74th OREGON LEGISLATIVE ASSEMBLY--2007 Regular Session
Enrolled
House Bill 3386
Sponsored by COMMITTEE ON BUSINESS AND LABOR
CHAPTER ................
AN ACT
Relating to vehicle protection products; creating new provisions;
and amending ORS 646.608.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + As used in sections 1 to 11 of this 2007 Act:
(1) 'Consumer' means a person in this state who purchases a
vehicle protection product or who possesses a vehicle protection
product and is entitled to enforce a warranty for the product by
reason of the person's possession.
(2) 'Reimbursement insurance policy' means an insurance policy
issued to a warrantor that:
(a) Reimburses the warrantor for expenses or other obligations
the warrantor incurs in complying with the terms and conditions
in a vehicle protection product warranty; or
(b) Pays on a warrantor's behalf all obligations due under the
terms and conditions of the warrantor's vehicle protection
product warranty.
(3) 'Reimbursement insurer' means an insurer that issues a
reimbursement insurance policy.
(4) 'Seller' means a person engaged in the business of offering
a vehicle protection product for sale to a consumer.
(5) 'Vehicle protection product' means a product, system or
service that is designed to prevent a particular type of loss or
damage to a vehicle from theft, and that is:
(a) Provided as a product or system that is installed on or
applied to a vehicle or provided as a service for a specific
vehicle; and
(b) Accompanied by a written warranty.
(6) 'Warrantor' means a person named under the terms of a
vehicle protection product warranty as the contractual obligor to
the consumer. 'Warrantor' does not include an authorized insurer
that provides a warranty reimbursement insurance policy. + }
SECTION 2. { + (1) Sections 1 to 11 of this 2007 Act apply to
vehicle protection product warranties that:
(a) Accompany vehicle protection products delivered to
consumers in this state; and
(b) Require the warrantor, to the extent set forth in the
warranty, to pay to the consumer expenses related to the loss of
or damage to the vehicle.
(2) A vehicle protection product warranty subject to sections 1
to 11 of this 2007 Act is not a service contract and is not
subject to the provisions of ORS 646.263 to 646.285. A seller's
or warrantor's selling or providing a warranty for a vehicle
Enrolled House Bill 3386 (HB 3386-B) Page 1
protection product in compliance with sections 1 to 11 of this
2007 Act does not subject the seller or warrantor to ORS 646.263
to 646.285.
(3) A vehicle protection product warranty subject to sections 1
to 11 of this 2007 Act is not insurance and is not subject to the
provisions of the Insurance Code. A seller's or warrantor's
selling or providing a warranty for a vehicle protection product
in compliance with sections 1 to 11 of this 2007 Act does not
subject the seller or warrantor to the Insurance Code. + }
SECTION 3. { + (1) A person may not offer for sale or sell a
vehicle protection product that includes a vehicle protection
product warranty unless, at the time of the sale, the seller or a
warrantor provides to the consumer:
(a) A copy of the vehicle protection product warranty for the
vehicle protection product; or
(b) A receipt for, or other written evidence of, the consumer's
purchase of the vehicle protection product.
(2) A warrantor who complies with subsection (1)(b) of this
section shall provide to the consumer a copy of the vehicle
protection product warranty within 30 days after the date of
purchase.
