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HOUSE OF REPRESENTATIVES - FLOOR VERSION
STATE OF OKLAHOMA
1st Session of the 59th Legislature (2023)
ENGROSSED SENATE
BILL NO. 541 By: Montgomery of the Senate
and
Sneed of the House
An Act relating to service warranties; amending
Sections 3, 4, and 5, Chapter 16, O.S.L. 2022 (15
O.S. Supp. 2022, Sections 140.4, 140.5, and 140.6),
which relate to debt waivers, vehicle value
protection agreements, and enforcement; requiring
certain administrators to register with the In surance
Department; requiring registration renewal by certain
date; requiring certain registrations and
registration fees to be submitted electronically;
requiring certain contact information changes to be
submitted within certain time period; directing
certain administrators and service warranty
associations to respond to the Insurance Commissioner
within certain time period; removing cash payment as
an acceptable deposit for certain trust with the
Commissioner; updating statutory reference; amending
15 O.S. 2021, Sections 141.4, 141.5, 141.8, 141.13,
as amended by Section 1, Chapter 241, O.S.L. 2017,
141.14, and 141.33, which relate to qualification for
license, annual license requirements, serv ice
warranty forms, annual statements, and claim files;
requiring certain licen se application and fee be
submitted electronically by certain service warranty
association; requiring certain application to include
declaration; conforming language; establishing fees
for certain renewal processes; requiring certain
expired licensees to reapp ly as if a new applicant;
requiring certain app licants to submit certain
report; establishing certain fines; requiring certain
filing of financial statement include information for
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certain time period; updating statutory language; and
providing an effective date.
BE IT ENACTED BY THE PEOPLE OF THE STAT E OF OKLAHOMA:
SECTION 1. AMENDATORY Section 3, Chapter 16, O.S.L. 2022
(15 O.S. Supp. 2022, Section 140.4), is ame nded to read as follows:
Section 140.4. A. As used in this section:
1. “Administrator” means a person, other than an insurer or
creditor that performs administrative or operational functions
pursuant to debt waiver pr ograms;
2. “Borrower” means a debtor, retail buyer, or lessee, under a
finance agreement;
3. “Creditor” means:
a. the lender in a loan or credit transaction,
b. the lessor in a lease transaction,
c. any retail seller of motor vehicles,
d. the seller in commercial retail installment
transactions, or
e. the assignees of any of the foregoing to whom the
credit obligation is payable; and
4. “Debt waiver” includes, but is not limited to:
a. “guaranteed asset protection waivers” or “GAP waivers”
means a contractual agreement wherein a creditor
agrees, with or without a separate charge, to cancel
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or waive all or part of amounts due on a borrowe r’s
financial agreement in the event of a total physical
damage loss or unrecovered theft of the motor vehicle,
which an agreement shall be part of, or as a separate
addendum to, the financial agreement. A GAP waiver
may also provide, with or without a separate charge, a
benefit that waives an amount or provides a borrower
with a credit towards the purchase of a replacement
motor vehicle,
b. “excess wear and use waiver” means a contractual
agreement wherein a creditor agrees, with or without a
separate charge, to cancel or waive all or part of
amounts that may become due under a borrower’s lease
agreement as a result of excessive wear and use of a
motor vehicle, which an agreement shall be part of, or
as a separate addendum to, the lease agreement.
Excess wear and use waivers may also cancel or waive
amounts due for excess mileage, and
c. other products as approved by the Insurance
Commissioner.
B. 1. No administrator or creditor operating as an
administrator shall perform or engage in any administrative or
operational functions of a debt waiver program without first
registering with the Insurance Department. Registration shall be
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renewed annually by July 1 5 of each calendar year. All
registrations shall be filed and fees shall be paid electronically
in the manner and form prescribed by the Commissioner.
2. An administrator or a creditor operating as an administrator
shall electronically file an updated registration within thirty (30)
days of any change of n ame, address, or email address.
3. Every administrator or creditor, upon receipt of a ny inquiry
from the Commissioner, shall furnish the Commissioner with an
adequate response to the inquiry within twenty (20) days from the
date of receipt of the inquiry.
