Section 69O-198.005 - Financial RequirementsRequirements regarding the funded, unearned premium reserve account.
(1) "Gross Written Premiums" means the total amount of premiums paid, paid or to be paid by the consumer for the entire period of the service warranty, inclusive of commissions, for which the association is obligated under service warranties issued.(2) Written contracts are required on all sales made between the service warranty association and the consumer. The serially pre-numbered contract shall include the selling price to the ultimate consumer, issuing sales representative, date issued, name of warranty holder and their street address, warranty period, and other pertinent information relative to the transaction. Copies of all warranty contracts shall be maintained by the association for a period of at least four years after expiration of the contract.(3) Each service warranty association shall maintain a warranty register. The register shall include at least the following items. (c) Issuing sales representative;(d) Name of warranty holder and their street address;(g) Commission to sales representative;(i) Location of Property.(4) The gross premium shall be the greater of either the total amount of premium paid by the ultimate consumer (selling price), inclusive of commissions, or that selling price paid for the warranty by the retail store or sales representative plus any commission.(5) The unearned premium reserve account is calculated as follows: (a) The minimum reserve for all service warranty associations shall be 25 percent of the gross written premium received on all warranty contracts in force, in this state.(b) For contracts in excess of two years which are offered by associations having net assets of less than $500,000 and for which premiums are collected in advance for coverage in a subsequent year, 100 percent of the premiums for such subsequent years must be placed in the funded unearned premium reserve account.(6) The unearned premium reserve account shall be totally funded at all times by unencumbered assets. Those prescribed assets funding the unearned premium reserve shall be clearly designated for this purpose and such reserve account must be a separate auditable account for contracts in force in this state.(7) No warranty seller may allow its gross written premiums in force for contracts written in this state to exceed a 7-to-1 ratio to net assets, unless it meets the requirement of Section 634.406(4), F.S.(8)(a) All service warranty associations utilizing a funded unearned premium reserve account for contracts in force in this state shall deposit with the Department a reserve deposit equal to 10% of the gross written premiums received on all warranty contracts in this state.(b) The deposit required in Section 634.405(1), F.S., may be used in the funding of the 10% reserve deposit required under Section 634.406(1), F.S.Fla. Admin. Code Ann. R. 69O-198.005
Rulemaking Authority 634.402 FS. Law Implemented 634.406(1), (3), (4), 634.4165 FS.
New 12-26-88, Formerly 4-67.005, Amended 4-26-90, 3-28-93, 4-3-94, Formerly 4-198.005, Amended by Florida Register Volume 47, Number 091, May 11, 2021 effective 5/25/2021.New 12-26-88, Formerly 4-67.005, Amended 4-26-90, 3-28-93, 4-3-94, Formerly 4-198.005, Amended 5-25-21.