(3) The vehicle protection product warranty must:
(a) Be written and printed or typed;
(b) List, either preprinted on the warranty document or, if
negotiated at the time of sale, in an addition to the warranty
document, the purchase price and terms of sale for the vehicle
protection product;
(c) List the name, address, phone number and other available
contact information for the warrantor;
(d) List, either preprinted on the warranty document or in an
addition to the warranty document at the time of sale, the name
of and contact information for the administrator for the vehicle
protection product warranty, if any, the name of the seller and
the name of the consumer, if the consumer has provided the
consumer's name to the warrantor;
(e) Specify the nature or contents of the vehicle protection
product or the services included with the product and any
limitations, exceptions or exclusions;
(f) Describe the procedure for making a claim under the
warranty and provide an address and telephone number for
submitting claims;
(g) Specify any restrictions governing the transferability or
cancellation of the vehicle protection product warranty;
(h) Disclose the items for which the warrantor will pay
incidental expenses, along with any formula the warrantor uses to
calculate the expenses, or provide for a fixed sum for payment of
incidental expenses;
(i) State the consumer's duties, including any duty to protect
against further damage to the vehicle and any requirement to
follow the warranty's instructions;
(j) State that a reimbursement insurance policy guarantees the
obligations to the consumer set forth in the warranty;
(k) List the name and address and other available contact
information for the reimbursement insurer and state that if the
warrantor does not provide a covered service within 60 days after
the date the consumer provides proof of loss or damage, the
consumer may apply directly to the reimbursement insurer for
reimbursement;
(L) List the name, mailing address and telephone number for the
Department of Consumer and Business Services and state that the
Enrolled House Bill 3386 (HB 3386-B) Page 2
consumer may address unresolved complaints concerning a warrantor
or questions concerning the regulation of a warrantor to the
department; and
(m) State that the vehicle protection product warranty is a
product warranty and not insurance. + }
SECTION 4. { + (1) A person may not conduct business as a
warrantor in this state or make a representation that the person
is a warrantor in this state unless the person registers in
writing with the Director of the Department of Consumer and
Business Services in a form the director prescribes by rule. For
purposes of this section, a person who offers for sale or sells a
vehicle protection product but does not offer a warranty with the
product or is not contractually obligated to any performance
under the terms and conditions of a warranty that accompanies the
product is not a warrantor subject to this section.
(2) A registration form submitted to the director under this
section shall contain the following information:
(a) The warrantor's name and telephone number and the address
of the warrantor's principal office;
(b) The name, address and telephone number of the warrantor's
agent for the service of process in this state if the agent is
not the warrantor;
(c) The identities of the warrantor's executive officer and
officers directly responsible for the warrantor's business
operations related to vehicle protection product warranties;
(d) The name, address and telephone number of any person the
warrantor designates to administer the warrantor's vehicle
protection product warranties in this state;
(e) A copy of each warranty form the warrantor proposes to use
in this state; and
(f) A copy of a warranty reimbursement insurance policy the
warrantor intends to use to demonstrate the warrantor's financial
responsibility in accordance with section 5 of this 2007 Act.
(3) A warrantor shall report any changes to the information
provided in this section to the director not later than 30 days
after the information has changed.
(4) A registration under this section expires on December 31 of
each year. The director by rule shall prescribe a procedure for
renewing a registration under this section.
(5) A warrantor shall pay a fee in an amount the director sets
by rule for each registration or renewal under this section. The
fee must be in an amount that, when aggregated with all other
fees collected under this section, is sufficient to pay the
expenses of administering and enforcing sections 1 to 11 of this
2007 Act. + }
SECTION 5. { + (1) A warrantor shall obtain a reimbursement
insurance policy from a qualified reimbursement insurer that
covers all liability to the consumer under all vehicle protection
product warranties a warrantor issues. A qualified reimbursement
insurer is:
(a) An insurer authorized to transact insurance in this state
under a certificate of authority issued in accordance with the
Insurance Code; or
(b) A surplus lines insurer.
(2) The Department of Consumer and Business Services may not
require any other financial security requirements or financial
standards for warrantors. + }
SECTION 6. { + (1) A reimbursement insurance policy for a
warranty issued in accordance with sections 1 to 11 of this 2007
Act shall have the following provisions:
Enrolled House Bill 3386 (HB 3386-B) Page 3
(a) The reimbursement insurer that issues the policy will
reimburse or pay on behalf of the warrantor any amounts the
warrantor is legally obligated to pay or will provide any service
that the warrantor is legally obligated to perform under the
vehicle protection product warranty.
(b) If the warrantor does not pay or provide to the consumer
the amounts or the service for which the warrantor is legally
obligated within 60 days after the date the consumer provides
proof of loss or damage, the reimbursement insurer will pay the
amount or provide the service directly to or on behalf of the
consumer.
(c) A reimbursement insurer may not defend against a consumer's
claim for payment of an amount or performance of a service
described in paragraph (a) of this subsection on the basis that
the consumer did not pay the premium for the reimbursement
insurance policy. For the purposes of any claim a consumer makes
under the policy, the consumer's payment for the vehicle
protection product shall constitute payment of the premium for
the reimbursement insurance policy.
