In today’s fast-paced world, companies offering voluntary protection products such as vehicle service contracts are under increasing pressure to maintain high standards of quality, safety, and compliance. To help ensure these standards, many states require annual licenses and renewals for companies offering vehicle service contracts and other finance and insurance products. Some states even require companies to submit information about all contract forms for products included in vehicle service contracts (VSCs).
Following are a list of the latest licensing requirements from a variety of states.
Iowa Senate File 2362: New Licensure Requirements for 2024
Recent legislation in Iowa has updated the Iowa Code regarding service provider license renewal form approval and consumer contract cancellations. Effective July 1, 2024, service companies must:
- Obtain licensure from the Iowa Commissioner of Insurance and renew annually
- Submit new vehicle service contracts to the commissioner at $35 per form submission.
- Notify the state of any changes to the terms or language of a service contract before it can be used.
Texas Occupations Code Chapter 1304: Service Contract
Regulatory Act
The Texas Department of Licensing and Regulation oversees Chapter 1304 of the Texas Occupations Code, which regulates service contract providers and administrators. Known as the Service Contract Regulatory Act, it includes several subchapters detailing general provisions, registration requirements, disciplinary actions, and more.
- Service contract administrators must register with the TDLR
- If a service contract provider administers its own contracts, no separate administrator registration is needed
- Motor vehicle dealers who sell their own service contracts, and are contractually and financially responsible for them, must register with TDLR.
The initial registration fee for providers and administrators is $250, with tiered pricing for renewals. More details can be found on the TDLR’s one-pager.
Florida Statutes Chapter 634: Motor Vehicle Service Agreements
Managed by the Florida Office of Insurance Regulation, Chapter 634 defines motor vehicle service agreements and outlines registration requirements, renewal information, and additional actions.
- Companies cannot “transact, administer, or market” service agreements in Florida without a license from the Office of Insurance Regulation.
- After initial registration, companies must renew their license annually at a $100 fee.
- Companies must submit annual financial reports with the information requested by the Office of Insurance Regulation.
How F&I Sentinel Can Help with Compliance
Keeping track of annual licensure requirements and contract provisions can be a daunting task for auto lenders and dealers. That’s where F&I Sentinel comes in. We verify that product companies submitting forms to our database of over 120,000 compliance F&I products are also approved, acknowledged, or filed in the states where they operate.
The information provided in this post does not, and is not intended to, constitute legal advice; instead, all information, content, and materials referenced are for general informational purposes only. Readers should contact their attorney to obtain advice with respect to any particular legal matter.
