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 a comprehensive definition of "extended warranty," which now includes coverage for services such as tire and windshield repairs, paintless dent removal, and lost or stolen key replacements. It also defines "vehicle theft protection product" as devices aimed at preventing theft, which must include a warranty. Key obligations for extended warranty providers are established, including the requirement to provide necessary services and parts without additional charges, and the stipulation that extended warranties must contain clear terms and conditions. Additionally, the bill mandates that extended warranty providers must be insured under a reimbursement insurance policy or demonstrate sufficient financial reserves, with specific modifications to the financial requirements for these providers.

The legislation also introduces a new fee structure, including a $1,500 filing fee for extended warranty providers and vehicle theft protection product warrantors when submitting rate requests or undergoing mergers. It repeals the previous requirement for reciprocal jurisdiction reinsurers and establishes new provisions for warranty providers. The bill empowers the insurance commissioner to investigate unfair practices, impose fines, and take action against violators, with penalties reaching up to $50,000 for specific infractions. Overall, the bill aims to enhance consumer protection and regulatory oversight in the extended warranty sector while streamlining the fee structure for insurance-related services, with an effective date set for October 1, 2025.

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