(d) The warrantor to whom a reimbursement insurer issued a
reimbursement insurance policy is an agent or representative of
the reimbursement insurer for the purpose of obligating the
reimbursement insurer to the consumer under the terms and
conditions of the reimbursement insurance policy.
(2) A reimbursement insurer may not cancel a reimbursement
insurance policy until the insurer delivers to the warrantor and
the Director of the Department of Consumer and Business Services
a written notice of cancellation.
(3) A reimbursement insurer that cancels a reimbursement
insurance policy does not reduce the reimbursement insurer's
responsibility for vehicle protection products that the warrantor
issued and insured under the policy before the cancellation date.
(4) A warrantor that receives a cancellation notice for a
reimbursement insurance policy shall:
(a) Obtain new reimbursement insurance from a reimbursement
insurer qualified in accordance with section 5 of this 2007 Act
and file proof with the Director of the Department of Consumer
and Business Services that the warrantor has obtained new
insurance; or
(b) Discontinue offering vehicle protection product warranties
as of the date of cancellation and until the warrantor obtains
new reimbursement insurance from a reimbursement insurer
qualified in accordance with section 5 of this 2007 Act. + }
SECTION 7. { + A warrantor may designate a person as an
administrator for the warrantor's vehicle protection product
warranties under sections 1 to 11 of this 2007 Act. + }
SECTION 8. { + (1) A warrantor shall maintain accurate
accounts, books and other records for transactions regulated
under sections 1 to 11 of this 2007 Act and shall make the
records available to the Director of the Department of Consumer
and Business Services for inspection during normal business
hours. The warrantor's records shall include:
(a) A copy of the warranty for each unique form of vehicle
protection product sold;
(b) The name and address of each consumer;
(c) A list of the locations where the warrantor's vehicle
protection products are offered for sale or sold; and
(d) Dates, descriptions, amounts and receipts for payments to
consumers for claims related to the vehicle protection product
Enrolled House Bill 3386 (HB 3386-B) Page 4
warranty or any expenditures related to providing the vehicle
protection product warranty.
(2) Except as provided in subsection (4) of this section, a
warrantor shall retain all records required under subsection (1)
of this section for at least two years after the period of
coverage specified in the vehicle protection product warranty has
expired.
(3) A warrantor may maintain records required under this
section in an electronic form. If the warrantor maintains a
record in a format other than paper, the warrantor shall reformat
the record into a legible paper copy at the director's request.
(4) A warrantor that no longer conducts business in this state
shall maintain the warrantor's records until 10 years after the
date of the last sale of a vehicle protection product that
includes the warrantor's warranty. + }
SECTION 9. { + (1) A warrantor may not use in the warrantor's
name:
(a) 'Casualty,' 'surety,' 'insurance,' 'mutual' or any other
word descriptive of the casualty, insurance or surety business;
or
(b) A name deceptively similar to the name or description of
any insurance company, surety corporation or other warrantor.
(2) A warrantor may use the word 'guaranty' or a similar word
in the warrantor's name. + }
SECTION 10. { + (1) A warrantor or a warrantor's
representative, in the warrantor's vehicle protection product
warranty or in an advertisement or literature for the warranty,
may not:
(a) Make, permit or cause to be made any false or misleading
statement; or
(b) Intentionally omit a material statement that would be
considered misleading if omitted.
(2) A seller or warrantor may not require, as a condition of
financing, that a retail purchaser of a motor vehicle purchase a
vehicle protection product. + }
SECTION 11. { + (1) The Director of the Department of Consumer
and Business Services may adopt rules to implement and enforce
sections 1 to 11 of this 2007 Act.
(2) The director may investigate warrantors or other persons as
reasonably necessary to enforce sections 1 to 11 of this 2007 Act
and to protect consumers in this state. + }
SECTION 12. { + The Attorney General may enforce violations of
sections 1 to 11 of this 2007 Act under ORS 646.608. + }
SECTION 13. ORS 646.608 is amended to read:
646.608. (1) A person engages in an unlawful practice when in
the course of the person's business, vocation or occupation the
person does any of the following:
(a) Passes off real estate, goods or services as those of
another.
(b) Causes likelihood of confusion or of misunderstanding as to
the source, sponsorship, approval, or certification of real
estate, goods or services.
