motor vehi cle. 75 |
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| 88 | + | 51 |
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| 89 | + | Section 1. Subsection (7) of section 520.02, Florida 52 |
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| 90 | + | Statutes, is amended to read: 53 |
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| 91 | + | 520.02 Definitions. —In this act, unless the context or 54 |
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| 92 | + | subject matter otherwise requires: 55 |
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| 93 | + | (7) "Guaranteed asset protection product" means a loan, 56 |
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| 94 | + | lease, or retail installment contract term, or modification or 57 |
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| 95 | + | addendum to a loan, lease, or retail installment contract, under 58 |
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| 96 | + | which a creditor agr ees with or without a separate charge, to 59 |
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| 97 | + | cancel or waive a customer's liability for payment of some or 60 |
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| 98 | + | all of the amount by which the debt exceeds the value of the 61 |
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| 99 | + | collateral that has incurred total physical damage or is the 62 |
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| 100 | + | subject of an unrecovered thef t. A guaranteed asset protection 63 |
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| 101 | + | product may also provide, with or without a separate charge, a 64 |
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| 102 | + | benefit that waives a portion of, or provides a customer with a 65 |
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| 103 | + | credit towards, the purchase of a replacement motor vehicle . 66 |
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| 104 | + | Such a product is not insurance for purposes of the Florida 67 |
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| 105 | + | Insurance Code. This subsection also applies to all guaranteed 68 |
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| 106 | + | asset protection products issued before October 1, 2008. 69 |
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| 107 | + | Section 2. Paragraph (g) of subsection (11) of section 70 |
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| 108 | + | 520.07, Florida Statutes, is amended, and paragraphs (h) and (i) 71 |
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| 109 | + | are added to that subsection, to read: 72 |
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| 110 | + | 520.07 Requirements and prohibitions as to retail 73 |
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| 111 | + | installment contracts. — 74 |
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| 112 | + | (11) In conjunction with entering into any new retail 75 |
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| 125 | | - | Such a product is not insurance for purposes of the Florida 76 |
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| 126 | | - | Insurance Code. This subsection also applies to all guaranteed 77 |
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| 127 | | - | asset protection products issued before October 1, 2008. 78 |
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| 128 | | - | Section 2. Paragraph (g) of subsection (11) of section 79 |
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| 129 | | - | 520.07, Florida Statutes, is amended, and paragraphs (h) and (i) 80 |
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| 130 | | - | are added to that subsection, to read: 81 |
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| 131 | | - | 520.07 Requirements and prohibitions as to retail 82 |
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| 132 | | - | installment contracts. — 83 |
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| 133 | | - | (11) In conjunction with entering into any new retail 84 |
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| 134 | | - | installment contract or contract for a loan, a motor vehicle 85 |
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| 135 | | - | retail installment seller as defined in s. 520.02, a sales 86 |
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| 136 | | - | finance company as defined in s. 520.02, or a retail lessor as 87 |
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| 137 | | - | defined in s. 521.003, and any assignee of such an entity, may 88 |
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| 138 | | - | offer, for a fee or otherwise, optional gu aranteed asset 89 |
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| 139 | | - | protection products in accordance with this chapter. The motor 90 |
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| 140 | | - | vehicle retail installment seller, sales finance company, retail 91 |
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| 141 | | - | lessor, or assignee may not require the purchase of a guaranteed 92 |
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| 142 | | - | asset protection product as a condition for maki ng the loan. In 93 |
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| 143 | | - | order to offer any guaranteed asset protection product, a motor 94 |
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| 144 | | - | vehicle retail installment seller, sales finance company, or 95 |
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| 145 | | - | retail lessor, and any assignee of such an entity, shall comply 96 |
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| 146 | | - | with the following: 97 |
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| 147 | | - | (g) If a contract for a guara nteed asset protection 98 |
