Rep. Norm Thurston — Voting Record

Bill

Number

S.B. 216 Second Substitute (2023GS)

Sponsor

Sen. Harper, W.

Final action

Governor Signed 3/23/2023

Outcome

Became law — signed by Gov. Spencer J. Cox

Summary

What it does

• This bill:
• defines terms;
• allows a person to enter into a vehicle value protection agreement under certain circumstances;
• details requirements for cancellation of a vehicle value protection agreement;
• requires the provider of a benefit under a vehicle value protection agreement to:
• obtain contract liability insurance for the vehicle value protection agreement;
• provide other security for payment under the vehicle value protection agreement; or
• maintain a certain net worth;
• authorizes the Division of Consumer Protection (division) to enforce vehicle value protection agreement requirements;
• requires the insurer under a contract liability insurance policy for a vehicle value protection agreement and a provider of a vehicle value protection agreement to provide certain information to the division;
• provides fines and civil penalties for a violation of vehicle value protection agreement requirements;
• requires fines and civil penalties received by the division for a violation to be placed in the Consumer Protection Education and Training Fund;
• provides administrative rulemaking authority; and
• makes technical and conforming changes.

Every vote on this bill

Bill text

VEHICLE VALUE PROTECTION AGREEMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Wayne A. Harper
House Sponsor: 
A. Cory Maloy
LONG TITLE
General Description:
This bill addresses vehicle value protection agreements.
Highlighted Provisions:
This bill:
▸ defines terms;
▸ allows a person to enter into a vehicle value protection agreement under certain
circumstances;
▸ details requirements for cancellation of a vehicle value protection agreement;
▸ requires the provider of a benefit under a vehicle value protection agreement to:
• obtain contract liability insurance for the vehicle value protection agreement;
• provide other security for payment under the vehicle value protection
agreement; or
• maintain a certain net worth;
▸ authorizes the Division of Consumer Protection (division) to enforce vehicle value
protection agreement requirements;
▸ requires the insurer under a contract liability insurance policy for a vehicle value
protection agreement and a provider of a vehicle value protection agreement to
provide certain information to the division;
▸ provides fines and civil penalties for a violation of vehicle value protection
agreement requirements;
▸ requires fines and civil penalties received by the division for a violation to be placed
in the Consumer Protection Education and Training Fund;
▸ provides administrative rulemaking authority; and
▸ makes technical and conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
This bill provides a special effective date.
Utah Code Sections Affected:
AMENDS:
13-2-1
 (Superseded 12/31/23)
, as last amended by Laws of Utah 2022, Chapter 201
13-2-1
 (Effective 12/31/23)
, as last amended by Laws of Utah 2022, Chapters 201, 462
ENACTS:
13-63-101
, Utah Code Annotated 1953
13-63-201
, Utah Code Annotated 1953
13-63-202
, Utah Code Annotated 1953
13-63-203
, Utah Code Annotated 1953
13-63-301
, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
13-2-1 (Superseded 12/31/23)
 is amended to read:
13-2-1 (Superseded 12/31/23).
Consumer protection division established --
Functions.
(1) There is established within the Department of Commerce the Division of Consumer
Protection.
(2) The division shall administer and enforce the following:
(a) Chapter 5, Unfair Practices Act;
(b) Chapter 10a, Music Licensing Practices Act;
(c) Chapter 11, Utah Consumer Sales Practices Act;
(d) Chapter 15, Business Opportunity Disclosure Act;
(e) Chapter 20, New Motor Vehicle Warranties Act;
(f) Chapter 21, Credit Services Organizations Act;
(g) Chapter 22, Charitable Solicitations Act;
(h) Chapter 23, Health Spa Services Protection Act;
(i) Chapter 25a, Telephone and Facsimile Solicitation Act;
(j) Chapter 26, Telephone Fraud Prevention Act;
(k) Chapter 28, Prize Notices Regulation Act;
(l) Chapter 32a, Pawnshop, Secondhand Merchandise, and Catalytic Converter
Transaction Information Act;
(m) Chapter 34, Utah Postsecondary Proprietary School Act;
(n) Chapter 34a, Utah Postsecondary School State Authorization Act;
(o) Chapter 41, Price Controls During Emergencies Act;
(p) Chapter 42, Uniform Debt-Management Services Act;