C. As required for offering debt waivers:
1. A retail seller shall insure its debt wa iver obligations
under a contractual liability or other insurance p olicy issued by an
insurer. A creditor other than retail sellers may insure its debt
waiver obligations under a contractual liability policy or other
such policy issued by an insurer. A ny such insurance policy may be
directly obtained by a creditor or retail seller or may be obtained
by an administrator to cover a creditor’s or retail seller’s
obligations. However, retail sellers that are lessors on motor
vehicles are not required to insure obligations related to debt
waivers on such leased motor vehicles;
2. The debt waiver remains a part of the finance agreement upon
the assignment, sale, or transfer of such finance agreement by the
creditor;
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3. Any creditor that offers a debt waiver shall report the sale
of, and subsequently forward the funds due to, the designated party
or parties; and
4. Funds received or held by a credito r or administrator that
belong to an insurer, creditor, or administrator shall be held by
such creditor or administrator in a fiduciary capacity.
C. D. Contractual Liability or Other Insurance Policies.
1. Contractual liability or other insurance policies insuring
debt waivers shall state the obligation of the insurer to reimburse
or pay to the creditor any sum s the creditor is legally obligated to
waive under a debt waiver.
2. Coverage under a contractual liability or other insurance
policy insuring a deb t waiver shall also cover any subsequent
assignee upon the assignment, sale, or transfer of the finance
agreement.
3. Coverage under a contractual liability or other insurance
policy insuring a debt waiver shall remain in effect unless canceled
or terminated in compliance with applicable insurance laws of this
state.
4. The cancelation or termination of a contrac tual liability or
other insurance policy shall not reduce the insurer’s responsibility
for debt waivers issued by the creditor prior to the date of
cancelation or termination and for which the premium has been
received by the insurer.
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D. E. Debt waivers shall disclose in writing and in clear,
understandable language the following:
1. The name and add ress of the initial creditor and the
borrower at the time of sale and identity of any administrator if
different from the creditor;
2. The purchase price , if any, and the terms of the debt waiver
including without limitation, the requirements of protectio n,
conditions, or exclusions associated with the debt waiver;
3. That the borrower may cancel the debt waive r within a free
look period, as specified in the debt waiver, and will be entitled
to a full refund of the purchase price paid by the borrower, if any,
as long as no benefits have been provided ;
4. The procedures the borrower shall follow, if any, t o obtain
debt waiver benefits under the terms and cond itions of the debt
waiver including, if applicable, a telephone number or website and
address where the borrower may apply for debt waiver benefits;
5. Whether or not the debt waiver may be canceled after the
free look period and the conditions under whic h it may be canceled
or terminated including the procedures for requesting any refund of
amounts paid;
6. That in order to receive any refund due in the event of a
borrower’s cancelation of the debt waiver, the borrower, in
accordance with the term of the debt waiver, shall provide a written
request to cancel to the creditor, administrator, or other such
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party. If the cancelation of a debt waiver is due to an early
termination of the finance agreement and no benefit has been or will
be provided, then the borrower, in accordance with the terms of the
debt waiver, shall provide a written request to cancel to the
creditor or administrator within ninet y (90) days of the occurrence
of the event terminating the finance agreement;
7. The methodology for calculating any refund of the unearned
purchase price of the debt waiver, if any, shal l be due in the event
of cancelation of the debt waiver or early ter mination of a finance
agreement; and
8. That neither the extension of credit, the terms of the
credit, nor the terms of the related motor vehicle sale or lease,
may be conditioned upon th e borrower’s purchase of a debt waiver.
E. F. Cancelation.
1. Debt waiver agreements may be cancelable or non-cancelable
following the free look period. Debt waivers shal l provide the
borrower, if a borrower cancels a debt waiver within the free look
period, a full refund of the amount the borrower paid, if any, as
long as no benefits have been provided.