(c) Causes likelihood of confusion or of misunderstanding as to
affiliation, connection, or association with, or certification
by, another.
(d) Uses deceptive representations or designations of
geographic origin in connection with real estate, goods or
services.
(e) Represents that real estate, goods or services have
sponsorship, approval, characteristics, ingredients, uses,
Enrolled House Bill 3386 (HB 3386-B) Page 5
benefits, quantities or qualities that they do not have or that a
person has a sponsorship, approval, status, qualification,
affiliation, or connection that the person does not have.
(f) Represents that real estate or goods are original or new if
they are deteriorated, altered, reconditioned, reclaimed, used or
secondhand.
(g) Represents that real estate, goods or services are of a
particular standard, quality, or grade, or that real estate or
goods are of a particular style or model, if they are of another.
(h) Disparages the real estate, goods, services, property or
business of a customer or another by false or misleading
representations of fact.
(i) Advertises real estate, goods or services with intent not
to provide them as advertised, or with intent not to supply
reasonably expectable public demand, unless the advertisement
discloses a limitation of quantity.
(j) Makes false or misleading representations of fact
concerning the reasons for, existence of, or amounts of price
reductions.
(k) Makes false or misleading representations concerning credit
availability or the nature of the transaction or obligation
incurred.
(L) Makes false or misleading representations relating to
commissions or other compensation to be paid in exchange for
permitting real estate, goods or services to be used for model or
demonstration purposes or in exchange for submitting names of
potential customers.
(m) Performs service on or dismantles any goods or real estate
when not authorized by the owner or apparent owner thereof.
(n) Solicits potential customers by telephone or door to door
as a seller unless the person provides the information required
under ORS 646.611.
(o) In a sale, rental or other disposition of real estate,
goods or services, gives or offers to give a rebate or discount
or otherwise pays or offers to pay value to the customer in
consideration of the customer giving to the person the names of
prospective purchasers, lessees, or borrowers, or otherwise
aiding the person in making a sale, lease, or loan to another
person, if earning the rebate, discount or other value is
contingent upon occurrence of an event subsequent to the time the
customer enters into the transaction.
(p) Makes any false or misleading statement about a prize,
contest or promotion used to publicize a product, business or
service.
(q) Promises to deliver real estate, goods or services within a
certain period of time with intent not to deliver them as
promised.
(r) Organizes or induces or attempts to induce membership in a
pyramid club.
(s) Makes false or misleading representations of fact
concerning the offering price of, or the person's cost for real
estate, goods or services.
(t) Concurrent with tender or delivery of any real estate,
goods or services fails to disclose any known material defect or
material nonconformity.
(u) Engages in any other unfair or deceptive conduct in trade
or commerce.
(v) Violates any of the provisions relating to auction sales,
auctioneers or auction marts under ORS 698.640, whether in a
commercial or noncommercial situation.
Enrolled House Bill 3386 (HB 3386-B) Page 6
(w) Manufactures mercury fever thermometers.
(x) Sells or supplies mercury fever thermometers unless the
thermometer is required by federal law, or is:
(A) Prescribed by a person licensed under ORS chapter 677; and
(B) Supplied with instructions on the careful handling of the
thermometer to avoid breakage and on the proper cleanup of
mercury should breakage occur.
(y) Sells a thermostat that contains mercury unless the
thermostat is labeled in a manner to inform the purchaser that
mercury is present in the thermostat and that the thermostat may
not be disposed of until the mercury is removed, reused, recycled
or otherwise managed to ensure that the mercury does not become
part of the solid waste stream or wastewater. For purposes of
this paragraph, 'thermostat' means a device commonly used to
sense and, through electrical communication with heating, cooling
or ventilation equipment, control room temperature.
(z) Sells or offers for sale a motor vehicle manufactured after
January 1, 2006, that contains mercury light switches.
(aa) Violates the provisions of ORS 803.375, 803.385 or 815.410
to 815.430.
(bb) Violates ORS 646.850 (1).
(cc) Violates any requirement of ORS 646.661 to 646.686.
(dd) Violates the provisions of ORS 128.801 to 128.898.
(ee) Violates ORS 646.883 or 646.885.
(ff) Violates any provision of ORS 646.195.
