Florida Statutes 634.081 – Suspension or revocation of license; grounds
Current as of: 2023 | Check for updates
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(1) The office may, in its discretion, suspend or revoke the license of any motor vehicle service agreement company if it finds that the company has violated any lawful order of the office or any provision of this part.
(2) The office shall suspend or revoke the license of a motor vehicle service agreement company if it finds that the company:
(a) Is impaired or insolvent as defined in s. 631.011 or in unsound condition, or in a condition, or using methods and practices in the conduct of its business, as to render its further transaction of service agreements in this state hazardous or injurious to its service agreement holders or to the public.
Terms Used In Florida Statutes 634.081
- Affiliate: means any entity which exercises control over or is controlled by the motor vehicle service agreement company or insurer, directly or indirectly, through:(a) Equity ownership of voting securities;(b) Common managerial control; or(c) Collusive participation by the management of the motor vehicle service agreement company or insurer and affiliate in the management of the motor vehicle service agreement company or insurer or the affiliate. See Florida Statutes 634.011
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Insurer: means any property or casualty insurer duly authorized to transact such business in this state. See Florida Statutes 634.011
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Motor vehicle: means :
(a) A self-propelled device operated solely or primarily upon roadways to transport people or property, or the component part of such a self-propelled device, except such term does not include any self-propelled vehicle, or component part of such vehicle, which:1. See Florida Statutes 634.011- motor vehicle service agreement: includes any contract or agreement that provides:
(a) For the coverage or protection defined in this subsection and which is issued or provided in conjunction with an additive product applied to the motor vehicle that is the subject of such contract or agreement;(b) For payment of vehicle protection expenses. See Florida Statutes 634.011- Net assets: means the amount by which the total statutory assets exceed total liability, except that assets pledged to secure debts not reflected on the books of the service agreement company shall not be included in net assets. See Florida Statutes 634.011
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- person: includes individuals, children, firms, associations, joint adventures, partnerships, estates, trusts, business trusts, syndicates, fiduciaries, corporations, and all other groups or combinations. See Florida Statutes 1.01
- service agreement: means any contract or agreement indemnifying the service agreement holder for the motor vehicle listed on the service agreement and arising out of the ownership, operation, and use of the motor vehicle against loss caused by failure of any mechanical or other component part, or any mechanical or other component part that does not function as it was originally intended; however, nothing in this part shall prohibit or affect the giving, free of charge, of the usual performance guarantees by manufacturers or dealers in connection with the sale of motor vehicles. See Florida Statutes 634.011
- service agreement company: means any corporation, sole proprietorship, or partnership (other than an authorized insurer) issuing motor vehicle service agreements. See Florida Statutes 634.011
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
- writing: includes handwriting, printing, typewriting, and all other methods and means of forming letters and characters upon paper, stone, wood, or other materials. See Florida Statutes 1.01
(b) Has refused to be examined or to produce its accounts, records, and files for examination, or if any of its officers have refused to give information with respect to its affairs or to perform any other legal obligation as to the examination, when required by the office.(c) Has failed to pay any fees, taxes, or other assessments within 90 days after their due date.(d) Has failed to pay any final judgment rendered against it in this state within 90 days after the judgment became final.(e) With a frequency as to indicate its general business practice in this state, has without just cause refused to pay proper claims arising under its service agreements, or without just cause compels service agreement holders to accept less than the amount due them or to employ attorneys or to bring suit against the service agreement company to secure full payment or settlement of proper claims.(f) Is affiliated with, or under the same general management or interlocking directorate or ownership of, another motor vehicle service agreement company or person who transacts service agreements in or from this state without a subsisting license.(g) Fails to affirm or deny coverage of a claim upon written request of the agreement holder within a reasonable time after notification of the claim.(h) Fails to promptly provide a reasonable explanation in writing if requested by the agreement holder of the basis in the service agreement in relation to the facts or applicable law for denial of a claim or for the offer of a compromise settlement.(3) The office may, in its discretion, suspend the license of any motor vehicle service agreement company as to which a proceeding for receivership, conservatorship, or rehabilitation or other delinquency proceeding has been commenced against it or its affiliate in any state.(4) A violation of this act by an insurer is grounds for suspension or revocation of the insurer’s certificate of authority in this state.(5) The office shall suspend or revoke the license of a company if it finds that the ratio of gross written premiums written to net assets exceeds 10 to 1 unless the company has in excess of $750,000 in net assets and is utilizing contractual liability insurance which cedes 100 percent of the service agreement company’s claims liabilities to the contractual liability insurer or is utilizing contractual liability insurance which reimburses the service agreement company for 100 percent of its paid claims. However, if a service agreement company has been licensed by the office in excess of 10 years, is in compliance with all applicable provisions of this part, and has net assets at all times in excess of $3 million that comply with the provisions of part II of chapter 625, such company may not exceed a ratio of gross written premiums written to net assets of 15 to 1.