Required warranty reimbursement insurance policy

No vehicle protection product shall be sold or offered for sale in this state unless the vehicle protection product warrantor is insured under warranty insurance policy meeting the following conditions in order to ensure adequate performance under the warranty: (1) The warranty reimbursement insurance policy is issued by an insurer authorized to do business in this state and 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 649 33-34A-6 warrantor’s contractual obligations under the warrantor’s vehicle protection product warranty; (2) A true and correct copy of the warranty reimbursement insurance policy has been filed with the Commissioner by the warrantor; and (3) The policy contains the provision required in Code Section 33-34A-6. No other financial security requirements or financial standards for warrantors shall be required. History. — Code 1981, § 33-34A-5, enacted by Ga. L. 2003, p. 644, § 1. 33-34A-6. Conditions for warranty reimbursement insurance policies. No warranty reimbursement insurance policy shall be issued, sold, or offered for sale in this state unless the policy meets the following conditions: (1) The policy states that the issuer of the policy will reimburse or pay on behalf of the vehicle protection product warrantor all covered sums which the warrantor is legally obligated to pay or will provide that all service that the warrantor is legally obligated to perform according to the warrantor’s contractual obligations under the provisions of the insured warranties sold by the warrantor; (2) The policy states that in the event payment due under the terms of the warranty is not provided by the warrantor within 60 days after proof of loss has been filed according to the terms of the warranty by the warranty holder, the warranty holder may file directly with the warranty reimbursement insurance company for reimbursement; (3) The policy provides that a warranty reimbursement insurance company that insures a warranty shall be deemed to have received payment of the premium if the warranty holder paid for the vehicle protection product and insurer’s liability under the policy shall not be reduced or relieved by a failure of the warrantor, for any reason, to report the issuance of a warranty to the insurer; and (4) The policy has the following provisions regarding cancellation of the policy: (A) The issuer of a reimbursement insurance policy shall not cancel such policy until a notice of cancellation in writing has been mailed or delivered to the Commissioner and each insured warrantor; 650 33-34A-7 (B) The cancellation of a reimbursement insurance policy shall not reduce the issuer’s responsibility for vehicle protection products sold prior to the date of cancellation; and (C) In the event an insurer cancels a policy that a warrantor has filed with the Commissioner, the warrantor shall do either of the following: (i) File a copy of a new policy with the Commissioner, before the termination of the prior policy, provided that there is no lapse in coverage following the termination of the prior policy; or (ii) Discontinue acting as a warrantor as of the termination date of the policy until a new policy becomes effective and is accepted by the Commissioner. History. — Code 1981, § 33-34A-6, enacted by Ga. L. 2003, p. 644, § 1. 33-34A-7. Required statements in warranty; required information to be provided to purchaser. (a) Every vehicle protection product warranty shall be written in clear, understandable language and shall be printed or typed in an easy-to-read point size and font and shall not be sold or offered for sale in the state unless the warranty: (1) Conspicuously states that the obligations of the warrantor to the warranty holder are guaranteed under a warranty reimbursement insurance policy; (2) Conspicuously states that in the event a warranty holder must make a claim against a party other than the warranty reimbursement insurance policy issuer, the warranty holder is entitled to make a direct claim against the insurer upon the failure of the warrantor to pay any claim or meet any obligation under the terms of the warranty within 60 days after proof of loss has been filed with the warrantor; (3) Conspicuously states the name and address of the issuer of the warranty reimbursement insurance policy. This information need not be preprinted on the warranty form but may be stamped on the warranty; (4) Identifies the warrantor, the seller, and the warranty holder; (5) Sets forth the total purchase price and the terms under which it is to be paid; however, the purchase price is not required to be preprinted on the vehicle protection product warranty and may be negotiated with the consumer at the time of sale; (6) Sets forth the procedure for making a claim, including a telephone number; 651 33-34A-8 (7) Conspicuously states the existence of a deductible amount, if any; (8) Specifies the payments or performance to be provided under the warranty including payments for incidental costs, the manner of calculation or determination of payments or performance, and any limitations, exceptions, or exclusions; (9) Sets forth the conditions on which substitution will be allowed; (10) Conspicuously sets forth all of the obligations and duties of the warranty holder such as the duty to protect against any further damage to the vehicle, the obligation to notify the warrantor in advance of any repair, or other similar requirements, if any; (11) Sets forth any terms, restrictions, or conditions governing transferability of the warranty, if any; and (12) Contains a disclosure that reads substantially as follows: ‘‘This agreement is a product warranty and is not insurance.’’ (b) At the time of sale, the seller or warrantor shall provide to the purchaser: (1) A copy of the vehicle protection product warranty; or (2) A receipt or other written evidence of the purchase of the vehicle protection product and a copy of the warranty within 30 days of the date of purchase. History. — Code 1981, § 33-34A-7, enacted by Ga. L. 2003, p. 644, § 1. 33-34A-8. Cancellation of vehicle protection product; written notice of cancellation. (a) No vehicle protection product may be sold or offered for sale in this state unless the vehicle protection product warranty clearly states the terms and conditions governing the cancellation of the sale and warranty, if any. (b) The warrantor may only cancel the warranty if the warranty holder does any of the following: (1) Fails to pay for the vehicle protection product; (2) Makes a material misrepresentation to the seller or warrantor; (3) Commits fraud; or (4) Substantially breaches the warranty holder’s duties under the warranty. 652 33-34A-9 (c) A warrantor canceling a warranty shall mail written notice of cancellation to the warranty holder at the last address of the warranty holder in the warrantor’s records at least 30 days prior to the effective date of the cancellation. The notice shall state the effective date of the cancellation and the reason for the cancellation. History. — Code 1981, § 33-34A-8, enacted by Ga. L. 2003, p. 644, § 1. 33-34A-9. Prohibited words in product contract; false or misleading statements prohibited; requiring as condition for loan prohibited. (a) Unless licensed as an insurance company, a vehicle protection product warrantor shall not use in its name, contracts, or literature the words ‘‘insurance,’’ ‘‘casualty,’’ ‘‘surety,’’ ‘‘mutual,’’ or any other word that is descriptive of the insurance, casualty, or surety business or that is deceptively similar to the name or description of any insurance or surety corporation or any other vehicle protection product warrantor. A warrantor may use the term ‘‘guaranty’’ or a similar word in the warrantor’s name. (b) A vehicle protection product warrantor shall not make, permit, or cause any false or misleading statements, either oral or written, in connection with the sale, offer to sell, or advertisement of a vehicle protection product. (c) A vehicle protection product warrantor shall not permit or cause the omission of any material statement in connection with the sale, offer to sell, or advertisement of a vehicle protection product, which under the circumstances should have been made in order to make the statements that were made not misleading. (d) A vehicle protection product warrantor shall not make, permit, or cause any false or misleading statements, either oral or written, about the performance required or payments that may be available under the vehicle protection product warranty. (e) A vehicle protection product warrantor shall not make, permit, or cause any statement or practice that has the effect of creating or maintaining a fraud. (f ) A bank, savings and loan association, insurance company, or other lending institution shall not require the purchase of a vehicle protection product as a condition of a loan. (g) A vehicle protection product seller or warrantor may not require as a condition of sale or financing that a retail purchaser of a motor vehicle purchase a vehicle protection product that is not installed on the motor vehicle at the time of sale. 653 History. — Code 1981, § 33-34A-9, enacted by Ga. L. 2003, p. 644, § 1. 33-34A-11