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| 148 | | - | product is terminated, the entity shall refund to the buyer all 99 |
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| 149 | | - | any unearned portions of the purchase price of fees paid for the 100 |
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| 125 | + | installment contract or contract for a loan, a motor vehicle 76 |
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| 126 | + | retail installment seller as defined in s. 520.02, a sales 77 |
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| 127 | + | finance company as defined in s. 520.02, or a retail lessor as 78 |
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| 128 | + | defined in s. 521.003, and any assignee of such an entity, may 79 |
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| 129 | + | offer, for a fee or otherwise, optional guaranteed asset 80 |
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| 130 | + | protection products in ac cordance with this chapter. The motor 81 |
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| 131 | + | vehicle retail installment seller, sales finance company, retail 82 |
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| 132 | + | lessor, or assignee may not require the purchase of a guaranteed 83 |
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| 133 | + | asset protection product as a condition for making the loan. In 84 |
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| 134 | + | order to offer any guara nteed asset protection product, a motor 85 |
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| 135 | + | vehicle retail installment seller, sales finance company, or 86 |
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| 136 | + | retail lessor, and any assignee of such an entity, shall comply 87 |
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| 137 | + | with the following: 88 |
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| 138 | + | (g) If a contract for a guaranteed asset protection 89 |
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| 139 | + | product is terminated, the entity shall refund to the buyer any 90 |
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| 140 | + | unearned fees paid for the contract unless the contract provides 91 |
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| 141 | + | otherwise. A refund is not due to a consumer who receives a 92 |
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| 142 | + | benefit under such product. In order to receive a refund, the 93 |
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| 143 | + | buyer must notify the entity of the event terminating the 94 |
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| 144 | + | contract and request a refund within 90 days after the 95 |
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| 145 | + | occurrence of the event terminating the contract. An entity may 96 |
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| 146 | + | offer a buyer a contract that does not provide for a refund only 97 |
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| 147 | + | if the entity also offers that buyer a bona fide option to 98 |
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| 148 | + | purchase a comparable contract that provides for a refund. An 99 |
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| 149 | + | entity may not deduct more than $75 in administrative fees from 100 |
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| 162 | | - | contract unless the contract provides otherwise. A refund is not 101 |
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| 163 | | - | due to a consumer who receives a benefi t under such product. In 102 |
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| 164 | | - | order to receive a refund, the buyer must notify the entity of 103 |
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| 165 | | - | the event terminating the contract and request a refund within 104 |
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| 166 | | - | 90 days after the occurrence of the event terminating the 105 |
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| 167 | | - | contract. An entity may offer a buyer a contrac t that does not 106 |
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| 168 | | - | provide for a refund only if the entity also offers that buyer a 107 |
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| 169 | | - | bona fide option to purchase a comparable contract that provides 108 |
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| 170 | | - | for a refund. An entity may not deduct more than $75 in 109 |
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| 171 | | - | administrative fees from a refund made under this subs ection. 110 |
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| 172 | | - | (h) Guaranteed asset protection products may be cancelable 111 |
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| 173 | | - | or noncancelable after a free -look period as defined in s. 112 |
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| 174 | | - | 520.152. 113 |
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| 175 | | - | (i) If the termination of the guaranteed asset protection 114 |
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| 176 | | - | product occurs because of a default under the retail instal lment 115 |
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| 177 | | - | contract or contract for a loan, the repossession of the motor 116 |
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| 178 | | - | vehicle associated with the retail installment contract or 117 |
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| 179 | | - | contract for a loan, or any other termination of the retail 118 |
