1.1                                        A bill for an act&#10;1.2     relating to commerce; regulating vehicle protection products; providing remedies &#10;1.3     and penalties;proposing coding for new law as Minnesota Statutes, chapter 59C.&#10;1.4     BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:&#10;&#10;<a id="go.0.1.0"></a>1.5         Section 1. <ins><b>[59C.01] SHORT TITLE.</b></ins>&#10;1.6     <ins>This chapter may be cited as the Vehicle Protection Product Act.</ins>&#10;&#10;<a id="go.0.2.0"></a>1.7         Sec. 2. <ins><b>[59C.02] DEFINITIONS.</b></ins>&#10;1.8         <ins>Subdivision 1.</ins> <ins><b>Terms.</b></ins> <ins>For purposes of this chapter, the terms defined in subdivision </ins>&#10;1.9     <ins>2 to 11 have the meanings given to them.</ins>&#10;1.10        <ins>Subd. 2.</ins> <ins><b>Administrator.</b></ins> <ins>"Administrator" means a third party other than the </ins>&#10;1.11    <ins>warrantor who is designated by the warrantor to be responsible for the administration </ins>&#10;1.12    <ins>of vehicle protection product warranties.</ins>&#10;1.13        <ins>Subd. 3.</ins> <ins><b>Commissioner.</b></ins> <ins>"Commissioner" means the commissioner of commerce.</ins>&#10;1.14        <ins>Subd. 4.</ins> <ins><b>Department.</b></ins> <ins>"Department" means the Department of Commerce.</ins>&#10;1.15        <ins>Subd. 5.</ins> <ins><b>Service contract.</b></ins> <ins>"Service contract" means a contract or agreement as </ins>&#10;1.16    <ins>regulated under chapter 59B.</ins>&#10;1.17        <ins>Subd. 6.</ins> <ins><b>Incidental costs.</b></ins> <ins>"Incidental costs" means expenses specified in the </ins>&#10;1.18    <ins>warranty incurred by the warranty holder related to the failure of the vehicle protection </ins>&#10;1.19    <ins>product to perform as provided in the warranty. Incidental costs may include, without </ins>&#10;1.20    <ins>limitation, insurance policy deductibles, rental vehicle charges, the difference between the </ins>&#10;1.21    <ins>actual value of the stolen vehicle at the time of theft and the cost of a replacement vehicle, </ins>&#10;1.22    <ins>sales taxes, registration fees, transaction fees, and mechanical inspection fees.</ins>&#10;2.1         <ins>Subd. 7.</ins> <ins><b>Vehicle protection product.</b></ins> <ins>"Vehicle protection product" means a vehicle </ins>&#10;2.2     <ins>protection device, system, or service that is:</ins>&#10;2.3     <ins>(1) installed on or applied to a vehicle;</ins>&#10;2.4     <ins>(2) is designed to prevent loss or damage to a vehicle from a specific cause; and</ins>&#10;2.5     <ins>(3) includes a written warranty. </ins>&#10;2.6     <ins>For purposes of this section, the term vehicle protection product includes, without </ins>&#10;2.7     <ins>limitation, alarm systems; body part marking products; steering locks; window etch </ins>&#10;2.8     <ins>products; pedal and ignition locks; fuel and ignition kill switches; and electronic, radio, </ins>&#10;2.9     <ins>and satellite tracking devices.</ins>&#10;2.10        <ins>Subd. 8.</ins> <ins><b>Vehicle protection product warranty or warranty.</b></ins> <ins>"Vehicle protection </ins>&#10;2.11    <ins>product warranty" or "warranty" means, for the purposes of this chapter, a written </ins>&#10;2.12    <ins>agreement by a warrantor that provides if the vehicle protection product fails to prevent </ins>&#10;2.13    <ins>loss or damage to a vehicle from a specific cause, that the warranty holder shall be </ins>&#10;2.14    <ins>paid specified incidental costs by the warrantor as a result of the failure of the vehicle </ins>&#10;2.15    <ins>protection product to perform pursuant to the terms of the warranty. Incidental costs may </ins>&#10;2.16    <ins>be reimbursed under the provisions of the warranty in either a fixed amount specified in </ins>&#10;2.17    <ins>the warranty or sales agreement or by the use of a formula itemizing specific incidental </ins>&#10;2.18    <ins>costs incurred by the warranty holder. </ins>&#10;2.19        <ins>Subd. 9.