Incorporates into the existing rules a new category of Motor Vehicle Service Agreement Companies: “Motor Vehicle Manufacturers.”

DEPARTMENT OF FINANCIAL SERVICES
OIR – Insurance Regulation

RULE NO.: RULE TITLE:
69O-200.004: Qualification to Obtain and Hold a License
69O-200.005: Use of the Statutory Deposit
69O-200.006: Contractual Liability Insurers
69O-200.009: Form Filings
69O-200.014: Exemption From Financial Examination
69O-200.015: Forms Incorporated by Reference
PURPOSE AND EFFECT: Incorporates into the existing rules a new category of Motor Vehicle Service Agreement Companies: “Motor Vehicle Manufacturers.”
SUMMARY: In Sections 634.011(7) and 634.041(12), Florida Statutes, the legislature created a new category of Motor Vehicle Service Agreement Companies: “Motor Vehicle Manufacturers.” These amendments address the legislative mandate to modify the rules and forms to incorporate this new category.
SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION:
The Agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the agency.
The Agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: Agency personnel familiar with the subject matter of the rule amendment have performed an economic analysis of the rule amendment that shows that the rule amendment is unlikely to have an adverse impact on the State economy in excess of the criteria established in Section 120.541(2)(a), Florida Statutes.
Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.
RULEMAKING AUTHORITY: 634.021, 634.031, 634.041, 634.121, 634.1213, 634.1216, 634.061, 634.252 FS.
LAW IMPLEMENTED: 634.041(12), 637.137(6) FS.
IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE HELD AT THE DATE,TIME AND PLACE SHOWN BELOW(IF NOT REQUESTED, THIS HEARING WILL NOT BE HELD):
DATE AND TIME: February 27, 2012, 9:30 a.m.
PLACE: Room 142, Larson Building, 200 East Gaines Street, Tallahassee, Florida
Pursuant to the provisions of the Americans with Disabilities Act, any person requiring special accommodations to participate in this workshop/meeting is asked to advise the agency at least 5 days before the workshop/meeting by contacting: David Altmaier, Office of Insurance Regulation, E-mail [e-mail]. If you are hearing or speech impaired, please contact the agency using the Florida Relay Service, 1(800)955-8771 (TDD) or 1(800)955-8770 (Voice).
THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: David Altmaier, Office of Insurance Regulation, E-mail [e-mail]

THE FULL TEXT OF THE PROPOSED RULE IS:

69O-200.004 Qualification to Obtain and Hold a License.

(1) An applicant must submit legible fingerprint cards, investigative background checks and biographical statements on Form OIR-CI-1423422, incorporated by reference in Rule 69O-200.015, F.A.C., for the following:

(a) Officers, directors, and stockholders holding 10% or more of the outstanding voting stock of the applicant and of any company or entity which has control over the applicant;

(b) Officers and dDirectors of the applicant and of any company or entity having which has control over the applicant; and,

(c) Partners, members, sStockholders and other individuals holding a voting interest of 10% or more in any greater shares of outstanding stock of the applicant and any company or entity having direct or indirect which has control over the applicant.

(2) An applicant that is a motor vehicle manufacturer, as defined in Section 634.011(7), Florida Statutes, must submit legible fingerprint cards, investigative background checks and biographical statements on Form OIR-C1-1423 for all officers and directors of the applicant only.

(3)(2) Subsequent to the date of licensure, individuals who become associated with the motor vehicle service agreement company in any of the above capacities shall submit the information required in subsection (1) above; however, those individuals who become associated with an agreement company which:

(a) Manufacturers motor vehicles;

(b) Demonstrates it has they have a gap net worth in excess of $100,000,000, as reported under generally accepted accounting principles (GAAP);

(c) Annually files with the Office a 10K Report; and,

(d) Annually notifies the Office in writing of any changes in officers (Executive Vice Presidents and above) and directors of the agreement company, shall be exempt from the requirements of subsection (1).

(4) Individuals named as officers or directors of a motor vehicle manufacturer licensee must within 45 days submit legible fingerprint cards, investigative background checks and biographical statements on Form OIR-C1-1423 for those officers and directors directly overseeing the Florida service contract operations, unless the licensee is exempt under subsection (3) above or subsection (7) below.

(5) In addition to background requirements for newly associated individuals, as noted in subsections (1) through (4) above, an acquisition filing pursuant to Section 628.4615, Florida Statutes, will require updates of previously filed background documentation for material changes.

(6)(3) Motor vehicle service agreement companies are required to notify the Office in writing within 15 days of any change in the corporate name, business name, address or phone number of the company.

(7)(4) The Office will may, at its discretion, waive any of the above provisions if the applicant or licensee can satisfy the Office that the documents are not required in determining if the individual(s) in question can manage the company and its affairs and is competent and trustworthy. The following criteria will be considered by the Office in making this determination:

(a) The financial condition of the applicant or licensee;

(b) The financial condition of the companies having control over the applicant or licensee;

(c) The history and structure of the companies;

(d) The A.M. Best rating of all insurance companies involved; and,

(e) The position held by the individual(s) in question.

(8) Subsequent to the date of licensure, a motor vehicle service agreement company may submit in writing a request to the Office that, for future reporting and compliance requirements, it be recognized as a motor vehicle manufacturer as defined in Section 634.011(7), Chapter 634, F.S. Such request must be certified by an officer of the licensee and must include documentation that clearly sets forth how the licensee meets the definition in Section 634.011(7), F.S.

Rulemaking Specific Authority 634.021 FS. Law Implemented 634.041 FS. History–New 5-26-93, Formerly 4-200.004, Amended_________.

