Senate Bill 2342, also known as the "Tennessee Vehicle Value Protection Product Act," amends Tennessee Code Annotated by replacing the existing Chapter 55 of Title 56 with new provisions governing vehicle value protection agreements. The bill defines key terms such as "administrator," "contract holder," "covered vehicle," and "provider," and outlines the requirements for offering such agreements. Notably, it mandates that providers must guarantee their obligations through an insurance policy that ensures contract holders are compensated if the provider fails to fulfill its commitments. The bill also specifies that these agreements are not classified as insurance and are exempt from insurance regulations.

Additionally, the bill establishes requirements for the cancellation of vehicle value protection agreements, including the necessity for providers to notify contract holders of cancellation reasons and refund policies. It allows providers to retain a third-party administrator and outlines the powers and duties of such administrators. The commissioner of commerce and insurance is tasked with creating rules to implement the chapter, which will include additional disclosures, record-keeping requirements, and penalties for violations. The act is set to take effect on July 1, 2026, and will apply to agreements entered into, renewed, or amended after that date.