</ins> <ins><b>Vehicle protection product warrantor or warrantor.</b></ins> <ins>"Vehicle protection </ins>&#10;2.20    <ins>product warrantor" or "warrantor," for the purposes of this chapter, means a person who is </ins>&#10;2.21    <ins>contractually obligated to the warranty holder under the terms of the vehicle protection </ins>&#10;2.22    <ins>product warranty agreement. Warrantor does not include an authorized insurer providing a </ins>&#10;2.23    <ins>warranty reimbursement insurance policy providing a warranty reimbursement insurance </ins>&#10;2.24    <ins>policy.</ins>&#10;2.25        <ins>Subd. 10.</ins> <ins><b>Warranty holder.</b></ins> <ins>"Warranty holder" for the purposes of this chapter </ins>&#10;2.26    <ins>means the person who purchases a vehicle protection product or who is a permitted </ins>&#10;2.27    <ins>transferee.</ins>&#10;2.28        <ins>Subd. 11.</ins> <ins><b>Warranty reimbursement insurance policy.</b></ins> <ins>"Warranty reimbursement </ins>&#10;2.29    <ins>insurance policy" means a policy of insurance that is issued to the vehicle protection </ins>&#10;2.30    <ins>product warrantor to provide reimbursement to the warrantor, or to pay on behalf of the </ins>&#10;2.31    <ins>warrantor, all covered contractual obligations incurred by the warrantor under the terms </ins>&#10;2.32    <ins>and conditions of the insured vehicle protection product warranties sold by the warrantor.</ins>&#10;&#10;<a id="go.0.3.0"></a>2.33        Sec. 3. <ins><b>[59C.03] SCOPE AND EXEMPTIONS.</b></ins>&#10;2.34    <ins>(a) No vehicle protection product may be sold or offered for sale of this state unless </ins>&#10;2.35    <ins>the seller, warrantor, and administrator, if any, comply with the provisions of this chapter.</ins>&#10;3.1     <ins>(b) Vehicle protection product warrantors and related vehicle protection product </ins>&#10;3.2     <ins>sellers and warranty administrators complying with this chapter are not required to comply </ins>&#10;3.3     <ins>with and are not subject to any other provision of chapters 59B to 72.</ins>&#10;3.4     <ins>(c) Service contract providers who do not sell vehicle protection products are not </ins>&#10;3.5     <ins>subject to the requirements of this chapter and sales of vehicle protection products are </ins>&#10;3.6     <ins>exempt from the requirements of chapter 59B.</ins>&#10;3.7     <ins>(d) Warranties, indemnity agreements, and guarantees that are not provided as a part </ins>&#10;3.8     <ins>of a vehicle protection product are not subject to the provisions of this chapter.</ins>&#10;&#10;<a id="go.0.4.0"></a>3.9         Sec. 4. <ins><b>[59C.04] REGISTRATION AND FILING REQUIREMENTS OF </b></ins>&#10;3.10    <ins><b>WARRANTORS.</b></ins>&#10;3.11        <ins>Subdivision 1.</ins> <ins><b>General requirement. </b></ins> <ins> A person may not operate as a warrantor or </ins>&#10;3.12    <ins>represent to the public that the person is a warrantor unless the person is registered with </ins>&#10;3.13    <ins>the department on a form prescribed by the commissioner.</ins>&#10;3.14        <ins>Subd. 2.</ins> <ins><b>Registration records.</b></ins> <ins>A registrant shall file a warrantor registration </ins>&#10;3.15    <ins>record annually and shall update it within 30 days of any change. A registration record </ins>&#10;3.16    <ins>must contain the following information:</ins>&#10;3.17    <ins>(1) the warrantor's name, any fictitious names under which the warrantor does </ins>&#10;3.18    <ins>business in the state, principal office address, and telephone number;</ins>&#10;3.19    <ins>(2) the name and address of the warrantor's agent for service of process in the state </ins>&#10;3.20    <ins>if other than the