Substitute Senate Bill No. 1425 seeks to amend existing laws related to motor vehicle protection products, particularly 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. The bill mandates that extended warranty providers supply necessary services and parts without additional charges, include specific information in warranties, and maintain adequate financial reserves or insurance. Notably, it repeals Section 42-260 of the general statutes, replacing it with updated provisions to enhance consumer protection and clarity in the warranty process.

Additionally, the bill imposes new regulatory requirements on extended warranty providers and insurers, including the management of reserves by an independent trustee and annual certification by an actuary. It establishes a new fee structure, including a $1,500 filing fee for extended warranty providers and vehicle theft protection product warrantors when filing rate requests or for mergers and acquisitions. The bill also clarifies that contracts for these warranties do not constitute engaging in the business of insurance, thereby exempting them from general insurance requirements. Furthermore, it empowers the insurance commissioner to investigate unfair practices, impose penalties, and seek injunctive relief for violations, enhancing accountability within the insurance sector. The effective date for these changes is set for October 1, 2025.

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