Bill > H0367

This bill modifies financial requirements and regulations for home and service warranty associations in Florida, focusing on how these organizations manage their insurance and premium reserves. The bill allows home and service warranty associations to avoid setting up unearned premium reserves if they purchase specific types of contractual liability insurance that covers 100% of their claim exposure. The contractual liability policies must include provisions ensuring that if the association cannot fulfill its obligations due to insolvency, bankruptcy, or dissolution, the insurance will directly pay losses and unearned premiums to claimants. The bill also permits these associations to exceed standard premium-to-net-assets ratios under certain conditions, such as maintaining specific net asset levels, obtaining insurance from financially robust insurers, and meeting rating requirements from agencies like A.M. Best Company. Additionally, the bill requires that service warranty contracts including accidental damage coverage must be covered by contractual liability policies, with some exceptions for associations not required to maintain such insurance. These changes aim to provide more financial flexibility for warranty associations while ensuring consumer protection through robust insurance requirements. The bill is set to take effect on July 1, 2025.

Business and Industry

Commerce Committee (House), Insurance & Banking Subcommittee (House)

https://www.flsenate.gov/Session/Bill/2025/367