(q) Chapter 49, Immigration Consultants Registration Act;
(r) Chapter 51, Transportation Network Company Registration Act;
(s) Chapter 52, Residential Solar Energy Disclosure Act;
(t) Chapter 53, Residential, Vocational and Life Skills Program Act;
(u) Chapter 54, Ticket Website Sales Act;
(v) Chapter 56, Ticket Transferability Act; [
and
]
(w) Chapter 57, Maintenance Funding Practices Act[
.
]
; and
(x) Chapter 63, Vehicle Value Protection Agreement Act.
Section 2. Section 
13-2-1 (Effective 12/31/23)
 is amended to read:
13-2-1 (Effective 12/31/23).
Consumer protection division established --
Functions.
(1) There is established within the Department of Commerce the Division of Consumer
Protection.
(2) The division shall administer and enforce the following:
(a) Chapter 5, Unfair Practices Act;
(b) Chapter 10a, Music Licensing Practices Act;
(c) Chapter 11, Utah Consumer Sales Practices Act;
(d) Chapter 15, Business Opportunity Disclosure Act;
(e) Chapter 20, New Motor Vehicle Warranties Act;
(f) Chapter 21, Credit Services Organizations Act;
(g) Chapter 22, Charitable Solicitations Act;
(h) Chapter 23, Health Spa Services Protection Act;
(i) Chapter 25a, Telephone and Facsimile Solicitation Act;
(j) Chapter 26, Telephone Fraud Prevention Act;
(k) Chapter 28, Prize Notices Regulation Act;
(l) Chapter 32a, Pawnshop, Secondhand Merchandise, and Catalytic Converter
Transaction Information Act;
(m) Chapter 34, Utah Postsecondary Proprietary School Act;
(n) Chapter 34a, Utah Postsecondary School State Authorization Act;
(o) Chapter 41, Price Controls During Emergencies Act;
(p) Chapter 42, Uniform Debt-Management Services Act;
(q) Chapter 49, Immigration Consultants Registration Act;
(r) Chapter 51, Transportation Network Company Registration Act;
(s) Chapter 52, Residential Solar Energy Disclosure Act;
(t) Chapter 53, Residential, Vocational and Life Skills Program Act;
(u) Chapter 54, Ticket Website Sales Act;
(v) Chapter 56, Ticket Transferability Act;
(w) Chapter 57, Maintenance Funding Practices Act; [
and
]
(x) Chapter 61, Utah Consumer Privacy Act[
.
]
; and
(y) Chapter 63, Vehicle Value Protection Agreement Act.
Section 3. Section 
13-63-101
 is enacted to read:
CHAPTER 63. VEHICLE VALUE PROTECTION AGREEMENT ACT
Part 1. General Provisions
 13-63-101.
Definitions.
As used in this chapter:
(1) "Administrative functions" means the same as that term is defined in Section
31A-6b-102
.
(2) "Agreement administrator" means a person who provides administrative functions
related to a vehicle value protection agreement.
(3) "Covered vehicle" means a vehicle that is covered under a vehicle value protection
agreement.
(4) "Division" means the Division of Consumer Protection established in Section
13-2-1
.
(5) "Finance agreement" means the same as that term is defined in Section
31A-6b-102
.
(6) "Insurer" means the same as that term is defined in Section 
31A-1-301
.
(7) "Preliminary period" means a time period that:
(a) begins the day on which the vehicle value protection agreement becomes effective;
and
(b) ends the last day on which the purchaser may cancel the vehicle value protection
agreement with a full refund.
(8) "Provider" means a person who is obligated to provide a benefit to another person
under a vehicle value protection agreement.
(9) "Purchaser" means a person who purchases a benefit from another person under a
vehicle value protection agreement.
(10) "Security" means the same as that term is defined in Section 
31A-1-301
.
(11) "Vehicle" means the same as that term is defined in Section 
31A-6b-102
.
(12) (a) "Vehicle value protection agreement" means an agreement for a separate
charge between a provider and purchaser under which the provider agrees to, upon damage,
total loss, or unrecovered theft of the purchaser's covered vehicle, provide a benefit to the
purchaser that may be applied to:
(i) the cash value of the covered vehicle when traded in for a replacement vehicle;
(ii) the finance agreement for a replacement vehicle; or
(iii) the purchase or lease price of a replacement vehicle.
(b) "Vehicle value protection agreement" includes:
(i) a vehicle trade-in agreement;
(ii) a vehicle diminished value agreement;
(iii) a vehicle cash down payment protection agreement; and
(iv) a vehicle depreciation benefit agreement.
(c) "Vehicle value protection agreement" does not include:
(i) insurance or an insurance contract regulated under Title 31A, Insurance Code;
(ii) a guaranteed asset protection waiver, as defined in Section 
31A-6b-102
;