(gg) Violates ORS 646.569.
(hh) Violates the provisions of ORS 646.859.
(ii) Violates ORS 759.290.
(jj) Violates ORS 646.872.
(kk) Violates ORS 646.553 or 646.557 or any rule adopted
pursuant thereto.
(LL) Violates ORS 646.563.
(mm) Violates ORS 759.690 or any rule adopted pursuant thereto.
(nn) Violates the provisions of ORS 759.705, 759.710 and
759.720 or any rule adopted pursuant thereto.
(oo) Violates ORS 646.892 or 646.894.
(pp) Violates any provision of ORS 646.249 to 646.259.
(qq) Violates ORS 646.384.
(rr) Violates ORS 646.871.
(ss) Violates ORS 822.046.
(tt) Violates ORS 128.001.
(uu) Violates ORS 646.649 (2) to (4).
(vv) Violates ORS 646.877 (2) to (4).
(ww) Violates ORS 87.686.
(xx) Violates ORS 646.651.
(yy) Violates ORS 646.879.
(zz) Violates ORS 646.402 or any rule adopted under ORS 646.402
or 646.404.
(aaa) Violates ORS 180.440 (1).
(bbb) Commits the offense of acting as a vehicle dealer without
a certificate under ORS 822.005.
(ccc) Violates ORS 87.007 (2) or (3).
(ddd) Violates ORS 92.405 (1), (2) or (3).
(eee) Engages in an unlawful practice under ORS 646.648.
{ + (fff) Violates sections 1 to 11 of this 2007 Act. + }
(2) A representation under subsection (1) of this section or
ORS 646.607 may be any manifestation of any assertion by words or
conduct, including, but not limited to, a failure to disclose a
fact.
Enrolled House Bill 3386 (HB 3386-B) Page 7
(3) In order to prevail in an action or suit under ORS 646.605
to 646.652, a prosecuting attorney need not prove competition
between the parties or actual confusion or misunderstanding.
(4) An action or suit may not be brought under subsection
(1)(u) of this section unless the Attorney General has first
established a rule in accordance with the provisions of ORS
chapter 183 declaring the conduct to be unfair or deceptive in
trade or commerce.
(5) Notwithstanding any other provision of ORS 646.605 to
646.652, if an action or suit is brought under subsection
(1)(aaa) of this section by a person other than a prosecuting
attorney, relief is limited to an injunction and the prevailing
party may be awarded reasonable attorney fees.
SECTION 14. { + (1) Sections 1 to 11 of this 2007 Act and the
amendments to ORS 646.608 by section 13 of this 2007 Act apply to
persons conducting business in this state as warrantors on or
after the operative date specified in section 15 of this 2007
Act.
(2) Sections 1 to 11 of this 2007 Act and the amendments to ORS
646.608 by section 13 of this 2007 Act apply to insurers that
offer reimbursement insurance policies in this state on or after
the operative date specified in section 15 of this 2007 Act.
(3) Sections 1 to 11 of this 2007 Act and the amendments to ORS
646.608 by section 13 of this 2007 Act apply to transactions for
vehicle protection products conducted on or after the operative
date specified in section 15 of this 2007 Act. + }
SECTION 15. { + (1) Sections 1 to 12 of this 2007 Act and the
amendments to ORS 646.608 by section 13 of this 2007 Act become
operative on July 1, 2008.
(2) The Director of the Department of Consumer and Business
Services may take any action before the operative date specified
in this section that is necessary to enable the director to
exercise, on and after the operative date specified in this
section, all the duties, functions and powers conferred on the
director by sections 1 to 11 of this 2007 Act and the amendments
to ORS 646.608 by section 13 of this 2007 Act. + }
----------
Passed by House May 16, 2007
Repassed by House June 12, 2007
...........................................................
Chief Clerk of House
...........................................................
Speaker of House
Passed by Senate June 11, 2007
...........................................................
President of Senate
Enrolled House Bill 3386 (HB 3386-B) Page 8
Received by Governor:
......M.,............., 2007
Approved:
......M.,............., 2007
...........................................................
Governor
Filed in Office of Secretary of State:
......M.,............., 2007
...........................................................
Secretary of State
Enrolled House Bill 3386 (HB 3386-B) Page 9