2. In the event of a borrowe r’s cancelation of the debt waiver
or upon the early termination of the finance agreement after the
debt waiver has been in effect beyond the free look period, the
borrower may be entitled to a refund of the amount the borrower paid
of the unearned portion of the purchase price, if any, minus a
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cancelation fee not to exceed Seventy-five Dollars ($75.00), if no
benefit has been or will be provided. I n order to receive any
refund due in the event of a borrower’s cancellation of the debt
waiver, the borrower shall provide a written request to cancel , in
accordance with the terms of the debt waiver, to the creditor or
administrator. If the cancelation i s due to the early termination
of the finance agreement, then the borrower, in accordance with the
terms of the debt waiver, shall provide a written request to cancel
to the creditor or administrator within ninety (90) days of the
occurrence of the event terminating the finance agreement.
3. If the cancelation of a debt waiver occurs as a result of a
default under the finance agreement or the repossession of the motor
vehicle associated with the finance agreement, or any other
termination of the finance agreement, any refund due may be paid
directly to the creditor or administrator, unless the borrower can
show that the finance agreement has been paid in ful l.
F. G. Exempt Transactions.
1. Debt waivers offered by state or federal b anks or credit
unions in compliance with the applicable state or federal law are
exempt from this act Section 140.2 et seq. of this title .
2. Subsection D E of this section and Section 5 140.6 of this
act title shall not apply to debt waivers offered in connection with
commercial transactions.
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SECTION 2. AMENDATORY Sec tion 4, Chapter 16, O.S.L. 2022
(15 O.S. Supp. 2022, Section 140.5), is amended to read as follows:
Section 140.5. A. As used in this section:
1. “Administrator” means the person who may be responsible for
the administrative or operational function of vehicle value
protection agreements including, but not limited to, the
adjudication of claims or benefits requested by contract holders;
2. “Contract holder” means a person who is the purchaser or
holder of a vehicle value protection agreement;
3. “Provider” means a person that is obligated to provide a
benefit under a vehicle value protection agreement. A provider may
perform as an administrator or retain the services of a third-party
administrator; and
4. “Vehicle value protection agreement ” means a contractual
agreement that provides a benefit towards either the reduction of
some or all of the con tract holder’s current finance agreement
deficiency balance, or towards the purchase or lease of a
replacement motor vehicle or motor vehicle services, upon t he
occurrence of an adverse event to the motor vehicle inc luding, but
not limited to, loss, theft, damage, obsolescence, diminished value,
or depreciation. These agreements do not include debt waivers.
These agreements may include, but not be limited to, trade-in-credit
agreements, diminished value agreements, depreciation benefit
agreements, or other similarly named agreements.
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B. 1. No administrator or provider operating as an
administrator shall perform or engage in any administrative or
operational functions of vehicle value protection agreements without
first registering with the Insurance Department. Registration shall
be renewed annually by July 15
of each calendar year. All
registrations shall be filed and fees shall be paid electronically
in the manner and form prescribed by the Insurance Commissioner.
2. An administrator or a provider operating as an administrator
shall electronically file an updated registration within thirty (30)
days of any change of name, address, or email address.
3. Every administrator and provider, upon receipt of any
inquiry from the Commissioner, shall furnish the Commissioner with
an adequate response to the inquiry within twenty (20) days from the
date of receipt of the inquiry.