(iii) a debt cancellation agreement, as defined in Section 
31A-21-109
; or
(iv) a debt suspension contract, as defined in Section 
31A-21-109
.
Section 4. Section 
13-63-201
 is enacted to read:
Part 2. Vehicle Value Protection Agreements
 13-63-201.
Vehicle value protection agreement -- Required disclosures -- Finance
agreement conditions.
(1) A person may not issue, sell, offer to sell, or otherwise provide a vehicle value
protection agreement that does not comply with this chapter.
(2) A vehicle value protection agreement shall conspicuously disclose:
(a) the name, address, and contact information of:
(i) the provider;
(ii) the agreement administrator, if any; and
(iii) the purchaser;
(b) the terms of the vehicle value protection agreement, including:
(i) the charges under the vehicle value protection agreement;
(ii) the benefit eligibility requirements;
(iii) the conditions imposed by the vehicle value protection agreement; and
(iv) the procedure a purchaser is required to follow to obtain the benefit; and
(c) subject to Subsection (3), the terms or restrictions governing cancellation of the
vehicle value protection agreement, including:
(i) that the purchaser may cancel the vehicle value protection agreement during the
preliminary period;
(ii) the length of the preliminary period;
(iii) the purchaser's right to a refund for cancellation under Section 
13-63-203
; and
(iv) the methodology for calculating any refund to the purchaser for cancellation.
(3) The disclosure described in Subsection (2)(c)(i) shall:
(a) be written in dark bold with at least 12-point type on the first page of the vehicle
value protection agreement; and
(b) read as follows: "IN ACCORDANCE WITH UTAH CODE SECTION 
13-63-203
,
YOU, THE PURCHASER, MAY CANCEL THIS AGREEMENT AT ANY TIME BEFORE
THE END OF THE PRELIMINARY PERIOD DESCRIBED IN THIS AGREEMENT."
(4) The provider shall provide the purchaser a copy of the vehicle value protection
agreement at the time the provider and purchaser enter into the vehicle value protection
agreement.
(5) A finance agreement or vehicle purchase agreement may not be conditioned on a
purchaser entering into a vehicle value protection agreement.
Section 5. Section 
13-63-202
 is enacted to read:
 13-63-202.
Liability insurance -- Security for payment -- Provider net worth
value.
(1) A provider under a vehicle value protection agreement shall:
(a) insure all vehicle value protection agreements the provider enters into under a
contractual liability insurance policy that:
(i) (A) is issued by an insurer authorized to do business in this state that has a surplus
as to policyholders and paid-in capital of less than $10,000,000 and more than $5,000,000 and
provides evidence to the division that the insurer maintains a ratio of net written premiums to
surplus as to policyholders and paid-in capital of not greater than three to one; or
(B) is issued by an insurer authorized to do business in this state that has as a surplus as
to policyholders and paid-in capital of more than $10,000,000; and
(ii) (A) requires the insurer to reimburse the purchaser if the provider fails to perform
the provider's obligations under a vehicle value protection agreement;
(B) covers any amount the provider is required to pay for failure to perform under a
vehicle value protection agreement; and
(C) allows a purchaser to file with the insurer a claim for reimbursement under the
vehicle value protection agreement if the provider does not pay the purchaser within 60 days
after the day on which proof of damage, total loss, or unrecovered theft of the covered vehicle
is provided to the provider in accordance with the terms of the vehicle value protection
agreement;
(b) (i) maintain a funded reserve account to cover the provider's obligations under all
vehicle value protection agreements the provider enters into that is equal to or greater than 40%
of money received by, less claims paid to, the provider for the vehicle value protection
agreements; and
(ii) place in trust with the division a security that is equal to at least 5% of money
received by, less claims paid to, the provider for all vehicle value protection agreements the
provider enters into and more than $25,000; or
(c) maintain, or together with the provider's parent company maintain, a net worth or
stockholders' equity of $100,000,000.
(2) (a) An insurer described in Subsection (1)(a) shall annually file with the division:
(i) a copy of the insurer's audited financial statements;
(ii) the insurer's National Association of Insurance Commissioner annual statement;