 

69O-200.005 Use of the Statutory Deposit.

The deposit required under Section 634.052, Florida Statutes, may be used in the funding of the 15 10% reserve deposit required under Section 634.041(8)(a)(3)(12), Florida Statutes.

Rulemaking Specific Authority 634.021 FS. Law Implemented 634.052 FS. History–New 5-26-93, Formerly 4-200.005, Amended_________.

 

69O-200.006 Contractual Liability Insurers.

(1) The insurer issuing a contractual liability policy shall, prior to approval by the Office be a property and casualty insurer with a Florida certificate of authority which indicates it may write “other liability insurance” or “auto warranties.”.

(2) All insurers issuing contractual liability policies to motor vehicle service agreement companies must, at a minimum, use policy provisions providing policyholder protection substantially equivalent to and not materially in conflict with that provided in the sample contractual liability policy Form OIR-969, incorporated by reference in Rule 69O-200.015, F.A.C. A policy is in violation of this subsection only if it is in violation of a statute or rule.

Rulemaking Specific Authority 634.021 FS. Law Implemented 634.041 FS. History–New 5-26-93, Formerly 4-200.006, Amended_________.

 

69O-200.009 Form Filings.

Rulemaking Specific Authority 634.021 634.121 FS. Law Implemented 634.121 634.021 FS. History–New 5-26-93, Formerly 4-200.009.

 

69O-200.014 Exemption From Financial Examination.

(1) The Office may, upon receipt of a written request, grant an exemption from the financial examination required by Section 634.141, Florida Statutes.

(2) A company applying for exemption must first submit documentation that demonstrates that the company:

(a) Has a statutory net worth in excess of $500 million;

(b) Has been licensed as a motor vehicle service agreement company for more than 6 years;

(c) Is publicly traded on the New York Stock Exchange;

(d) Files an annual report on the Office’s form on or before March 1 of each year; and

(e) Files with the Office its current Form 10K and 10Q, within 30 days of filing with the Securities and Exchange Commission;

(f) Annually by On or before March 1, 1993 and in three year intervals thereafter, files a written request for the exemption. This request for exemption shall be accompanied by an exemption fee of $2000 to be deposited into the Chief Financial Officer’s Regulatory Trust Fund.

(3) Motor vehicle manufacturers, as defined in Section 634.011(7), Florida Statutes, must only comply with paragraph (2)(f) above to apply for exemption from examination.

Rulemaking Specific Authority 634.021 FS. Law Implemented 634.141, 634.416 634.1216 FS. History–New 5-26-93, Formerly 4-200.014, Amended_________.

 

69O-200.015 Forms Incorporated by Reference.

(1) The following forms are incorporated into this rule chapter by reference to implement the provisions of Chapter 634, Part I, Florida Statutes:

 

Title	Form Number
(a) Application Cover Letter	OIR-CI-982 (02/92)
(b) Application Instructions	OIR-CI-994 (02/92)
(c) Application Checklist	OIR-CI-993 (02/92)
(d) Invoice	OIR-CI-990 (02/92)
(d)(e) Fingerprint Fee Invoice	OIR-CI-903 (09/91)
(e)(f) Application for License as a Motor Vehicle Service Agreement Company	OIR-CI-469 (02/92)
(f)(g) Consent to Service of Process	OIR-CI-144 (11/90)
(g)(h) Resolution Form	OIR-CI-514 (11/90)
(h)(i) Statement of Acquisition	OIR-CI-448 (05/89)
(i)(j) Sample Contractual Liability Policy	OIR-CI-969 (08/92)
(j)(k) Instructions for Deposit	OIR-CI-992 (05/94)
(k)(l) List of Salesman	OIR-CI-995 (02/92)
(l)(m) Management Information	OIR-CI-844 (10/91)
(m)(n) Stockholder Listing	OIR-CI-973 (10/91)
(n)(o) Biographical Statement	OIR-CI-1423422 (09/08) (11/90)
(p) Abbreviated Biographical	OIR-CI-449 (01/91)
(o)(q) Release of Information	OIR-CI-450 (08/92)
(p)(r) Equifax Instructions	OIR-CI-934 (10/91)
(q)(s) Fingerprint Instructions	OIR-CI-938 (04/91)
(r)(t) Annual Statement	OIR-A3-467 (01/92)
(s)(u) Quarterly Report	OIR-A3-466 (02/87)
(t) Application for License Motor Vehicle Service Agreement Company Manufacturer.	OIR-A3-1983 (02/09)
(u) Annual Report for Motor Vehicle Manufacturers. (v) Application for Exemption from Field Examination. (w) Application for License Continuance Motor Vehicle Service Agreement Company.	OIR-A3-1984 (01/10) OIR-A3-1985 (01/10) OIR-A3-2019 (01/10)

(2) These forms are effective on the dates referenced above. Copies of the forms may be obtained from the Office of Insurance Regulation at www.floir.com (Type the form number into the search function).

Rulemaking Specific Authority 634.021 FS. Law Implemented 634.041, 634.061, 634.071, 624.501, 634.161, 634.252 FS. History– New 6-25-90, Formerly 4-114.015, Amended 5-26-93, 6-6-94, Formerly 4-200.015, Amended_________.

NAME OF PERSON ORIGINATING PROPOSED RULE: David Altmaier, Office of Insurance Regulation, E-mail [e-mail]
NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Financial Services Commission
DATE PROPOSED RULE APPROVED BY AGENCY HEAD: December 6, 2011
DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAW: October 16, 2009