C. Requirements for offering vehicle value protection
agreements:
1. A provider may utilize an administrator or other designee to
be responsible for any and all of the adm inistration of vehicle
value protection agreements in compliance with this act Section
140.2 et seq. of this title ;
2. Vehicle value protection agreements shall not be sold un less
the contract holder has been or will be provided access to a copy of
that vehicle value protection agreement;
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3. In order to assure the faithful performance of the
provider’s obligations to its contract holders, each provider shall
be responsible for complying with the requirements of one of the
following:
a. insure all of its vehicle value protection agreements
under an insurance policy that covers one hundred
percent (100%) of its claim exposure, satisfies the
requirements of this act, and contains the following
provision: “In the event the provider is unable to
fulfill its obligations under vehicle value protection
agreements issued in this state for any reason
including insolvency, bank ruptcy, or dissolution, the
insurer will pay any losses and unearned fees to the
person making a claim un der such agreement.” The
insurance policy shall be issued by an insurer
licensed, registered, or otherwise authorized to do
business in this state either:
(1) at the time the policy is filed with the
Insurance Commissioner, and con tinuously
thereafter, (i) maintain surplus as to
policyholders and paid-in capital no less than
Fifteen Million Dollars ($15,000,000.00) and (ii)
annually file copies of the insurer ’s financial
statements, its National Association of Insurance
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Commissioners (NAIC) Annual Statement, and the
actuarial certification required by and filed in
the insurer’s state of domicile, or
(2) at the time the policy is filed with the
Commissioner, and continuously thereafter, (i)
maintain surplus as to policyholders and pai d-in
capital of less than Fifteen Million Dollars
($15,000,000.00) but at least equal to Ten
Million Dollars ($10,000,000.00), (ii)
demonstrate to the satisfaction of the
Commissioner that the company maintains a ratio
of net written premiums, wherever written, to
surplus as to policyholders and paid-in capital
of not greater than 3 to 1, and (iii) annually
file copies of the insurer’s audited financial
statements, its NAIC Annual Statement, and the
actuarial certification required by and filed in
the insurer’s state of domicile,
b. (1) maintain a funded reserve account for its
obligations under its contracts issued and
outstanding in this state. The reserves shall
not be less than forty percent (40%) of gross
considerations received, less claims paid, on t he
sale of the vehicle value protection agreement
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for all in-force contracts. The reserve account
shall be subject to examination and review by the
Commissioner, and
(2) place in trust with the Commissioner a financial
security deposit, having a value not less than
five percent (5%) of the gross consideration
received, less claims paid, on the sale of the
vehicle value protection agreements for all
vehicle value protection agreements issued and in
force, but not less than Twenty-five Thousand
Dollars ($25,000.00), consisting of the
following:
(a) a surety bond issued by an authorized
surety,
(b) securities of the type eligible for deposit
by authorized insurers in this state,
(c) cash,
(d) a letter of credit issued by a qualified
financial institution, or
(e)
(d) another form of security prescribed by
regulations issued by the Commissioner, or
c. (1) maintain, or together with its parent company
maintain, a net worth or stockholders’ equity of
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One Hundred Million Dollars ($100,000,000.00), or
and
(2) upon request, provide the Commissioner with a
copy of the provider’s or the provider’s parent
company’s most recent Form 10-K or Form 20-F
filed with the Securities and Exchange Commission
(SEC) within the last calendar year, or if the
company does not file with the SEC, a copy of the
company’s audited financial statements, which
shows a net worth of the provider or its parent
company of at least One Hundred Million Dollars
($100,000,000.00). If the provider’s parent
company’s Form 10-K, Form 20-F, or financial
statements are filed to meet the provider’s
financial security requirement, then the parent
company shall agree to guarantee the obligations
of the provider relating to the vehicle value
protection agreements sold by the provider in
this state; and
4. Except for the requirements in paragraph 3 of subsection B C
of this section, no other financial security requirements shall be
required for vehicle value protection agreement providers.
C. D. Vehicle value protection agreements shall disclose in
writing and in clear, understandable language the following:
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1. The name and address of the provider, contract holder, and
administrator, if any;
2. The terms of the vehicle value protection agreement
including without limitation, the purchase price to be paid by the
contract holder, the requirements for eligibility, conditions of
coverage, or exclusions;
3. That the vehicle value protection agreement may be canceled
by the contract holder within a free look period as specified in the
vehicle value protection agreement, and in such an event, the
contract holder shall be entitled to a full refund of the purchase
price paid by the contract holder, if any, as long as no benefits
have been provided;
4. The procedure the contract holder shall follow, if any, to
obtain a benefit under the terms and conditions of the vehicle value
protection agreement including, if applicable, a telephone number or
website and address where the contract holder may apply for a
benefit;
5. Whether or not the vehicle value protection agreement is
cancelable after the free look period and the conditions under which
it may be canceled including the procedures for requesting any
refund of the unearned purchase price paid by the contract holder;
6. In the event of cancelation, the methodology for calculating
any refund of the unearned purchase price of the vehicle value
protection agreement due;
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7. That neither the extension of credit, the terms of the
credit, nor the terms of the related motor vehicle sale or lease may
be conditioned upon the purchase of the vehicle value protection
agreement; and
8. Vehicle value protectio n agreements shall state the terms
and restrictions, or conditions governing cancelation of the vehicle
value protection agreement pr ior to the termination or expiration
date of the vehicle va lue protection agreement by either the
provider or the contract holder. The provider of the vehicle value
protection agreement shall mail a written notice to the contract
holder at the last known address of the contract holder contained in
the records of the provider at least five (5) days prior to
cancelation by the provider. Prior notice shall not be required if
the reason for cancelation is nonpayment of the provider fee, a
material misrepresentation by the contract holder to the provider or
administrator, or a substantial breach of duties by the contract
holder relating to the covered product or its use. The notice shall
state the effective date of cancelation and the reason for the
cancelation. If a vehicle value protection agreement is canceled by
the provider for a reason other than nonpayment of the provider fee,
the provider shall refund the contract holder one hundred percent
(100%) of the unearned pro rata provider fee paid by the contr act
holder, if any. If coverage under the vehicle value pr otection
agreement continues after a claim, then any refund may deduct claims
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paid. A reasonable administrative fee may be charged by the
provider not to exceed Seventy-five Dollars ($75.00).
