FL H0339

Allows motor vehicle service agreement companies to secure contractual liability insurance in place of maintaining an unearned premium reserve, with insurance covering 100 percent of claim exposure and obtained from approved insurers or risk retention groups maintaining at least $15 million surplus.

Requires contractual liability insurance policies to cover all legitimate claims and cancellation refunds for service agreements issued while the policy is in effect, including agreements with no premium remitted to the insurer.

Permits service agreement companies offering vehicle protection expenses to meet licensing requirements solely through contractual liability insurance issued by non-affiliated insurance companies (with exception for policies issued on or before January 1, 2002), and restricts sales to holders with active comprehensive motor vehicle insurance.

Allows cancellations initiated by lenders, finance companies, or creditors after 60 days in effect, but only if authorized by the service agreement terms, with agreement holders entitled to at least 90 percent refund of unearned pro rata premium.

Takes effect July 1, 2017.