warrantor;</ins>&#10;3.21    <ins>(3) the names of the warrantor's executive officer or officers directly responsible </ins>&#10;3.22    <ins>for the warrantor's vehicle protection product business;</ins>&#10;3.23    <ins>(4) the name, address, and telephone number of any administrators designated by </ins>&#10;3.24    <ins>the warrantor to be responsible for the administration of vehicle protection product </ins>&#10;3.25    <ins>warranties in this state;</ins>&#10;3.26    <ins>(5) a copy of the warranty reimbursement insurance policy or policies or other </ins>&#10;3.27    <ins>financial information required by section 59C.05;</ins>&#10;3.28    <ins>(6) a copy of each warranty the warrantor proposes to use in this state; and </ins>&#10;3.29    <ins>(7) a statement indicating under which provision of section 59C.05 the warrantor </ins>&#10;3.30    <ins>qualifies to do business in this state as a warrantor.</ins>&#10;3.31        <ins>Subd. 3.</ins> <ins><b>Registration fee.</b></ins> <ins>The commissioner may charge each registrant a </ins>&#10;3.32    <ins>reasonable fee to offset the cost of processing the registration and maintaining the records </ins>&#10;3.33    <ins>in an amount not to exceed $250 annually. The information in subdivision 2, clauses (1) </ins>&#10;3.34    <ins>and (2), must be made available to the public.</ins>&#10;4.1         <ins>Subd. 4.</ins> <ins><b>Renewal.</b></ins> <ins>If a registrant fails to register by the renewal deadline, the </ins>&#10;4.2     <ins>commissioner shall give them written notice of the failure and the registrant will have 30 </ins>&#10;4.3     <ins>days to complete the renewal of the registration before the commissioner suspends the </ins>&#10;4.4     <ins>registration.</ins>&#10;4.5         <ins>Subd. 5.</ins> <ins><b>Exception. </b></ins> <ins>An administrator or person who sells or solicits a sale of a </ins>&#10;4.6     <ins>vehicle protection product but who is not a warrantor shall not be required to register as a </ins>&#10;4.7     <ins>warrantor or be licensed under the insurance laws of this state to sell vehicle protection </ins>&#10;4.8     <ins>products.</ins>&#10;&#10;<a id="go.0.5.0"></a>4.9         Sec. 5. <ins><b>[59C.05] FINANCIAL RESPONSIBILITY.</b></ins>&#10;4.10    <ins>(a) No vehicle protection product may be sold, or offered for sale in this state unless </ins>&#10;4.11    <ins>the warrantor meets one of the conditions in this section in order to ensure adequate </ins>&#10;4.12    <ins>performance under the warranty. No other financial security requirements or financial </ins>&#10;4.13    <ins>standards for warrantors is required.</ins>&#10;4.14    <ins>(b) The vehicle protection product warrantor shall be insured under a warranty </ins>&#10;4.15    <ins>reimbursement insurance policy issued by an insurer authorized to do business in this </ins>&#10;4.16    <ins>state which provides that:</ins>&#10;4.17    <ins>(1) the insurer will pay to, or on behalf of the warrantor, 100 percent of all sums </ins>&#10;4.18    <ins>that the warrantor is legally obligated to pay according to the warrantor's contractual </ins>&#10;4.19    <ins>obligations under the warrantor's vehicle protection product warranty;</ins>&#10;4.20    <ins>(2) a true and correct copy of the warranty reimbursement insurance policy has been </ins>&#10;4.21    <ins>filed with the commissioner by the warrantor; and</ins>&#10;4.22    <ins>(3) the policy contains the provision required in section 59C.06.