D. E. Subsection C D of this section and Section 5 140.6 of
this act title shall not apply to vehicle value protection
agreements offered in connection with a commercial transaction.
SECTION 3. AMENDATORY Section 5, Chapter 16, O.S.L. 2022
(15 O.S. Supp. 2022, Section 140.6), is amended to read as follows:
Section 140.6. The Insurance Commissioner shall promulgate
rules necessary to enforce the provisions of this act Section 140.2
et seq. of this title . After proper notice and opportunity for
hearing the Commissioner may take either or both of the following
actions:
1. Order the creditor, provider, administrator, or any other
person not in compliance with this act Section 140.2 et seq. of this
title to cease and desist from product related operations which are
in violation of this act Section 140.2 et seq. of this title; and or
2. Impose a penalty not to exceed Five Hundred Dollars
($500.00) per violation and no more than Ten Thousand Dollars
($10,000.00) for aggregated violations of a similar nature. For
purposes of this section, “violations of a similar nature” means the
violation consisted of the same or similar course of conduct,
action, or practice, irrespective of the number of times the action,
conduct, or practice which is determined to be a violation of this
act Section 140.2 et seq. of t his title occurred.
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SECTION 4. AMENDATORY 15 O.S. 2021, Section 14 1.4, is
amended to read as follows:
Section 141.4. A. No person in this state shall act as a
service warranty association unless licensed by the Insurance
Commissioner.
B. A service warranty association shall pay to the Insurance
Department a license fe e of Four Hundred Dollars ($400.00) for such
license for each year, or part thereof, the license is in force.
Each service warranty association applying for a license shall
electronically submit a complete license application and pay the
license fee to the Insurance Commissioner in the manner and form
prescribed by the Commissioner, along with any transaction or other
applicable fees. Each application shall include a signed
declaration that under penalty of refusal, suspension, or revocation
of the license, the information provided in the application is true,
correct, and complete to the best of the applicant’s knowledge and
belief.
C. An insurer, while authorized to transact property or
casualty insurance in this state, may also transact a servic e
warranty business without additional qualifications or licensure as
required by the Service Warranty Act, but shall be otherwise subject
to the provisions of the Service Warranty Act.
D. A service warranty association may appoint an administrator
or other designee to be re sponsible for any or all of the
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administration of service warranties and compliance with the Service
Warranty Act.
E. The marketing, sale, offering for sale, issuance, making,
proposing to make and administration of service warranties by
associations and related service warranty sellers, administrators,
and other persons shall be exempt from all provisions of the
Oklahoma Insurance Code.
F. An agreement which provides specified scheduled mai ntenance
services over a stated period of time does no t constitute insurance
or a service warranty .
