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 Reengrossed 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 of the following:
(1)A manufacturer, distributor, or dealer of motor vehicles as defined in present law (R.S.
32:1252).
(2)A vehicle mechanical breakdown insurer licensed pursuant to present law (R.S. 22:362).
(3)A person acting on behalf of a manufacturer, distributor, dealer, or licensed vehicle
mechanical breakdown insurer.
(4)An entity licensed pursuant to present law (R.S. 6:969.37).
(5)An FDIC insured depository financial institution operating with a main office or one or more
branches in this state, or their subsidiaries or affiliates.
(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.
The House Floor Amendments to the engrossed bill:
1. Exempt from proposed law any entity licensed pursuant to present law, or any FDIC
insured depository financial institution operating with a main office or one or more
branches in this state, or their subsidiaries or affiliates.