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| 180 | | - | installment contract or contract for a loan, the entity may pay 119 |
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| 181 | | - | any refund due directly to the holder or administrator and apply 120 |
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| 182 | | - | the refund as a reduction of the amount owed under the retail 121 |
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| 183 | | - | installment contract or contract for a loan, unless the buyer 122 |
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| 184 | | - | can show that the retail installment contract has been paid in 123 |
|---|
| 185 | | - | full. 124 |
|---|
| 186 | | - | Section 3. Section 520.151, Florida Statutes, is created 125 |
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| 162 | + | a refund made under this subsection . 101 |
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| 163 | + | (h) Guaranteed asset protection products may be cancelable 102 |
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| 164 | + | or noncancelable after a free -look period as defined in s. 103 |
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| 165 | + | 520.152. 104 |
|---|
| 166 | + | (i) If the termination of the guaranteed asset protection 105 |
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| 167 | + | product occurs because of a default under the retail installment 106 |
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| 168 | + | contract or contract for a loan, the repossession of the motor 107 |
|---|
| 169 | + | vehicle associated with the retail installment contract or 108 |
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| 170 | + | contract for a loan, or any other termination of the retail 109 |
|---|
| 171 | + | installment contract or contract for a loan, the entity may pay 110 |
|---|
| 172 | + | any refund due directly to the holder or administrator and apply 111 |
|---|
| 173 | + | the refund as a reduction of the amount owed under the retail 112 |
|---|
| 174 | + | installment contract or contract for a loan, unless the buyer 113 |
|---|
| 175 | + | can show that the retail installment contract has been paid in 114 |
|---|
| 176 | + | full. 115 |
|---|
| 177 | + | Section 3. Section 520.151, Florida Statutes, is created 116 |
|---|
| 178 | + | to read: 117 |
|---|
| 179 | + | 520.151 Florida Vehicle Value Protection Agreements Act. —118 |
|---|
| 180 | + | Sections 520.151-520.156 may be cited as the "Florida Vehicle 119 |
|---|
| 181 | + | Value Protection Agreements Act." 120 |
|---|
| 182 | + | Section 4. Section 520.152, Florida Statutes, is created 121 |
|---|
| 183 | + | to read: 122 |
|---|
| 184 | + | 520.152 Definitions. —As used in ss. 520.151-520.156, 123 |
|---|
| 185 | + | unless the context or subject matter otherwise requires, the 124 |
|---|
| 186 | + | term: 125 |
|---|
| 199 | | - | to read: 126 |
|---|
| 200 | | - | 520.151 Florida Vehicle Value Protection Agreements Act. —127 |
|---|
| 201 | | - | Sections 520.151-520.156 may be cited as the "Florida Vehicle 128 |
|---|
| 202 | | - | Value Protection Agreements Act." 129 |
|---|
| 203 | | - | Section 4. Section 520.152, F lorida Statutes, is created 130 |
|---|
| 204 | | - | to read: 131 |
|---|
| 205 | | - | 520.152 Definitions. —As used in ss. 520.151 -520.156, 132 |
|---|
| 206 | | - | unless the context or subject matter otherwise requires, the 133 |
|---|
| 207 | | - | term: 134 |
|---|
| 208 | | - | (1) "Administrator" means the person who is responsible 135 |
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| 209 | | - | for the administrative or operational function of managing 136 |
|---|
| 210 | | - | vehicle value protection agreements, including, but not limited 137 |
|---|
| 211 | | - | to, the adjudication of claims or benefit requests by contract 138 |
|---|
| 212 | | - | holders. 139 |
|---|
| 213 | | - | (2) "Commercial transaction" means a transaction in which 140 |
|---|
| 214 | | - | the motor vehicle subject to the transaction is used primarily 141 |
|---|
| 215 | | - | for business or commercial purposes. 142 |
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| 216 | | - | (3) "Contract holder" means a person who is the purchaser 143 |
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| 217 | | - | or holder of a vehicle value protection agreement. 144 |
|---|
| 218 | | - | (4) "Finance agreement" means a loan, retail installment 145 |
|---|
| 219 | | - | sales contract, or lease for the purchase, refinancing, or lease 146 |
|---|
| 220 | | - | of a motor vehicle. 147 |
|---|
| 221 | | - | (5) "Free-look period" means the period of time, 148 |
|---|
| 222 | | - | commencing on the effective date of the contract, during which 149 |
|---|
| 223 | | - | the buyer may cancel the contract for a full refund of the 150 |
|---|
| 199 | + | (1) "Administrator" means the person who is responsible 126 |
|---|
| 200 | + | for the administrative or operational function of managing 127 |
|---|
| 201 | + | vehicle value protection agreements, including, but not limited 128 |
|---|
| 202 | + | to, the adjudication of claims or benefit requests by contract 129 |
|---|
| 203 | + | holders. 130 |
|---|
| 204 | + | (2) "Commercial transaction" means a transaction in which 131 |
|---|
| 205 | + | the motor vehicle subject to the transaction is used primarily 132 |
|---|
| 206 | + | for business or commercial purposes. 133 |
|---|
| 207 | + | (3) "Contract holder" means a person who is the purchaser 134 |
|---|
| 208 | + | or holder of a vehicle value protection agreement. 135 |
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| 209 | + | (4) "Finance agreement" means a loan, retail installment 136 |
|---|
| 210 | + | sales contract, or lease for the purchase, refinancing, or lease 137 |
|---|
| 211 | + | of a motor vehicle. 138 |
|---|
| 212 | + | (5) "Free-look period" means the period of time, 139 |
|---|
| 213 | + | commencing on the effective date of the contract, during which 140 |