</ins>&#10;4.23    <ins>(c)(1) The vehicle protection product warrantor, or its parent company in accordance </ins>&#10;4.24    <ins>with clause (2), shall maintain a net worth or stockholders' equity of $50,000,000; and</ins>&#10;4.25    <ins>(2) the warrantor shall provide the commissioner with a copy of the warrantor's or </ins>&#10;4.26    <ins>the warrantor's parent company's most recent Form 10-K or Form 20-F filed with the </ins>&#10;4.27    <ins>Securities and Exchange Commission within the last calendar year or, if the warrantor </ins>&#10;4.28    <ins>does not file with the Securities and Exchange Commission, a copy of the warrantor or </ins>&#10;4.29    <ins>the warrantor's parent company's audited financial statements that shows a net worth of </ins>&#10;4.30    <ins>the warrantor or its parent company of at least $50,000,000. If the warrantor's parent </ins>&#10;4.31    <ins>company's Form 10-K, Form 20-F, or audited financial statements are filed to meet </ins>&#10;4.32    <ins>the warrantor's financial stability requirement, then the parent company shall agree to </ins>&#10;4.33    <ins>guarantee the obligations of the warrantor relating to warranties issued by the warrantor in </ins>&#10;4.34    <ins>this state. The financial information filed under this paragraph is confidential as a trade </ins>&#10;4.35    <ins>secret of the entity filing the information and is not subject to public disclosure.</ins>&#10;&#10;<a id="go.0.6.0"></a>5.1         Sec. 6. <ins><b>[59C.06] WARRANTY REIMBURSEMENT POLICY REQUIREMENTS.</b></ins>&#10;5.2     <ins>No warranty reimbursement insurance policy may be issued, sold, or offered for sale </ins>&#10;5.3     <ins>in this state unless the policy meets the following conditions:</ins>&#10;5.4     <ins>(1) the policy states that the issuer of the policy will reimburse, or pay on behalf </ins>&#10;5.5     <ins>of the vehicle protection product warrantor, all covered sums which the warrantor is </ins>&#10;5.6     <ins>legally obligated to pay, or will provide all service that the warrantor is legally obligated </ins>&#10;5.7     <ins>to perform according to the warrantor's contractual obligations under the provisions of the </ins>&#10;5.8     <ins>insured warranties sold by the warrantor;</ins>&#10;5.9     <ins>(2) the policy states that in the event payment due under the terms of the warranty is </ins>&#10;5.10    <ins>not provided by the warrantor within 60 days after proof of loss has been filed according </ins>&#10;5.11    <ins>to the terms of the warranty by the warranty holder, the warranty holder may file directly </ins>&#10;5.12    <ins>with the warranty reimbursement insurance company for reimbursement;</ins>&#10;5.13    <ins>(3) the policy provides that a warranty reimbursement insurance company that </ins>&#10;5.14    <ins>insures a warranty shall be deemed to have received payment of the premium if the </ins>&#10;5.15    <ins>warranty holder paid for the vehicle protection product and the insurer's liability under the </ins>&#10;5.16    <ins>policy shall not be reduced or relieved by a failure of the warrantor, for any reason, to </ins>&#10;5.17    <ins>report the issuance of a warranty to the insurer; and</ins>&#10;5.18    <ins>(4) the policy has the following provisions regarding cancellation of the policy:</ins>&#10;5.19    <ins>(i) the issuer of a reimbursement insurance policy shall not cancel the policy until a </ins>&#10;5.20    <ins>notice of cancellation in writing has been mailed or delivered to the commissioner and </ins>&#10;5.21    <ins>each insured warrantor;</ins>&#10;5.22    <ins>(ii) the cancellation of a reimbursement insurance policy shall not reduce the issuer's </ins>&#10;5.23    <ins>responsibility for vehicle protection products sold prior to the date of cancellation; and</ins>&#10;5.24    <ins>(iii) in the event an insurer cancels a policy that a warrantor has filed with the </ins>&#10;5.25    <ins>commissioner, the warrantor shall do either of the following:</ins>&#10;5.26    <ins>(A) file a copy of a new policy with the commissioner, before the termination of </ins>&#10;5.27    <ins>the prior policy, providing no lapse in coverage following the termination of the prior </ins>&#10;5.28    <ins>policy; or </ins>&#10;5.29    <ins>(B) discontinue acting as a warrantor as of the termination date of the policy until a </ins>&#10;5.30    <ins>new policy becomes effective and is accepted by the commissioner.