Section 407.2065

Title XXVI TRADE AND COMMERCE

Chapter 407

Effective - 28 Aug 2023   

  407.2065.  Administration of agreements, use of administrator or designee — sale of agreements — obligations to contract holders, requirements. — 1.  A provider may, but is not required to, use an administrator or other designee to be responsible for any and all of the administration of vehicle value protection agreements in compliance with the provisions of sections 407.2020 to 407.2090.

  2.  Vehicle value protection agreements shall not be sold unless the contract holder has been or will be provided access to a copy of the vehicle value protection agreement within a reasonable time.

  3.  In order to assure the faithful performance of the provider's obligations to its contract holders, each provider shall comply with subdivision (1) or (2) of this subsection, as follows:

  (1)  In order to satisfy the requirements of this subsection under this subdivision, the provider shall insure all its vehicle value protection agreements under an insurance policy that pays or reimburses in the event the provider fails to perform its obligations under the vehicle value protection agreement and that is issued by an insurer who is licensed, registered, or otherwise authorized to do business in this state and who:

  (a)  Maintains surplus as to policyholders and paid-in capital of at least fifteen million dollars; or

  (b)  Maintains:

  a.  Surplus as to policyholders and paid-in capital of less than fifteen million dollars but at least equal to ten million dollars; and

  b.  A ratio of net-written premiums, wherever written, to surplus as to policyholders and paid-in capital of not greater than three to one; or

  (2)  In order to satisfy the requirements of this subsection under this subdivision, the provider shall:

  (a)  Maintain, or together with its parent company maintain, a net worth or stockholders' equity of one hundred million dollars; and

  (b)  Upon request, provide the attorney general with a copy of the provider's or the provider's parent company's most recent Form 10-K or Form 20-F filed with the Securities and Exchange Commission (SEC) within the last calendar year or, if the company does not file with the SEC, a copy of the company's audited financial statements, which show a net worth of the provider or its parent company of at least one hundred million dollars.  If the provider's parent company's Form 10-K, Form 20-F, or financial statements are filed to meet the provider's financial security requirement, the parent company shall agree to guarantee the obligations of the provider relating to vehicle value protection agreements sold by the provider in this state.

  4.  Except for the requirements specified in subsection 3 of this section, no other financial security requirements shall be required for vehicle value protection agreement providers.

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(L. 2023 S.B. 398)