|---|
| 214 | + | the buyer may cancel the contract for a full refund of the 141 |
|---|
| 215 | + | purchase price. This period may not be shorter than 30 days. 142 |
|---|
| 216 | + | (6) "Motor vehicle" has the same mean ing as provided in s. 143 |
|---|
| 217 | + | 520.02. 144 |
|---|
| 218 | + | (7) "Provider" means a person that is obligated to provide 145 |
|---|
| 219 | + | a benefit under a vehicle value protection agreement. A provider 146 |
|---|
| 220 | + | may function as an administrator or retain the services of a 147 |
|---|
| 221 | + | third-party administrator. 148 |
|---|
| 222 | + | (8) "Vehicle value protection agreement" includes a 149 |
|---|
| 223 | + | contractual agreement that provides a benefit toward either the 150 |
|---|
| 236 | | - | purchase price. This period may not be shorter than 30 days. 151 |
|---|
| 237 | | - | (6) "Motor vehicle" has the same meaning as provided in s. 152 |
|---|
| 238 | | - | 520.02. 153 |
|---|
| 239 | | - | (7) "Provider" means a person that is obligated to provide 154 |
|---|
| 240 | | - | a benefit under a vehicle value protection agreeme nt. A provider 155 |
|---|
| 241 | | - | may function as an administrator or retain the services of a 156 |
|---|
| 242 | | - | third-party administrator. 157 |
|---|
| 243 | | - | (8) "Vehicle value protection agreement" includes a 158 |
|---|
| 244 | | - | contractual agreement that provides a benefit toward either the 159 |
|---|
| 245 | | - | reduction of some or all of the con tract holder's current 160 |
|---|
| 246 | | - | finance agreement deficiency balance or the purchase or lease of 161 |
|---|
| 247 | | - | a replacement motor vehicle or motor vehicle services upon the 162 |
|---|
| 248 | | - | occurrence of an adverse event to the motor vehicle, including, 163 |
|---|
| 249 | | - | but not limited to, loss, theft, damage, obsolescence, 164 |
|---|
| 250 | | - | diminished value, or depreciation. The term does not include 165 |
|---|
| 251 | | - | guaranteed asset protection products as defined in s. 520.02. 166 |
|---|
| 252 | | - | Such a product is not insurance for purposes of the Florida 167 |
|---|
| 253 | | - | Insurance Code. 168 |
|---|
| 254 | | - | Section 5. Section 520.153, Florida Sta tutes, is created 169 |
|---|
| 255 | | - | to read: 170 |
|---|
| 256 | | - | 520.153 Requirements and prohibitions as to vehicle value 171 |
|---|
| 257 | | - | protection agreements. — 172 |
|---|
| 258 | | - | (1) Vehicle value protection agreements may be offered, 173 |
|---|
| 259 | | - | sold, or given to consumers in this state in compliance with 174 |
|---|
| 260 | | - | this act. 175 |
|---|
| 236 | + | reduction of some or all of the contract holder's current 151 |
|---|
| 237 | + | finance agreement deficiency balance or the purchase or lease of 152 |
|---|
| 238 | + | a replacement motor vehicle or motor vehicle services upon the 153 |
|---|
| 239 | + | occurrence of an adverse event to the motor vehicle, including, 154 |
|---|
| 240 | + | but not limited to, loss, theft, damage, obsolescence, 155 |
|---|
| 241 | + | diminished value, or depreciation. The term does not include 156 |
|---|
| 242 | + | guaranteed asset protection products as defined in s. 520.02. 157 |
|---|
| 243 | + | Such a product is not insurance for the purposes of the Florida 158 |
|---|
| 244 | + | Insurance Code. 159 |
|---|
| 245 | + | Section 5. Section 520.153, Florida Statutes, is created 160 |
|---|
| 246 | + | to read: 161 |
|---|
| 247 | + | 520.153 Requirements and prohibitions as to vehicle value 162 |
|---|
| 248 | + | protection agreements. — 163 |
|---|
| 249 | + | (1) Vehicle value protection agreements may be offered, 164 |
|---|
| 250 | + | sold, or given to consumers in this state in compliance with 165 |
|---|
| 251 | + | this act. 166 |
|---|
| 252 | + | (2) Notwithstanding any other law, any amount charged or 167 |
|---|
| 253 | + | financed for a vehicle value protection agreement is not 168 |
|---|
| 254 | + | considered a finance charge or interest and must be separately 169 |
|---|
| 255 | + | stated in the finance agreement and in the vehicle value 170 |
|---|
| 256 | + | protection agreement. 171 |
|---|
| 257 | + | (3) The extension of credit, the terms of credit, or the 172 |
|---|
| 258 | + | terms of the related motor vehicle sale or lease may not be 173 |
|---|
| 259 | + | conditioned upon the consumer's payment for or financing of any 174 |
|---|
| 260 | + | charge for a vehicle value protection agreement. However, a 175 |
|---|
| 273 | | - | (2) Notwithstanding any other law, any amount charged or 176 |
|---|
| 274 | | - | financed for a vehicle value protection agreement is not 177 |
|---|
| 275 | | - | considered a finance charge or interest and must be separately 178 |
|---|
| 276 | | - | stated in the finance agreement and in the vehicle value 179 |
|---|
| 277 | | - | protection agreement. 180 |
|---|
| 278 | | - | (3) The extension of credit, the terms of credit, or the 181 |
|---|
| 279 | | - | terms of the related motor vehicle sale or lease may not be 182 |
|---|
| 280 | | - | conditioned upon the consumer's payment for or financing of any 183 |
|---|
| 281 | | - | charge for a vehicle value protection agreement. However, a 184 |
|---|
| 282 | | - | vehicle value protection ag reement may be discounted or given at 185 |
|---|
| 283 | | - | no charge in connection with the purchase of other noncredit 186 |
|---|
| 284 | | - | related goods or services. 187 |
|---|
| 285 | | - | (4) A provider may use an administrator or other designee 188 |
|---|
| 286 | | - | to administer a vehicle value protection agreement. 189 |
|---|
| 287 | | - | (5) A vehicle value protection agreement may not be sold 190 |
|---|
| 288 | | - | or given to any person unless he or she has been or will be 191 |
|---|
| 289 | | - | provided access to a copy of such vehicle value protection 192 |
|---|
| 290 | | - | agreement at a reasonable time after such vehicle value 193 |