</ins>&#10;&#10;<a id="go.0.7.0"></a>5.31        Sec. 7. <ins><b>[59C.07] DISCLOSURE TO WARRANTY HOLDER.</b></ins>&#10;5.32    <ins>(a) Every vehicle protection product warranty must be written in clear, </ins>&#10;5.33    <ins>understandable language and must be printed or typed in an easily readable type, size, and </ins>&#10;5.34    <ins>style, and must not be sold or offered for sale in this state unless the warranty:</ins>&#10;6.1     <ins>(1) states, "The obligations of the warrantor to the warranty holder are guaranteed </ins>&#10;6.2     <ins>under a warranty reimbursement insurance policy" if the warrantor elects to meet its </ins>&#10;6.3     <ins>financial responsibility obligations under section 59C.05, paragraph (b), or states "The </ins>&#10;6.4     <ins>obligations of the warrantor under this warranty are backed by the full faith and credit </ins>&#10;6.5     <ins>of the warrantor" if the warrantor elects to meet its financial responsibility obligations </ins>&#10;6.6     <ins>under section 59C.05, paragraph (c);</ins>&#10;6.7     <ins>(2) states that in the event a warranty holder must make a claim against a party other </ins>&#10;6.8     <ins>than the warranty reimbursement insurance policy issuer, the warranty holder is entitled to </ins>&#10;6.9     <ins>make a direct claim against the insurer upon the failure of the warrantor to pay any claim </ins>&#10;6.10    <ins>or meet any obligation under the terms of the warranty within 60 days after proof of loss </ins>&#10;6.11    <ins>has been filed with the warrantor, if the warrantor elects to meet its financial responsibility </ins>&#10;6.12    <ins>obligations under section 59C.05, paragraph (b);</ins>&#10;6.13    <ins>(3) states the name and address of the issuer of the warranty reimbursement </ins>&#10;6.14    <ins>insurance policy, and this information need not be preprinted on the warranty form, but </ins>&#10;6.15    <ins>may be added to or stamped on the warranty, if the warrantor elects to meet its financial </ins>&#10;6.16    <ins>responsibility obligations under section 59C.05, paragraph (b);</ins>&#10;6.17    <ins>(4) identifies the warrantor, the seller, and the warranty holder;</ins>&#10;6.18    <ins>(5) sets forth the total purchase price and the terms under which it is to be paid, </ins>&#10;6.19    <ins>however, the purchase price is not required to be preprinted on the vehicle protection </ins>&#10;6.20    <ins>product warranty and may be negotiated with the consumer at the time of sale;</ins>&#10;6.21    <ins>(6) sets forth the procedure for making a claim, including a telephone number;</ins>&#10;6.22    <ins>(7) states the existence of a deductible amount, if any;</ins>&#10;6.23    <ins>(8) specifies the payments or performance to be provided under the warranty </ins>&#10;6.24    <ins>including payments for incidental costs, the manner of calculation or determination of </ins>&#10;6.25    <ins>payments or performance, and any limitations, exceptions, or exclusions;</ins>&#10;6.26    <ins>(9) sets forth all of the obligations and duties of the warranty holder such as the duty </ins>&#10;6.27    <ins>to protect against any further damage to the vehicle, the obligation to notify the warrantor </ins>&#10;6.28    <ins>in advance of any repair, or other similar requirements, if any;</ins>&#10;6.29    <ins>(10) sets forth any terms, restrictions, or conditions governing transferability of </ins>&#10;6.30    <ins>the warranty, if any; and</ins>&#10;6.31    <ins>(11) contains a disclosure that reads substantially as follows: "This agreement is a </ins>&#10;6.32    <ins>product warranty and is not insurance."