Bill Text: GA HB819 | 2011-2012 | Regular Session | Introduced

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Bill Title: Vehicle service agreements; retail installment sellers exempted from reinsurance; provide requirements

Spectrum: Partisan Bill (Republican 6-0)

Status: (Introduced - Dead) 2012-01-31 - House Second Readers [HB819 Detail]

Download: Georgia-2011-HB819-Introduced.html

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12 LC 37 1316

House Bill 819

By: Representatives Maxwell of the 17th, Smith of the 131st, Ehrhart of the 36th, Davis of the 109th, Rice of the 51st, and others

A BILL TO BE ENTITLED
AN ACT

To amend Code Section 33-7-6 of the Official Code of Georgia Annotated, relating to property insurance, contract requirements, rules and regulations, and exemption, so as to provide requirements for retail installment sellers to be exempted from reinsurance requirements relating to vehicle service agreements or extended warranty agreements; to provide for related matters; to repeal conflicting laws; and for other purposes.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:

SECTION 1.

Code Section 33-7-6 of the Official Code of Georgia Annotated, relating to property insurance, contract requirements, rules and regulations, and exemption, is amended by revising paragraph (1) of subsection (b) as follows:

"(1) Any contract, agreement, or instrument whereby a person assumes the risk of and the expense or portion thereof for the mechanical breakdown or mechanical failure of a motor vehicle, or for the removal of dents, dings, or creases in a motor vehicle without affecting the existing paint finish using paintless dent repair techniques or the removal of small windshield chips and cracks without replacement of the entire windshield, and shall include those agreements commonly known as vehicle service agreements or extended warranty agreements, if made by a person other than the motor vehicle manufacturer in exchange for a separately stated charge or the cost of the contract or contracts is included on a nonidentifiable basis in the cost of a motor vehicle sold in conjunction therewith, except that this provision shall not apply to:

(A) An an agreement underwritten by an insurer licensed to transact insurance in this state, either directly or through a reinsurance contract or, without regard to the requirement that the insurance cannot be obtained from an insurer authorized to do business in this state as required by Code Section 33-5-21, to an agreement underwritten by a surplus lines insurer which has not been rejected by the Commissioner for such purpose; and

(B) Those agreements commonly known as vehicle service agreements or extended warranty agreements which are issued, sold, or offered for sale by a retail installment seller, as defined in Code Section 10-1-31, provided that such retail installment seller:

(i) Maintains, or has a parent company maintain, a net worth or stockholders' equity of at least $100 million, provided the parent company guarantees the obligations of the retail installment seller arising from vehicle service agreements or extended warranty agreements underwritten pursuant to this subparagraph;

(ii) Complies with the registration requirement prescribed by the Commissioner through regulation;

(iii) Files with the Commissioner a true and correct copy of the vehicle service agreement or extended warranty agreement in a form that is consistent with the terms prescribed by the Commissioner through regulation;

(iv) Files a copy of its Form 10-K or Form 20-F disclosure statements, or if it does not file such statements with the United States Securities and Exchange Commission, a copy of its audited financial statements reported on a GAAP basis. If the retail installment seller's financial statements are consolidated with those of its parent company, then the retail installment seller may comply with this provision by filing the statements of its parent company. The statement shall be filed with the Commissioner 30 days prior to the retail installment seller's initial offering or delivering of a service agreement or extended warranty agreement, and thereafter, the statement shall be filed with the Commissioner annually; and

(v) Upon the request of the Commissioner, posts a security deposit or surety bond in an amount not to exceed $250,000.00 and in the manner prescribed by the Commissioner through regulation."

SECTION 2.

All laws and parts of laws in conflict with this Act are repealed.