|---|
| 291 | | - | protection agreement is sold or given. 194 |
|---|
| 292 | | - | (6) A vehicle value protection agreement may not be sold 195 |
|---|
| 293 | | - | or given if coverage is duplicative of another vehicle value 196 |
|---|
| 294 | | - | protection agreement sold or given to a person or duplicative of 197 |
|---|
| 295 | | - | a guaranteed asset protection product. 198 |
|---|
| 296 | | - | (7) Each provider shall do one of the following: 199 |
|---|
| 297 | | - | (a) Insure all of its vehicle value protection agreements 200 |
|---|
| 273 | + | vehicle value protection agreement may be discounted or given at 176 |
|---|
| 274 | + | no charge in connection with the purchase of other noncredit 177 |
|---|
| 275 | + | related goods or services. 178 |
|---|
| 276 | + | (4) A provider may use an administrator or other designee 179 |
|---|
| 277 | + | to administer a vehicle value protection agreement. 180 |
|---|
| 278 | + | (5) A vehicle value protection agreement may not be sold 181 |
|---|
| 279 | + | or given to any person unless he or she has been or will be 182 |
|---|
| 280 | + | provided access to a copy of such vehicle value protection 183 |
|---|
| 281 | + | agreement at a reasonable time after such vehicle value 184 |
|---|
| 282 | + | protection agreement is sold or given. 185 |
|---|
| 283 | + | (6) A vehicle value protection agreement may not be sold 186 |
|---|
| 284 | + | or given if coverage is duplicative of another vehicl e value 187 |
|---|
| 285 | + | protection agreement sold or given to a person or duplicative of 188 |
|---|
| 286 | + | a guaranteed asset protection product. 189 |
|---|
| 287 | + | (7) Each provider shall do one of the following: 190 |
|---|
| 288 | + | (a) Insure all of its vehicle value protection agreements 191 |
|---|
| 289 | + | under a policy that pays or reimb urses the contract holder in 192 |
|---|
| 290 | + | the event the provider fails to perform its obligations under 193 |
|---|
| 291 | + | the vehicle value protection agreement. The insurer must be 194 |
|---|
| 292 | + | licensed or otherwise authorized or eligible to do business in 195 |
|---|
| 293 | + | this state; 196 |
|---|
| 294 | + | (b) Maintain a funded reserv e account for its obligations 197 |
|---|
| 295 | + | under its contracts issued and outstanding in this state. The 198 |
|---|
| 296 | + | reserves may not be less than 40 percent of gross consideration 199 |
|---|
| 297 | + | received, less claims paid, on the sale of the vehicle value 200 |
|---|
| 310 | | - | under a policy that pays or reimburses the contract holder in 201 |
|---|
| 311 | | - | the event the provider fails to perform its obligations under 202 |
|---|
| 312 | | - | the vehicle value protection agreement. The insurer mu st be 203 |
|---|
| 313 | | - | licensed or otherwise authorized or eligible to do business in 204 |
|---|
| 314 | | - | this state. 205 |
|---|
| 315 | | - | (b) Maintain a funded reserve account for its obligations 206 |
|---|
| 316 | | - | under its contracts issued and outstanding in this state. The 207 |
|---|
| 317 | | - | reserves may not be less than 40 percent of gross con sideration 208 |
|---|
| 318 | | - | received, less claims paid, on the sale of the vehicle value 209 |
|---|
| 319 | | - | protection agreement for all in -force contracts in this state. 210 |
|---|
| 320 | | - | The reserve must be placed in trust with the office and have a 211 |
|---|
| 321 | | - | financial security deposit valued at not less than 5 perce nt of 212 |
|---|
| 322 | | - | the gross consideration received, less claims paid, on the sale 213 |
|---|
| 323 | | - | of the vehicle value protection agreements for all vehicle value 214 |
|---|
| 324 | | - | protection agreements issued and in force in this state, but at 215 |
|---|
| 325 | | - | least $25,000. The reserve account must consist of one of the 216 |
|---|
| 326 | | - | following: 217 |
|---|
| 327 | | - | 1. A surety bond issued by an authorized surety. 218 |
|---|
| 328 | | - | 2. Securities of the type eligible for deposit by insurers 219 |
|---|
| 329 | | - | as provided in s. 625.52. 220 |
|---|
| 330 | | - | 3. Cash. 221 |
|---|
| 331 | | - | 4. A letter of credit issued by a qualified financial 222 |
|---|
| 332 | | - | institution. 223 |
|---|
| 333 | | - | (c) Maintain, or together with its parent corporation 224 |
|---|
| 334 | | - | maintain, a net worth or stockholders' equity of $100 million 225 |
|---|
| 310 | + | protection agreement for all in -force contracts in this state. 201 |
|---|
| 311 | + | The reserve must be placed in trust with the office and have a 202 |
|---|
| 312 | + | financial security deposit valued at not less than 5 percent of 203 |
|---|
| 313 | + | the gross consideration received, less claims paid, on the sale 204 |
|---|
| 314 | + | of the vehicle value protection agreement s for all vehicle value 205 |
|---|
| 315 | + | protection agreements issued and in force in this state, but at 206 |
|---|
| 316 | + | least $25,000. The reserve account must consist of one of the 207 |
|---|
| 317 | + | following: 208 |
|---|
| 318 | + | 1. A surety bond issued by an authorized surety; 209 |
|---|
| 319 | + | 2. Securities of the type eligible for dep osit by insurers 210 |
|---|
| 320 | + | as provided in s. 625.52; 211 |
|---|
| 321 | + | 3. Cash; or 212 |
|---|
| 322 | + | 4. A letter of credit issued by a qualified financial 213 |
|---|
| 323 | + | institution; or 214 |
|---|
| 324 | + | (c) Maintain, or together with its parent corporation 215 |
|---|
| 325 | + | maintain, a net worth or stockholders' equity of $100 million 216 |
|---|
| 326 | + | and, upon request, provide the office with a copy of the 217 |
|---|
| 327 | + | provider's or the provider's parent company's Form 10 -K or Form 218 |
|---|
| 328 | + | 20-F filed with the Securities and Exchange Commission within 219 |
|---|
| 329 | + | the last calendar year, or if the company does not file with the 220 |