</ins>&#10;6.33    <ins>(b) At the time of sale, the seller or warrantor shall provide to the purchaser:</ins>&#10;6.34    <ins>(1) a copy of the vehicle protection product warranty; or</ins>&#10;6.35    <ins>(2) a receipt or other written evidence of the purchase of the vehicle protection </ins>&#10;6.36    <ins>product and a copy of the warranty within 30 days of the date of purchase.</ins>&#10;&#10;<a id="go.0.8.0"></a>7.1         Sec. 8. <ins><b>[59C.08] WARRANTY CANCELLATION.</b></ins>&#10;7.2     <ins>(a) No vehicle protection product may be sold or offered for sale in this state unless </ins>&#10;7.3     <ins>the vehicle protection product warranty clearly states the terms and conditions governing </ins>&#10;7.4     <ins>the cancellation of the sale and warranty, if any.</ins>&#10;7.5     <ins>(b) The warrantor may only cancel the warranty if the warranty holder:</ins>&#10;7.6     <ins>(1) fails to pay for the vehicle protection product;</ins>&#10;7.7     <ins>(2) makes a material misrepresentation to the seller or warrantor;</ins>&#10;7.8     <ins>(3) commits fraud; or</ins>&#10;7.9     <ins>(4) substantially breaches the warranty holder's duties under the warranty.</ins>&#10;7.10    <ins>(c) A warrantor cancelling a warranty shall mail written notice of cancellation to </ins>&#10;7.11    <ins>the warranty holder at the last address of the warranty holder in the warrantor's records </ins>&#10;7.12    <ins>at least 30 days before the effective date of the cancellation. The notice must state the </ins>&#10;7.13    <ins>effective date of the cancellation and the reason for the cancellation.</ins>&#10;&#10;<a id="go.0.9.0"></a>7.14        Sec. 9. <ins><b>[59C.09] PROHIBITED ACTS.</b></ins>&#10;7.15    <ins>(a) Unless licensed as an insurance company, a vehicle protection product warrantor </ins>&#10;7.16    <ins>shall not use in its name, contracts, or literature, any of the words "insurance," "casualty," </ins>&#10;7.17    <ins>"surety," "mutual," or any other words descriptive of the insurance, casualty, or surety </ins>&#10;7.18    <ins>business or deceptively similar to the name or description of any insurance or surety </ins>&#10;7.19    <ins>corporation, or any other vehicle protection product warrantor. A warrantor may use the </ins>&#10;7.20    <ins>term "guaranty" or similar word in the warrantor's name.</ins>&#10;7.21    <ins>(b) A vehicle protection product seller or warrantor may not require as a condition of </ins>&#10;7.22    <ins>sale, or financing, that a retail purchaser of a motor vehicle purchase a vehicle protection </ins>&#10;7.23    <ins>product that is not installed on the motor vehicle at the time of sale.</ins>&#10;&#10;<a id="go.0.10.0"></a>7.24        Sec. 10. <ins><b>[59C.10] RECORD KEEPING.</b></ins>&#10;7.25    <ins>(a) All vehicle protection product warrantors shall keep accurate accounts, books, </ins>&#10;7.26    <ins>and records concerning transactions regulated under this chapter.</ins>&#10;7.27    <ins>(b) A vehicle protection product warrantor's accounts, books, and records must </ins>&#10;7.28    <ins>include:</ins>&#10;7.29    <ins>(1) copies of all vehicle protection product warranties;</ins>&#10;7.30    <ins>(2) the name and address of each warranty holder; and</ins>&#10;7.31    <ins>(3) the dates, amounts, and descriptions of all receipts, claims, and expenditures.</ins>&#10;7.32    <ins>(c) A vehicle protection product warrantor shall retain all required accounts, books, </ins>&#10;7.33    <ins>and records pertaining to each warranty holder for at least two years after the specified </ins>&#10;7.34    <ins>period of coverage has expired. A warrantor discontinuing business in this state shall </ins>&#10;8.1     <ins>maintain its records until it furnishes the commissioner satisfactory proof that it has </ins>&#10;8.2     <ins>discharged all obligations to warranty holders in this state.</ins>&#10;8.3     <ins>(d) Vehicle protection product warrantors shall make all accounts, books, and records </ins>&#10;8.4     <ins>concerning transactions, regulated under this chapter available to the commissioner for </ins>&#10;8.5     <ins>examination.