Fortegra's compliance experts can help you stay up to date on new legal changes in the Automotive F&I industry. Read our regular compliance updates to stay informed.
Staying on top of regulatory updates in the Automotive F&I industry is critical to the success of your business. We’ve got you covered, making sure you stay in the know as industry compliance evolves.
This month, our experts relay important legislative updates on Vehicle Service Contracts in New York and Connecticut. Check out the latest VSC updates below.
Enacted Legislation:
New York SB 3631: Amends the definition of service contract to add:
In conjunction with a motor vehicle leased for personal use, such term shall also mean a contract to perform the repair, replacement or maintenance of property, or to provide indemnification for repair, replacement or maintenance, due to excess wear and use or damage for items such as tires, paint cracks or chips, interior stains, rips or scratches, exterior dents or scratches, windshield cracks or chips, missing interior or exterior parts that result in a lease-end charge not otherwise covered by a service agreement or warranty, provided any such payment shall not exceed the purchase price of the vehicle.
Legislative Update/Movement: 12/23/2019 – Approved by the Governor
Effective Date: December 23, 2019
Licensing Impact: N/A
Product/Program Impact: Service Contracts
Consumer Contract Impact: Allows Excess Wear and Use
Action: Review bill for required disclosures and make revisions to NY Service Contracts, if applicable
NEW Legislation:
New York SB 6953: Amends the excess wear and use portion of the service contract definition to remove the authorization of such products to cover tires, paint cracks or chips, exterior dents or scratches, windshield cracks or chips, and exterior parts.
The language also narrows the scope of excess wear and use coverage by removing the phrase “items such as” from the list of examples so that the list would be exhaustive.
Legislative Update/Movement: 1/9/2020 – Ordered to Third Reading
Effective Date: Retroactively, December 23, 2019
Licensing Impact: N/A
Product/Program Impact: Service Contracts
Consumer Contract Impact: Allows Excess Wear and Use
Action: Review bill for required disclosures and make revisions to NY Service Contracts, if applicable
NEW Update(s):
Connecticut Insurance Department Bulletin PC-90: Regarding extended warranty contracts and reimbursement insurance policies. This Bulletin replaces PC-45-03 and PC-84.
I. EXTENDED WARRANTY FILING REQUIREMENTS:
Conn. Gen. Stat. §42-260(c) and Conn. Agencies Regs. §42-260-1 et seq. set forth detailed consumer protection requirements for extended warranty providers to sell and market extended warranties in Connecticut. Extended warranty forms are required to be filed with the Department for informational purposes together with a filing fee of thirty dollars per form ($30/form). As described in III. below, all such filings are required to identify—by the SERFF Number or State Tracking Number—the extended warranty reimbursement insurance policy1 form (and the insurer) covering the obligations under such extended warranties.
II. EXTENDED WARRANTY REIMBURSEMENT INSURANCE POLICIES:
Conn. Gen. Stat. §42-260(d) provides that an extended warranty contract provider may not issue, sell or offer for sale extended warranty contracts in this state unless they are insured under an extended warranty reimbursement insurance policy issued by a Connecticut authorized insurer (or the extended warranty provider is able to satisfy certain financial security requirements as set forth in Conn. Gen. Stat. §42-260(d)). Insurers selling extended warranty reimbursement insurance policies are required to file rates and forms for these products pursuant to the insurance commercial risk rating statutes under chapter 701 of the Connecticut General Statutes. For extended warranty filings made on and after January 1, 2020, the Department will limit its review to the extended warranty reimbursement insurance policies covering the obligations under such extended warranties.
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We hope that these recent rulings help you conduct your Automotive F&I business with complete, informed compliance. Check back for more compliance updates from Fortegra’s team of industry leaders in our nextnewsletter!
Disclaimer: With the understanding this shall not be construed as legal advice on the compliance of your programs, this newsletter does not contain information for all legislation that may affect a provider or administrator. You should review legislative bills in their entirety to determine the impact and what actions are needed, if any, to comply with state laws/regulations.
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