SECTION 5. AMENDATORY 15 O.S. 20 21, Section 141.5, is
amended to read as fol lows:
Section 141.5. The Insurance Commissioner shall not issue or
renew a license to any service warranty association unless the
association:
1. Is a solvent association;
2. Furnishes the Insurance Department with satisfactory
evidence that the management of the association is competent and
trustworthy and can successfully manage the affairs of the
association in compliance with law;
3. Proposes to use and uses in its business a name together
with a trademark or emblem, if any, which is distinctive and not so
similar to the name or trademark of any other person already doing
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business in this state as will te nd to mislead or confuse the
public;
4. Files the bond required by the Service Warranty Act; and
5. Is formed under the laws of this state or another state,
district, territory, or possession of the U nited States, if the
association is other than a natur al person; and
6. Has submitted all annual financi al statements and
administrative fees required by the Service Warranty Act .
SECTION 6. AMENDATORY 15 O.S. 2021, Section 141.8 , is
amended to read as follows:
Section 141.8. Each license issued to a service warranty
association shall expire on November 1 following the date of
issuance. If the association is then qualified un der the provisions
of the Service Warranty Act, its li cense may be renewed annually,
upon its request electronic submission of a renewal application and
fee in the manner and form prescribed by the Insurance Comm issioner
along with any applicable fees , and upon payment to the Insurance
Commissioner of the license fee in the amount of Four Hundred
Dollars ($400.00) in advan ce for each such license year. A license
expired for failure to submit a renewal applicatio n may be
reinstated within ninety (90) days a fter the expiration date by
electronically submitting a fee in an amount that is doub le the
renewal fee and a renewal application in the form and manner
prescribed by the Commissioner along with any transaction or other
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applicable fees. The Commissioner s hall require a service warranty
association whose license has been expired for more than ninety (90)
days to reapply as if a new applicant and pay an application fee
that is double the initial application fee, in addition to any fines
imposed. All applications received after the license has been
expired for more than ninety ( 90) days shall include a detaile d
report of service warranties issued in this state during the period
of expired licensure.
SECTION 7. AMENDATORY 15 O.S. 2021 , Section 141.13, as
amended by Section 1, Chapter 241, O.S.L. 2017, is amended to read
as follows:
Section 141.13. A. No service warranty form or related form
shall be issued or used in this state unless the f orm has been filed
with the Insurance Commis sioner. Service warranty forms shall not
be subject to prior approval and sh all be filed with the Insurance
Commissioner for informational purposes only.
B. Each service warranty contract shall contain a cancellation
cancelation provision. In the event the contract is canceled by the
warranty holder, return of the provider fee shall be base d upon
ninety percent (90%) of the unearned pro rata provid er fee less the
actual cost of any service provided under the service warran ty
contract. In the event the contract is c anceled by the association,
return of premium shall be based upon one hundred percent (100%) of
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unearned pro rata provider fee less the actual cost of any service
provided under the service warranty contract.
C. Service warranties shall state the name and address of the
service warranty association and shall identify any administr ator if
different from the ser vice warranty association, th e service
warranty seller and the service warranty holder to the extent that
the name of the service warranty holder has been furnished by the
service warranty hold er. For service warranties issue d on and after
July 1, 2017, the identity of the service wa rranty association and
its license number shall be preprinted on the service warranty or
added at the time of sale so co nsumers can clearly identify the
obligor of the service warranty. Informatio n to be printed at the
time of sale shall be indicated as s uch at the time the service
warranty is filed and a “Jane Doe” specimen shall accompany the
service warranty illustratin g how the service warranty will look
after printing.
Each person and service warranty assoc iation shall
electronically submit, in the form and manner prescribed by the
Commissioner, any change of legal business n ame, “doing business as”
or assumed name, address, or contact email address within thirty
(30) days after the change occurred , and any fees deemed necessary
by the Commissioner. Any submission of a change under this
paragraph received more than thirty (30) days after the change
occurs shall be accompanied by a fee of Fifty Dollars ($50.00 ).
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D. The Commissioner sha ll have the authority to immediately
order a service warranty associa tion to stop using any service
warranty contract if the Commissioner determi nes that the form:
1. Violates the Service Warranty Act;
2. Is misleading in any respect; or
3. Is reproduced so that any material provision is
substantially illegible.
E. The Insurance Commissioner may, by order, exempt from the
requirements of this s ection for so long as he or she deems proper
any document or form or type thereof a s specified in such order, t o
which, in his or her discretion , this section may not practicably be
applied, or the filing of which is, in his or her opin ion, not
desirable or necessary for the protection of the public.
