HOUSE BILL REPORT

SSB 5779

As Amended by the House

BYSenate Committee on Financial Institutions (originally sponsored by Senators Vognild, Bender, Sellar, Wojahn, McCaslin, Metcalf, Rasmussen, Zimmerman and Garrett)

Regulating vehicle mechanical breakdown insurers.

House Committe on Financial Institutions & Insurance

Majority Report:  Do pass with amendments.  (13)

      Signed by Representatives Lux, Chair; Zellinsky, Vice Chair; Betrozoff, Chandler, Crane, Day, Dellwo, Ferguson, Meyers, Niemi, Nutley, Silver and Winsley.

House Staff:John Conniff (786-7119)

AS PASSED HOUSE APRIL 7, 1987

BACKGROUND:

Many dealers offer warranties developed and administered by third parties.  These warranties are often motor vehicle service contracts for parts and labor.

SUMMARY:

No motor vehicle service contract may be sold or offered in this state unless the provider of the service contract has a reimbursement insurance policy issued by an authorized insurer.

The service contract must contain a conspicuous statement indicating the obligations of the provider, the existence of the reimbursement policy, the policy number and information as to how a claim may be made.

A violation of the act constitutes a violation of the Consumer Protection Act.

Fiscal Note:      Requested.

House Committee ‑ Testified For:    Senator Vognild; Scott Jarvis, Insurance Commissioner's Office, and Jim Boldt, Automobile Dealers.

House Committee - Testified Against:      None Presented.

House Committee - Testimony For:    Many consumers who have purchased motor vehicle service contracts encounter problems in obtaining service or reimbursement for services under such contracts.  In some instances, the company or person who provided the contract is no longer in business and thus, the consumer has paid for services that will never be provided.

House Committee - Testimony Against:      None Presented.