</ins>&#10;&#10;<a id="go.0.11.0"></a>8.6         Sec. 11. <ins><b>[59C.11] SANCTIONS; ADMINISTRATIVE PENALTY.</b></ins>&#10;8.7     <ins>(a) The commissioner may conduct examinations of warrantors, administrators, or </ins>&#10;8.8     <ins>other persons to enforce this chapter and protect warranty holders in this state. Upon </ins>&#10;8.9     <ins>request of the commissioner, a warrantor shall make available to the commissioner all </ins>&#10;8.10    <ins>accounts, books, and records concerning vehicle protection products sold by the warrantor </ins>&#10;8.11    <ins>that are necessary to enable the commissioner to reasonably determine compliance or </ins>&#10;8.12    <ins>noncompliance with this chapter.</ins>&#10;8.13    <ins>(b) The commissioner may take action that is necessary or appropriate to enforce </ins>&#10;8.14    <ins>the provisions of this chapter and the commissioner's rules and orders and to protect </ins>&#10;8.15    <ins>warranty holders in this state. The commissioner has the enforcement authority in chapter </ins>&#10;8.16    <ins>45 available to enforce the provisions of the chapter and the rules adopted pursuant to it.</ins>&#10;&#10;<a id="go.0.12.0"></a>8.17        Sec. 12. <ins><b>[59C.12] RULEMAKING POWER.</b></ins>&#10;8.18    <ins>The commissioner may adopt rules consistent with the provisions of this chapter </ins>&#10;8.19    <ins>as are necessary to implement them. The rules must include disclosures for the benefit </ins>&#10;8.20    <ins>of the warranty holder, record keeping, and procedures for public complaints. The rules </ins>&#10;8.21    <ins>must also include the conditions under which surplus lines insurers may be rejected for the </ins>&#10;8.22    <ins>purpose of underwriting vehicle protection product warranty agreements.</ins>&#10;&#10;<a id="go.0.13.0"></a>8.23        Sec. 13. <ins><b>[59C.13] APPLICABILITY.</b></ins>&#10;8.24    <ins>This chapter applies to all vehicle protection products sold or offered for sale on </ins>&#10;8.25    <ins>or after the effective date of this chapter. The failure of any person to comply with this </ins>&#10;8.26    <ins>chapter before its effective date is not admissible in any court proceeding, administrative </ins>&#10;8.27    <ins>proceeding, arbitration, or alternative dispute resolution proceeding and may not otherwise </ins>&#10;8.28    <ins>be used to prove that the action of any person or the affected vehicle protection product </ins>&#10;8.29    <ins>was unlawful or otherwise improper. The adoption of this chapter does not imply that a </ins>&#10;8.30    <ins>vehicle protection product warranty was insurance before the effective date of this chapter. </ins>&#10;8.31    <ins>The penalty provisions of this chapter do not apply to any violation of this chapter relating </ins>&#10;8.32    <ins>to or in connection with the sale or failure to disclose in a retail installment contract or </ins>&#10;8.33    <ins>lease, or contract or agreement that provides for payments under a vehicle protection </ins>&#10;9.1     <ins>product warranty so long as the sale of such product, contract, or agreement was otherwise </ins>&#10;9.2     <ins>disclosed to the purchaser in writing at the time of the purchase or lease. In the event of a </ins>&#10;9.3     <ins>violation for which the penalty provisions of this chapter does not apply, the court shall </ins>&#10;9.4     <ins>award actual damages and costs, including reasonable attorneys fees. Nothing in this </ins>&#10;9.5     <ins>section may be construed to require the application of the penalty provisions where this </ins>&#10;9.6     <ins>section is not applicable.</ins>&#10;&#10;<a id="go.0.14.0"></a>9.7         Sec. 14. <ins><b>EFFECTIVE DATE.</b></ins>&#10;9.8     <ins>This act is effective January 1, 2007.</ins>&#10;