SERVICE CONTRACT INDUSTRY COUNCIL, INC.
TALLAHASSEE, FLORIDA

The Service Contract Industry Council (SCIC) is a national trade association that works with lawmakers across the country to develop fair and uniform regulation to protect consumers, and is an advocate for the regulation of the service contract industry. SCIC member companies, which include prominent manufacturers, insurers, retailers, providers and administrators of service contracts, collectively offer approximately 80 percent of all appliance, consumer electronics, home and vehicle service contracts sold in the U.S. The SCIC monitors state legislative and regulatory activities, contributes to relevant legislative and administrative proceedings, and educates businesses and consumers about the value and benefits of service contracts. Since 1988, the SCIC has been the national leader and pivotal force in the development of model legislation throughout the country, working for balanced standards that create fair and consistent regulation of the service contract industry. The SCIC played a significant role in the development of the Service Contract Model Act adopted by the National Association of Insurance Commissioners, and has played a key role in the enactment of legislation in more than 35 states. Furthermore, the SCIC has worked with state regulators in numerous other states to either modify existing regulations or conform state regulatory policies in a manner consistent with the standards of practice appropriate for the industry and its customers. The Service Contract Industry Council (SCIC) is a national trade association that works with lawmakers across the country to develop fair and uniform regulation to protect consumers. The SCIC has adopted model legislation that contains comprehensive consumer disclosures and a set of requirements for doing business that protects both the business that offers the service contract and the consumer who elects to purchase one. FLORIDA: Governor Scott signed House Bill 875, amending the motor vehicle service agreement law. It expressly authorizes tire and wheel coverage and key or key-fob replacement. It also clarifies that the term “additive product” does not include wet appearance care products, and that “road hazard” does not include damage caused by collision with another vehicle, vandalism or other causes covered by an automobile damages policy. This law becomes effective July 1, 2016. IDAHO: Idaho Senate Bill 1262 was signed by Governor Otter, amending the Motor Vehicle Service Contract law to exempt from the definition of a motor vehicle service contract or a contract of insurance, agreements whereby an employer, or a third party contracted by an employer, provides mileage reimbursement and incidental maintenance and repairs to its employees for personal vehicles used for business purposes. The bill goes into effect 60 days after the adjournment of session. VIRGINIA: Governor McAuliffe signed Virginia House Bill 304, changing the license renewal cycle for home service contract providers from biennial to annual beginning July 1, 2017. it also revises the application fee from $1,000 biennially to $500 annually. It also revises the method for calculating the self-funded reserve by making clear that the 40% reserve amount is applied to the number that results from taking the gross provider fees and subtracting any claims paid. The bill became effective upon signing, February 29, 2016. ALABAMA: Governor Bentley signed Alabama House Bill 7 on April 4, 2016, amending the definition of vehicle service contract. The new definition includes tire and wheel coverage, paintless dent repair, windshield repair or replacement, and replacement of keys or key-fobs. The bill also provides a definition of "road hazard" as a hazard that is encountered while driving a motor vehicle, including, but not limited to, potholes, rocks, wood debris, metal parts, glass, plastic, curbs or composite scraps. The bill will become effective July 1, 2016. KENTUCKY: Governor Bevin signed Kentucky Senate Bill 58, legislation being pursued by the SCIC to clarify the law that was inadvertently changed as the result of House Bill 417 that passed in 2012. This bill recodifies the requirement for vehicle service contract providers to maintain insurance backing along with the exemption from such requirement for a manufacturer or distributor of motor vehicles or a wholly owned subsidiary of a manufacturer or distributor. The bill also amends the definition of vehicle service contract to include: tire and wheel coverage; paintless dent repair; windshield repair or replacement; and key or key-fob coverage. WASHINGTON: Governor Inslee signed Washington Senate Bill 6309, legislation being pursued by the SCIC, on April 1, 2016. The bill removes the two-year seasoning requirement for new applicants and makes clear that CLP-backed programs may use certified financial statements. It also allows an applicant that is using its parent company's net worth to demonstrate financial responsibility to avoid submitting the applicant's own financial statements or demonstrate its net worth if the parent company provides a parental guarantee. Additionally, the bill makes clear that audited financial statements are not required during the annual report submission if the licensee utilizes a CLP to demonstrate financial responsibility and that a licensee is not required to submit its own financial statements during the annual reporting process if it utilizes its parent company's net worth to demonstrate financial responsibility. The bill becomes effective June 9, 2016. MARYLAND: Governor Hogan signed Maryland House Bill 675 on May 10, 2016. This bill revises the mechanical repair contracts section of the motor vehicle laws to authorize an "agent" to offer, sell or negotiate a mechanical repair contract. It also adds a definition of "agent" to make it clear that the term refers to a business entity. In addition, the bill increases the maximum penalty for sales through channels other than direct from an obligor company or through licensed dealers from $1,000 to $5,000. This doesn't affect sales made by the obligor or a licensed vehicle dealer. The bill becomes effective October 1, 2016.