|---|
| 330 | + | Securities and Exchange Commission, a copy of the company's 221 |
|---|
| 331 | + | audited financial statements, which must show a net worth of the 222 |
|---|
| 332 | + | provider or its parent company of at least $100 million. If the 223 |
|---|
| 333 | + | provider's parent company's Form 10 -K, Form 20-F, or financial 224 |
|---|
| 334 | + | statements are filed to meet the provider's financial security 225 |
|---|
| 347 | | - | and, upon request, provide the office with a copy of the 226 |
|---|
| 348 | | - | provider's or the provider's parent company's Form 10 -K or Form 227 |
|---|
| 349 | | - | 20-F filed with the Securities and Exchange Commission within 228 |
|---|
| 350 | | - | the last calendar year, or if the company does not file with the 229 |
|---|
| 351 | | - | Securities and Exchange Commission, a copy of the company's 230 |
|---|
| 352 | | - | audited financial statements, which must show a net worth of the 231 |
|---|
| 353 | | - | provider or its parent company of at least $100 million. If the 232 |
|---|
| 354 | | - | provider's parent company's Form 10 -K, Form 20-F, or financial 233 |
|---|
| 355 | | - | statements are filed to meet the provider's financial security 234 |
|---|
| 356 | | - | requirement, the parent company must agree to guarantee the 235 |
|---|
| 357 | | - | obligations of the provider relating to vehicle value protection 236 |
|---|
| 358 | | - | agreements sold by the provider in this state. 237 |
|---|
| 359 | | - | (8) A financial security requirement other than those 238 |
|---|
| 360 | | - | imposed in subsection (7) may not be imposed on vehicle value 239 |
|---|
| 361 | | - | protection agreement providers. 240 |
|---|
| 362 | | - | Section 6. Section 520.154, Florida Statutes, is created 241 |
|---|
| 363 | | - | to read: 242 |
|---|
| 364 | | - | 520.154 Disclosures. — 243 |
|---|
| 365 | | - | (1) A vehicle value protection agreement must disclose in 244 |
|---|
| 366 | | - | writing, in clear, understandable language, all of the 245 |
|---|
| 367 | | - | following: 246 |
|---|
| 368 | | - | (a) The name and address of the provider, contract holde r, 247 |
|---|
| 369 | | - | and administrator, if any. 248 |
|---|
| 370 | | - | (b) The terms of the vehicle value protection agreement, 249 |
|---|
| 371 | | - | including, but not limited to, the purchase price to be paid by 250 |
|---|
| 347 | + | requirement, the parent company must agree to guarantee the 226 |
|---|
| 348 | + | obligations of the provider relating to vehicle value protection 227 |
|---|
| 349 | + | agreements sold by the provider in this state. 228 |
|---|
| 350 | + | (8) A financial security requirement other than those 229 |
|---|
| 351 | + | imposed in subsection (7) may not be imposed on vehicle value 230 |
|---|
| 352 | + | protection agreement providers. 231 |
|---|
| 353 | + | Section 6. Section 520.154, Florida Statutes, is created 232 |
|---|
| 354 | + | to read: 233 |
|---|
| 355 | + | 520.154 Disclosures. — 234 |
|---|
| 356 | + | (1) A vehicle value protection agreement must dis close in 235 |
|---|
| 357 | + | writing, in clear, understandable language, all of the 236 |
|---|
| 358 | + | following: 237 |
|---|
| 359 | + | (a) The name and address of the provider, contract holder, 238 |
|---|
| 360 | + | and administrator, if any. 239 |
|---|
| 361 | + | (b) The terms of the vehicle value protection agreement, 240 |
|---|
| 362 | + | including, but not limited to, the purchase price to be paid by 241 |
|---|
| 363 | + | the contract holder, if any, the requirements for eligibility 242 |
|---|
| 364 | + | and conditions of coverage, and any exclusions. 243 |
|---|
| 365 | + | (c) Whether the vehicle value protection agreement may be 244 |
|---|
| 366 | + | canceled by the contract holder during a free -look period as 245 |
|---|
| 367 | + | defined in s. 520.152, and that, in the event of cancellation, 246 |
|---|
| 368 | + | the contract holder is entitled to a full refund of the purchase 247 |
|---|
| 369 | + | price, if any, so long as no benefits have been provided. 248 |
|---|
| 370 | + | (d) The procedure the contract holder must follow, if any, 249 |
|---|
| 371 | + | to obtain a benefit under the terms and conditions of the 250 |
|---|
| 384 | | - | the contract holder, if any, the requirements for eligibility 251 |
|---|
| 385 | | - | and conditions of coverage, and any exclusions. 252 |
|---|
| 386 | | - | (c) Whether the vehicle value protection agreement may be 253 |
|---|
| 387 | | - | canceled by the contract holder during a free -look period as 254 |
|---|
| 388 | | - | defined in s. 520.152, and that, in the event of cancellation, 255 |
|---|
| 389 | | - | the contract holder is entitled to a full refund of the purc hase 256 |
|---|
| 390 | | - | price, if any, so long as no benefits have been provided. 257 |
|---|
| 391 | | - | (d) The procedure the contract holder must follow, if any, 258 |
|---|
| 392 | | - | to obtain a benefit under the terms and conditions of the 259 |
|---|
| 393 | | - | vehicle value protection agreement, including, if applicable, a 260 |
|---|
| 394 | | - | telephone number, website, or mailing address where the contract 261 |
|---|
| 395 | | - | holder may apply for a benefit. 262 |
|---|
| 396 | | - | (e) Whether the vehicle value protection agreement is 263 |
|---|
| 397 | | - | cancelable after the free -look period and the conditions under 264 |
|---|
| 398 | | - | which it may be canceled, including the procedures for 265 |
|---|
| 399 | | - | requesting any refund of the unearned purchase price paid by the 266 |
|---|
| 400 | | - | contract holder. In the event that the agreement is cancelable, 267 |
|---|
| 401 | | - | it must include the methodology for calculating any refund due 268 |
|---|
| 402 | | - | of the unearned purchase price of the vehicle value protect ion 269 |
|---|
| 403 | | - | agreement. 270 |
|---|
| 404 | | - | (f) That the extension of credit, the terms of the credit, 271 |
