Substitute Senate Bill No. 1425 seeks to amend existing laws related to motor vehicle protection products, specifically focusing on extended warranties and vehicle theft protection products. The bill introduces new definitions for "extended warranty," which now includes coverage for services such as tire and windshield repairs, paintless dent removal, and excess wear and tear on leased vehicles. It also defines "vehicle theft protection product" and "vehicle theft protection product warranty," establishing a framework for warranties associated with theft prevention devices. Key obligations for extended warranty providers are outlined, including the requirement to supply necessary services and parts without additional charges, and to include specific information in warranty documents. The bill deletes previous definitions and requirements that are now replaced by these new provisions, with an effective date set for October 1, 2025.

Additionally, the bill enhances regulatory oversight by requiring extended warranty providers to maintain adequate reserves held in trust and mandates that insurers issuing extended warranty reimbursement policies maintain a minimum surplus of $15 million. It establishes a filing fee of $1,500 for extended warranty providers and vehicle theft protection product warrantors when submitting rate requests or filings. The bill also empowers the insurance commissioner to investigate unfair practices, impose fines, and take action against violators, with fines reaching up to $5,000 per violation and a maximum of $50,000 for certain offenses. Overall, the bill aims to strengthen consumer protection and regulatory compliance in the extended warranty and insurance sectors.

Statutes affected:
Raised Bill: 42-260
INS Joint Favorable Substitute: 42-260
File No. 438: 42-260