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SPONSOR: | Leavell | DATE TYPED: | 02/18/01 | HB | |||
SHORT TITLE: | Service Contract Regulation Act | SB | 556/aSCORC | ||||
ANALYST: | Wilson |
Recurring
or Non-Rec |
Fund
Affected | ||||
FY01 | FY02 | FY01 | FY02 | ||
See Narrative |
(Parenthesis ( ) Indicate Expenditure Decreases)
Subsequent
Years Impact |
Recurring
or Non-Rec |
Fund
Affected | ||
FY01 | FY02 | |||
$ 50.0 | $ 50.0 | Recurring | General Fund |
(Parenthesis ( ) Indicate Revenue Decreases)
SOURCES OF INFORMATION
Public Regulation Commission (PRC)
Attorney General's Office (AG)
SUMMARY
Synopsis of SCORC Amendment
The SCORC clarifies the bill by adding the "contractually" in front of obligated to better define the meaning of "provider."
Synopsis of Original Bill
SB556 imposes restrictions and requirements on the sale of service contracts and the terms of the contracts. SB556 provides rights for consumers including rights of cancellation. SB556 authorizes the superintendent of insurance to administer the Act, to promulgate rules and regulations, and to
enforce the act against issuers who violate the Act. SB566 imposes financial security requirements on issuers and establishes civil penalties which may be imposed by the superintendent for violations.
Significant Issues
The AG notes that this is a new and comprehensive regulatory approach to the business of service contracts.
FISCAL IMPLICATIONS
There is an annual registration fee of $500. The PRC estimates that there will be approximately 100 registrants thereby generating $50,00 in revenues.
ADMINISTRATIVE IMPLICATIONS
The PRC will have to establish registration requirements and monitor compliance. They do not request additional staff or resources.
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