Amends TCA Title 47; Title 55, Chapter 24 and Title 56.

EXTENDED WARRANTY REIMBURSEMENT POLICY<br /> <br /> This bill requires a company offering an extended warranty for a motor vehicle to have an extended warranty reimbursement insurance policy that provides that the insurer will pay to, or on behalf of, the warrantor 100 percent of all sums that the warrantor is legally obligated to pay according to the warrantor's contractual obligations under the warrantor's extended warranty.<br /> <br /> MAINTENANCE SCHEDULE COMPLIANCE<br /> <br /> This bill requires a company offering an extended warranty for a motor vehicle to provide a list and schedule of the required maintenance for the motor vehicle that must be followed by the warranty holder to maintain the extended warranty policy. The list and schedule must be provided at the time of purchase of the extended warranty. If the extended warranty is voided, including due to the warranty holder's failure to comply with the maintenance schedule described in this provision, then the warrantor must refund all premiums paid by the warranty holder up to the date that the extended warranty is voided.<br /> <br /> RECORDKEEPING<br /> <br /> This bill requires a warrantor to keep accurate accounts, books, and records concerning transactions regulated under this bill. The accounts, books, and records the warrantor is required to keep under this provision include: a copy of each extended warranty policy entered into by the warrantor; the name and address of the warranty holder; and the dates, amounts, and descriptions of all receipts, claims, and expenditures.<br /> <br /> A warrantor must retain the accounts, books, and records for at least two years after the specified period of coverage has expired. A warrantor discontinuing business in this state must maintain the accounts, books, and records until the warrantor furnishes to the commissioner of commerce and insurance ("commissioner") satisfactory proof that the warrantor has discharged all obligations to its warranty holders in this state.<br /> <br /> A warrantor must make all accounts, books, and records concerning transactions regulated under this bill available to the commissioner for examination.<br /> <br /> EXAMINATION BY COMMISSIONER<br /> <br /> This bill authorizes the commissioner to conduct an examination of a warrantor, administrator for a warrantor, or another appropriate individual to enforce this bill. Upon request of the commissioner, a warrantor must make available to the commissioner all accounts, books, and records concerning extended warranties sold by the warrantor that are necessary to enable the commissioner to reasonably determine compliance or noncompliance with this bill.<br /> <br /> A warrantor, administrator for a warrantor, or another appropriate individual who is examined must pay the appropriate and reasonable costs incurred by the commissioner during the examination. The compensation must be fixed at a reasonable amount, commensurate with usual compensation for like services, and must be contracted for in accordance with applicable state contracting procedures, if applicable.<br /> <br /> VIOLATIONS<br /> <br /> If a warrantor or individual violates this bill and the commissioner reasonably believes the violation threatens to cause irreparable loss or injury to the property or business of an individual or entity located in this state, this bill authorizes the commissioner to issue the following:<br /> <br /> (1) An order directed to the warrantor to cease and desist from engaging in further acts, practices, or transactions that are causing the conduct;<br /> <br /> (2) An order prohibiting the warrantor from selling, or offering for sale, an extended warranty in violation of this bill;<br /> <br /> (3) An order imposing a civil penalty on the warrantor; or<br /> <br /> (4) A combination of the orders described in (1)-(3) above.<br /> <br /> This bill authorizes the commissioner to bring an action in a court of competent jurisdiction for the following:<br /> <br /> (1) An injunction;<br /> <br /> (2) To enjoin a threatened or existing violation of this bill or rules promulgated pursuant to this bill; or<br /> <br /> (3) Restitution on behalf of an individual or entity aggrieved by a violation of this bill.<br /> <br /> Additionally, this bill provides that a warrantor or individual who is found to have violated this bill may be ordered to pay a civil penalty in an amount determined by the commissioner, not to exceed $5,000 per violation.<br />