and
(iii) the actuarial certification filed in the insurer's state of domicile.
(b) The division may examine a reserve account described in Subsection (1)(b).
(c) A provider shall, upon request, provide the division a copy of:
(i) 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; or
(ii) if the provider does not file with the Securities and Exchange Commission, a copy
of the provider's audited financial statements that shows the net worth of the provider or the
provider's parent company.
Section 6. Section 
13-63-203
 is enacted to read:
 13-63-203.
Preliminary period -- Cancellation -- Refund.
(1) (a) A vehicle value protection agreement shall provide for a preliminary period of
at least 30 days.
(b) If a purchaser cancels a vehicle value protection agreement within the preliminary
period, the purchaser is entitled to a refund of the charges under the vehicle value protection
agreement as follows:
(i) if benefits have not been provided, a full refund; or
(ii) if benefits have been provided, a refund to the extent provided for in the vehicle
value protection agreement.
(2) (a) Except as provided in Subsection (2)(b), if a provider cancels a vehicle value
protection agreement, the provider shall mail a written notice to the purchaser at least five days
before the day on which the vehicle value protection agreement is canceled.
(b) A provider may immediately cancel a vehicle value protection agreement upon
sending a notice of cancellation to the purchaser if the reason for the cancellation is:
(i) the purchaser's failure to pay the provider's fee under the vehicle value protection
agreement; or
(ii) the purchaser's breach of the purchaser's duties relating to the covered vehicle.
(3) A notice described in Subsection (2) shall include:
(a) the effective date of the cancellation; and
(b) the reason for the cancellation.
(4) If a provider cancels a vehicle value protection agreement for a reason other than
the purchaser's failure to pay the provider's fee under the vehicle value protection agreement,
the provider:
(a) shall refund the purchaser any unearned provider fee under the vehicle value
protection agreement;
(b) may charge the purchaser an administrative fee of up to $75; and
(c) may deduct the amount of a benefit paid under the vehicle value protection
agreement from the refund.
Section 7. Section 
13-63-301
 is enacted to read:
Part 3. Enforcement
 13-63-301.
Administration and enforcement -- Division powers -- Fees --
Rulemaking.
(1) The division shall administer and enforce this chapter in accordance with Chapter
2, Division of Consumer Protection.
(2) In addition to the division's enforcement powers under Chapter 2, Division of
Consumer Protection:
(a) the division director may impose an administrative fine of up to $2,500 for each act
that is in violation of this chapter, including failure to insure or consider a vehicle value
protection agreement as required under Subsection 
13-63-202
(1); and
(b) the division may bring a civil action to enforce this chapter.
(3) In a civil action by the division to enforce this chapter, the court may:
(a) declare that an act or practice violates this chapter;
(b) issue an injunction for a violation of this chapter;
(c) order disgorgement of any money received after a violation of this chapter;
(d) order payment of disgorged money to an injured individual;
(e) impose a civil penalty of up to $2,500 for each violation of this chapter; or
(f) award any other relief that the court deems reasonable and necessary.
(4) If a court grants judgment or injunctive relief to the division, the court shall award
the division:
(a) reasonable attorney fees;
(b) court costs; and
(c) investigative fees.
(5) (a) A person who violates an administrative or court order issued for a violation of
this chapter is subject to a civil penalty of no more than $5,000 for each violation.
(b) A civil penalty authorized under this section may be imposed in any civil action
brought by the division.
(c) The division shall deposit money received for the payment of a fine or civil penalty
under this section into the Consumer Protection Education and Training Fund created in
Section 
13-2-8
.
(6) The division may make rules in accordance with Title 63G, Chapter 3, Utah
Administrative Rulemaking Act, to administer and enforce this chapter.
Section 8. 
Effective date.
(1) Except as provided in Subsection (2), this bill takes effect on May 3, 2023.
(2) The amendments to Section 
13-2-1
 (Effective 12/31/23) take effect on December
31, 2023.