SECTION 8. AMENDATORY 15 O.S. 20 21, Section 141.14, is
amended to read as fol lows:
Section 141.14. A. In addition to the license fees provided in
the Service Warranty Act for service warranty associations each
service warranty association and insurer shall annually, on or
before the first day of May, file with the Insurance Commi ssioner
its annual financial sta tement as of a date not earlier than three
hundred sixty-five (365) days prior to the date submitted showing
all gross written provider fees or assessments rec eived by it in
connection with the issuance of service warranties in this state
during the preceding calendar year and other relevant financial
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information as deemed necessa ry by the Commissioner. The financial
statements required by this subsection must be:
1. Audited and prepared in accordance with statutory account ing
principles if the applicant complies with the requirements of
subsection A of Secti on 141.6 of this titl e; or
2. Verified under oath of at least tw o of its principal
officers and prepare d in accordance with generally accepted
accounting principles if the applicant utilizes an insura nce policy
which satisfies the requirements of subsecti on B of Section 141.6 of
this title.
B. The Commissioner may lev y a fine of up to One Hundred
Dollars ($100.00) a day for each day an association neglects to file
its financial statement in the form a nd within the time provided by
the Service Warranty Act .
C. In addition to the annual financial statements required to
be filed by subsection A of this sectio n, the Commissioner may
require of licensees, under oath and in t he form prescribed by it
the Commissioner, quarterly statements or special reports which the
Commissioner deems necessary for the proper supervision of l icensees
under the Service Warranty Act.
D. Provider fees and assessments received by associations and
insurers for service warranties shall n ot be subject to the premium
tax provided in Section 624 of Titl e 36 of the Oklahoma Statutes,
but shall be subject to an administrative fee of equal to two
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percent (2%) of the gross provider fee received on the sale of all
service warranties issued in thi s state during the preceding
calendar quarter. The fees shall b e paid quarterly to t he Insurance
Commissioner. However, licensed associations, licensed insurers and
entities with applications for licensure as a ser vice warranty
association pending with t he Insurance Department that have
contractual liability insurance in place as of March 31, 2009 , from
an insurer which satisfies the requirements of subsections B and C
of Section 141.6 of this title and which covers one hundred percent
(100%) of the claims exposure of the association or insurer on all
contracts written may elec t to pay an annual ad ministrative fee of
Three Thousand Dollars ($3,000.00) in lieu of the two -percent
administrative fee.
SECTION 9. AMENDATORY 15 O.S. 2021, Section 141.33, is
amended to read as follows:
Section 141.33. A. Claim files of service w arranty
associations licensed pursuant to the Service Warranty Act shall be
subject to examination by the Insurance Commi ssioner or by duly
appointed designees. The claim files shall contain all notes and
work papers pertaining to a c laim in such detail t hat pertinent
events and the dates of the events can be reconstructed. In
addition, the Commissioner and authorized empl oyees and examiners
shall have access to any files of a service warranty association
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that may relate to a particul ar complaint under in vestigation or to
an inquiry or examination by the Insurance Department.
B. Every service warranty association, upon rec eipt of any
inquiry from the Commissioner, shall, within thirty (30) twenty (20)
days from the date of the inquiry , furnish the Commiss ioner with an
adequate response to the inquiry.
C. Every service warranty associa tion, upon receipt of any
pertinent written communication including, but not limited to,
electronic mail or other forms of written electronic communicati on
or documentation by the service warranty association of a verbal
communication from a claimant which reasonably suggests that a
response is expected, shall, within thirty (30) days after re ceipt
thereof, furnish the claimant with an adequate response to the
communication.
D. Any violation by a service warranty association of this
section shall subject t he service warranty association to disc ipline
including a civil penalty of not less than One Hundred Dollars
($100.00) nor more than Five Thousand Dollar s ($5,000.00).
SECTION 10. This act shall become effective November 1, 2023.
COMMITTEE REPORT BY: COMMITTEE ON INSURANCE, dated 04/04/2023 - DO
PASS.