HLS 16RS-172 ENGROSSED
2016 Regular Session
HOUSE BILL NO. 340
BY REPRESENTATIVE STOKES
CONSUMERS/PROTECTI ON: Prohibits certain sales or offers for sale of extended service
agreements for motor vehicles
1 AN ACT
2To enact R.S. 51:1422, relative to the regulation of the sale or the solicitation for sale of an
3 extended service agreement for motor vehicles; to prohibit certain sales or offers for
4 sale of an extended service agreement; to classify each violation as a deceptive and
5 unfair trade practice; to provide for exceptions; and to provide for related matters.
6Be it enacted by the Legislature of Louisiana:
7 Section 1. R.S. 51:1422 is hereby enacted to read as follows:
8 ยง1422. Unfair or deceptive trade practice; prohibition of third party motor vehicle
9 extended service agreements; violations and penalties; exceptions
10 A. It shall be unlawful for any person to sell or solicit for sale an extended
11 service agreement, including any vehicle mechanical breakdown insurance policy or
12 vehicle component coverage contract, either by mail or by telephone, relative to a
13 motor vehicle as defined in R.S. 32:1252.
14 B.(1) Any violation of this Section shall be a deceptive and unfair trade
15 practice and shall subject the violator to any and all actions and penalties provided
16 for in this Chapter.
17 (2) For the purpose of this Section, a violation shall occur each time an
18 extended service agreement relative to a motor vehicle is sold or solicited for sale
19 either by mail or by telephone.
Page 1 of 2
CODING: Words in struck through type are deletions from existing law; words underscored
are additions. HLS 16RS-172 ENGROSSED
HB NO. 340
1 C. The provisions of this Section shall not apply to any manufacturer,
2 distributor, or dealer of motor vehicles as defined in R.S. 32:1252, any vehicle
3 mechanical breakdown insurer licensed pursuant to R.S. 22:362, or any person acting
4 pursuant to an agreement of and on behalf of such manufacturer, distributor, dealer,
5 or licensed vehicle mechanical breakdown insurer.
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
HB 340 Engrossed 2016 Regular Session Stokes
Abstract: Prohibits the sale or offer for sale of extended service agreements for motor
vehicles, either by mail or by telephone.
Proposed law declares that it shall be unlawful for any person to sell or solicit for sale an
extended service agreement, including any vehicle mechanical breakdown insurance policy
or vehicle component coverage contract, either by mail or by telephone, relative to a motor
vehicle as defined in present law (R.S. 32:1252).
Proposed law establishes that any violation of proposed law shall be a deceptive and unfair
trade practice and shall subject the violator to any and all actions and penalties provided for
in present law (Chapter 13 of Title 51). Further, proposed law establishes that a violation
occurs each time an extended service agreement relative to a motor vehicle is sold or
solicited for sale either by mail or by telephone.
Proposed law provides that the provisions of proposed law shall not apply to any
manufacturer, distributor, or dealer of motor vehicles as defined in present law (R.S.
32:1252), any vehicle mechanical breakdown insurer licensed pursuant to present law (R.S.
22:362) or any person acting on behalf of a manufacturer, distributor, dealer, or licensed
vehicle mechanical breakdown insurer.
(Adds R.S. 51:1422)
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Commerce to the
original bill:
1. Delete references to "warranties" thereby making "extended service agreements"
the sole focus of proposed law.
2. Add the prohibitions to sell or solicit for sale by mail or telephone any vehicle
mechanical breakdown insurance policy or vehicle component coverage contract.
3. Exempt from proposed law motor vehicle distributors, vehicle mechanical
breakdown insurers, and those acting on behalf of a manufacturer, distributor,
dealer, or vehicle mechanical breakdown insurer.
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CODING: Words in struck through type are deletions from existing law; words underscored
are additions.