|---|
| 405 | | - | or the terms of the related motor vehicle sale or lease may not 272 |
|---|
| 406 | | - | be conditioned upon the purchase of the vehicle value protection 273 |
|---|
| 407 | | - | agreement. 274 |
|---|
| 408 | | - | (2) A vehicle value protection agreeme nt must state the 275 |
|---|
| 384 | + | vehicle value protection agreement, including, if applicable, a 251 |
|---|
| 385 | + | telephone number, website, or mailing address where the contract 252 |
|---|
| 386 | + | holder may apply for a benefit. 253 |
|---|
| 387 | + | (e) Whether the vehicle value protectio n agreement is 254 |
|---|
| 388 | + | cancellable after the free -look period and the conditions under 255 |
|---|
| 389 | + | which it may be canceled, including the procedures for 256 |
|---|
| 390 | + | requesting any refund of the unearned purchase price paid by the 257 |
|---|
| 391 | + | contract holder. In the event that the agreement is cance lable, 258 |
|---|
| 392 | + | it must include the methodology for calculating any refund due 259 |
|---|
| 393 | + | of the unearned purchase price of the vehicle value protection 260 |
|---|
| 394 | + | agreement. 261 |
|---|
| 395 | + | (f) That the extension of credit, the terms of the credit, 262 |
|---|
| 396 | + | or the terms of the related motor vehicle sale or l ease may not 263 |
|---|
| 397 | + | be conditioned upon the purchase of the vehicle value protection 264 |
|---|
| 398 | + | agreement. 265 |
|---|
| 399 | + | (2) A vehicle value protection agreement must state the 266 |
|---|
| 400 | + | terms, restrictions, or conditions governing cancellation of the 267 |
|---|
| 401 | + | vehicle value protection agreement before th e termination or 268 |
|---|
| 402 | + | expiration date of the vehicle value protection agreement by 269 |
|---|
| 403 | + | either the provider or the contract holder. The provider of the 270 |
|---|
| 404 | + | vehicle value protection agreement shall mail a written notice 271 |
|---|
| 405 | + | to the contract holder at the last known address of the contract 272 |
|---|
| 406 | + | holder contained in the records of the provider at least 5 days 273 |
|---|
| 407 | + | before cancellation by the provider, which notice must state the 274 |
|---|
| 408 | + | effective date of the cancellation and the reason for the 275 |
|---|
| 421 | | - | terms, restrictions, or conditions governing cancellation of the 276 |
|---|
| 422 | | - | vehicle value protection agreement before the termination or 277 |
|---|
| 423 | | - | expiration date of the vehicle value protection agreement by 278 |
|---|
| 424 | | - | either the provider or the contract holder. The pro vider of the 279 |
|---|
| 425 | | - | vehicle value protection agreement shall mail a written notice 280 |
|---|
| 426 | | - | to the contract holder at the last known address of the contract 281 |
|---|
| 427 | | - | holder contained in the records of the provider at least 5 days 282 |
|---|
| 428 | | - | before cancellation by the provider, which notice m ust state the 283 |
|---|
| 429 | | - | effective date of the cancellation and the reason for the 284 |
|---|
| 430 | | - | cancellation. However, such prior notice is not required if the 285 |
|---|
| 431 | | - | reason for cancellation is nonpayment of the provider fee, a 286 |
|---|
| 432 | | - | material misrepresentation by the contract holder to the 287 |
|---|
| 433 | | - | provider or administrator, or a substantial breach of duties by 288 |
|---|
| 434 | | - | the contract holder relating to the covered motor vehicle or its 289 |
|---|
| 435 | | - | use. If a vehicle value protection agreement is canceled by the 290 |
|---|
| 436 | | - | provider for a reason other than nonpayment of the provider fee, 291 |
|---|
| 437 | | - | the provider must refund to the contract holder 100 percent of 292 |
|---|
| 438 | | - | the unearned pro rata provider fee paid by the contract holder, 293 |
|---|
| 439 | | - | if any. If coverage under the vehicle value protection agreement 294 |
|---|
| 440 | | - | continues after a claim, any refund may reflect a deduction for 295 |
|---|
| 441 | | - | claims paid and, at the discretion of the provider, an 296 |
|---|
| 442 | | - | administrative fee of not more than $75. 297 |
|---|
| 443 | | - | Section 7. Section 520.155, Florida Statutes, is created 298 |
|---|
| 444 | | - | to read: 299 |
|---|
| 445 | | - | 520.155 Commercial transactions exempt. —Sections 520.154 300 |
|---|
| 421 | + | cancellation. However, such prior notice is not require d if the 276 |
|---|
| 422 | + | reason for cancellation is nonpayment of the provider fee, a 277 |
|---|
| 423 | + | material misrepresentation by the contract holder to the 278 |
|---|
| 424 | + | provider or administrator, or a substantial breach of duties by 279 |
|---|
| 425 | + | the contract holder relating to the covered motor vehicle or its 280 |
|---|
| 426 | + | use. If a vehicle value protection agreement is canceled by the 281 |
|---|
| 427 | + | provider for a reason other than nonpayment of the provider fee, 282 |
|---|
| 428 | + | the provider must refund to the contract holder 100 percent of 283 |
|---|
| 429 | + | the unearned pro rata provider fee paid by the contract holder, 284 |
|---|
| 430 | + | if any. If coverage under the vehicle value protection agreement 285 |
|---|
| 431 | + | continues after a claim, any refund may reflect a deduction for 286 |
|---|
| 432 | + | claims paid and, at the discretion of the provider, an 287 |
|---|
| 433 | + | administrative fee of not more than $75. 288 |
|---|
| 434 | + | Section 7. Section 520.155, Florida Statutes, is created 289 |
|---|
| 435 | + | to read: 290 |
|---|
| 436 | + | 520.155 Commercial transactions exempt. —Sections 520.154 291 |
|---|
| 437 | + | and 520.156 do not apply to vehicle value protection agreements 292 |
|---|
| 438 | + | offered in connection with a commercial transaction. 293 |
|---|
| 439 | + | Section 8. Section 520.156, Florida S tatutes, is created 294 |
