Administration of agreements, use of administrator or designee
A company that sells vehicle value protection agreements can use another company to handle the paperwork and management. These agreements cannot be sold unless the buyer gets a copy within a reasonable time. The selling company must show it has enough money to keep its promises — either by having an insurance policy to back up the agreements, or by the company (or its parent company) having at least 100 million dollars in net worth and being able to prove it with financial documents.
407.2065. of agreements, use of or — sale of agreements — obligations to s, requirements. — 1. A may, but is not required to, use an administrator or other designee to be responsible for any and all of the administration of s in with the of sections 407.2020 to 407.2090.
2. Vehicle value protection agreements shall not be sold unless the contract holder has been or will be provided access to a copy of the vehicle value protection agreement within a reasonable time.
3. In to assure the faithful performance of the provider's obligations to its contract holders, each provider shall comply with (1) or (2) of this , as follows:
(1) In order to satisfy the requirements of this subsection under this subdivision, the provider shall insure all its vehicle value protection agreements under an insurance policy that pays or reimburses in the event the provider fails to perform its obligations under the vehicle value protection agreement and that is issued by an who is licensed, , or otherwise to do business in this state and who:
(a) Maintains and of at least fifteen million dollars; or
(b) Maintains:
a. Surplus as to policyholders and paid-in capital of less than fifteen million dollars but at least equal to ten million dollars; and
b. A ratio of , wherever written, to surplus as to policyholders and paid-in capital of not greater than three to one; or
(2) In order to satisfy the requirements of this subsection under this subdivision, the provider shall:
(a) Maintain, or together with its parent company maintain, a or of one hundred million dollars; and
(b) Upon request, provide the with a copy of the provider's or the provider's parent company's most recent or filed with the (SEC) within the last or, if the company does not file with the SEC, a copy of the company's , which show a net worth of the provider or its parent company of at least one hundred million dollars. If the provider's parent company's Form 10-K, Form 20-F, or financial statements are filed to meet the provider's , the parent company shall agree to guarantee the obligations of the provider relating to vehicle value protection agreements sold by the provider in this state.
4. Except for the requirements specified in subsection 3 of this section, no other financial security requirements shall be required for vehicle value protection agreement providers.
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Source & history notes
(L. 2023 S.B. 398)
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