Bill > HSB517

Introduced Session

This bill relates to the licensing of service companies, motor vehicle service contracts, and residential service contracts. The bill prohibits a person that will be contractually obligated to a service contract holder under the terms of a service contract from issuing, offering for sale, or selling a motor vehicle service contract or residential service contract in the state unless the person is a licensed service company. The requirements of the bill do not apply to any person who S.F. _____ H.F. _____ provides support services. “Support services” is defined in the bill. A service company shall maintain a license for the entirety of any service contract that the service company has entered. A service company shall report to the commissioner of insurance (commissioner) within 30 calendar days any material change to the information submitted in the initial or renewal application, within 30 days of any administrative action taken against the service company, and within 30 days of the initial pretrial hearing date in a criminal prosecution against the service company as detailed in the bill. An application for a license as a service company shall be filed with the commissioner, include all information as described in the bill, and be accompanied by a $500 license fee and a $35 fee for each motor vehicle service contract form provided by the service company in the application. A license as a service company is valid for one year and must be renewed annually on or before August 31 of each year following the date of issuance. An application for license renewal shall include the information required for an initial license, a list of each service contract form, any additional information requested by the commissioner to verify the information in the renewal application, and the information and fees as described in the bill. If the renewal application meets the requirements, the commissioner shall renew the license unless otherwise denied, in which case the denial shall be in writing. If a service company fails to renew their license on or before the end of the license period, the company’s license shall be deemed expired, and the service company shall be subject to restrictions detailed in the bill. Prior to a license expiration date, and if a renewal application was submitted at least 14 days prior to the license expiration date, the commissioner may extend the renewal period an additional 30 calendar days. If a service company submits S.F. _____ H.F. _____ an application or renewal application after the license has expired, the service company shall file a service company license renewal application, including payment of applicable fees. A service contract shall not be issued, sold, or offered for sale unless the service company complies with the requirements of the bill. A paper copy of the sample copy or the service contract shall be provided upon the consumer’s request at the expense of the service company. A service contract issued, sold, or offered for sale in the state shall comply with all of the requirements described in the bill. The requirements for a residential service contract that relates to goods that are essential to the health and safety of the service contract holder are detailed in the bill. A service company may continue to use a noncompliant service contract form until August 31, 2027, provided no changes are made to the form, and the service contract form was filed with the division in 2026. The commissioner may suspend or revoke the license of, deny an application for license from, or refuse to renew the license of a service company, or may levy a civil penalty against a service company, as described in the bill, and shall notify the service company in writing of the reason for the suspension, revocation, nonrenewal, or denial. The licensee or applicant may request a hearing. A service company that offers service contracts for sale, or the service company’s support services, shall not represent in any manner a false, deceptive, or misleading statement with respect to the service company’s affiliation with a motor vehicle manufacturer or importer, the validity or expiration of a warranty, or a motor vehicle service contract holder’s coverage under a motor vehicle service contract, and shall not describe the service contract as a policy. A service company shall not engage in a prohibited act or practice as detailed in the bill. The commissioner S.F. _____ H.F. _____ may adopt rules regulating service contracts to prohibit misrepresentation, false advertising, defamation, boycotts, coercion, intimidation, false statements and entries, and unfair discrimination or practices. If the commissioner finds that a person has violated rules adopted under the bill, the commissioner may order payment of a civil penalty as described in the bill, or suspend or revoke a service company’s license. Under the bill, a person shall not engage in any unfair method of competition, or an unfair or deceptive act or practice, in the service contract business. A written explanation to a service contract holder for a denial of a claim or offer of a settlement shall include the information detailed in the bill. The commissioner shall maintain the confidentiality of information submitted to the division or obtained by the division in the course of an investigation, examination, or inquiry, including all notes, work papers, or other documents and the information as described in the bill. The commissioner may disclose or release information that is otherwise confidential in the circumstances detailed in the bill. The bill repeals Code section 523C.19 (cease and desist orders).

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Other Sponsors (1)

Committee report approving bill, renumbered as HF 2714. (on 02/24/2026)

Official Document