|---|
| 440 | + | to read: 295 |
|---|
| 441 | + | 520.156 Penalties.—A provider, an administrator, or any 296 |
|---|
| 442 | + | other person who willfully and intentionally violates ss. 297 |
|---|
| 443 | + | 520.151-520.155 commits a noncriminal violation, as defined in 298 |
|---|
| 444 | + | s. 775.08(3), punishable by a fine not to exceed $500 per 299 |
|---|
| 445 | + | violation and not more than $10,000 in the aggregate for all 300 |
|---|
| 458 | | - | and 520.156 do not apply to veh icle value protection agreements 301 |
|---|
| 459 | | - | offered in connection with a commercial transaction. 302 |
|---|
| 460 | | - | Section 8. Section 520.156, Florida Statutes, is created 303 |
|---|
| 461 | | - | to read: 304 |
|---|
| 462 | | - | 520.156 Penalties.—A provider, an administrator, or any 305 |
|---|
| 463 | | - | other person who willfully and intentional ly violates ss. 306 |
|---|
| 464 | | - | 520.151-520.155 commits a noncriminal violation as defined in s. 307 |
|---|
| 465 | | - | 775.08(3), punishable by a fine not to exceed $500 per violation 308 |
|---|
| 466 | | - | and not more than $10,000 in the aggregate for all violations of 309 |
|---|
| 467 | | - | a similar nature. For purposes of this sectio n, the term 310 |
|---|
| 468 | | - | "violations of a similar nature" means violations that consist 311 |
|---|
| 469 | | - | of the same or similar course of conduct, action, or practice, 312 |
|---|
| 470 | | - | irrespective of the number of times the action, conduct, or 313 |
|---|
| 471 | | - | practice determined to be a violation of ss. 520.151 -520.155 314 |
|---|
| 472 | | - | occurred. 315 |
|---|
| 473 | | - | Section 9. Section 520.157, Florida Statutes, is created 316 |
|---|
| 474 | | - | to read: 317 |
|---|
| 475 | | - | 520.157 Excess wear and use waiver. — 318 |
|---|
| 476 | | - | (1) For purposes of this section, the term "excess wear 319 |
|---|
| 477 | | - | and use waiver" means a contractual agreement wherein a lessor 320 |
|---|
| 478 | | - | agrees, regardless of whether subject to a separate fee, to 321 |
|---|
| 479 | | - | cancel or waive all or part of amounts that may become due under 322 |
|---|
| 480 | | - | a lease agreement as a result of excess wear and use of a motor 323 |
|---|
| 481 | | - | vehicle, which agreement must be part of, or a separate addendum 324 |
|---|
| 482 | | - | to, the lease agreement. Such waivers may also cancel or waive 325 |
|---|
| 483 | | - | |
|---|
| 484 | | - | CS/CS/HB 605 2024 |
|---|
| 485 | | - | |
|---|
| 486 | | - | |
|---|
| 487 | | - | |
|---|
| 488 | | - | CODING: Words stricken are deletions; words underlined are additions. |
|---|
| 489 | | - | hb0605-02-c2 |
|---|
| 490 | | - | Page 14 of 14 |
|---|
| 491 | | - | F L O R I D A H O U S E O F R E P R E S E N T A T I V E S |
|---|
| 492 | | - | |
|---|
| 493 | | - | |
|---|
| 494 | | - | |
|---|
| 495 | | - | amounts due for excess mileage. 326 |
|---|
| 496 | | - | (2) A retail lessee may contract with a retail lessor for 327 |
|---|
| 497 | | - | an excess wear and use waiver in connection with a lease 328 |
|---|
| 498 | | - | agreement. 329 |
|---|
| 499 | | - | (3) The terms of the related motor vehicle lea se may not 330 |
|---|
| 500 | | - | be conditioned upon the consumer's payment for any excess wear 331 |
|---|
| 501 | | - | and use waiver. However, excess wear and use waivers may be 332 |
|---|
| 502 | | - | discounted or given at no charge in connection with the purchase 333 |
|---|
| 503 | | - | of other noncredit-related goods. 334 |
|---|
| 504 | | - | (4) A lease agreement that includes an excess wear and use 335 |
|---|
| 505 | | - | waiver must disclose all of the following: 336 |
|---|
| 506 | | - | (a) The total charge for the excess wear and use waiver. 337 |
|---|
| 507 | | - | (b) Any exclusions or limitations on the amount of excess 338 |
|---|
| 508 | | - | wear and use which may be waived under the excess wear a nd use 339 |
|---|
| 509 | | - | waiver. 340 |
|---|
| 510 | | - | (c) The terms, restrictions, or conditions governing 341 |
|---|
| 511 | | - | cancellation of the excess wear and use waiver before the 342 |
|---|
| 512 | | - | termination or expiration of the excess wear and use waiver, 343 |
|---|
| 513 | | - | which may include an administrative fee of not more than $75. 344 |
|---|
| 514 | | - | (5) An excess wear and use waiver is not insurance for 345 |
|---|
| 515 | | - | purposes of the Florida Insurance Code. 346 |
|---|
| 516 | | - | Section 10. This act shall take effect October 1, 2024. 347 |
|---|
| 458 | + | violations of a similar nature. For purposes of this section, 301 |
|---|
| 459 | + | the term "violations of a similar nature" means violations that 302 |
|---|
| 460 | + | consist of the same or similar course of conduct, action, o r 303 |
|---|
| 461 | + | practice, irrespective of the number of times the action, 304 |
|---|
| 462 | + | conduct, or practice, determined to be a violation of ss. 305 |
|---|
| 463 | + | 520.151-520.155 occurred. 306 |
|---|
| 464 | + | Section 9. Section 520.157, Florida Statutes, is created 307 |
|---|
| 465 | + | to read: 308 |
|---|
| 466 | + | 520.157 Excess wear and use waiver. —For purposes of this 309 |
|---|
| 467 | + | section, the term "excess wear and use waiver" means a 310 |
|---|
| 468 | + | contractual agreement wherein a lessor agrees, regardless of 311 |
|---|
| 469 | + | whether subject to a separate fee, to cancel or waive all or 312 |
|---|
| 470 | + | part of amounts that may become due under a lease agreement as a 313 |
|---|
| 471 | + | result of excess wear and use of a motor vehicle, which 314 |
|---|
| 472 | + | agreement must be part of, or a separate addendum to, the lease 315 |
|---|
| 473 | + | agreement. Such waivers may also cancel or waive amounts due for 316 |
|---|
| 474 | + | excess mileage. 317 |
|---|
| 475 | + | Section 10. This act shall take effect October 1, 2024. 318 |
|---|