AB862,4,1715 a. The warrantor's name, any names under which the warrantor does business
16in this state, the warrantor's principal office address, and the warrantor's telephone
17number.
AB862,4,1918 b. The name and address of the warrantor's agent for service of process in this
19state if other than the warrantor.
AB862,4,2120 3. The registration records shall contain the following information, which is
21confidential and not available for inspection or copying under s. 19.35 (1):
AB862,4,2322 a. The name of the warrantor's executive officer directly responsible for the
23warrantor's vehicle protection product business.
AB862,5,3
1b. The name, address, and telephone number of any administrator that the
2warrantor designates to be responsible for the administration of warranties in this
3state.
AB862,5,54 c. A copy of the warranty reimbursement insurance policy or other financial
5information required under sub. (3).
AB862,5,66 d. A copy of each warranty that the warrantor plans to use in this state.
AB862,5,97 e. A statement indicating that the warrantor qualifies to do business in this
8state under sub. (3) (a) or that the warrantor qualifies to do business in this state
9under sub. (3) (b).
AB862,5,1210 (c) 1. If a registrant fails to register by the renewal deadline, the commissioner
11shall give the registrant written notice of the failure. The registrant shall have 30
12days to complete the renewal before his or her registration is suspended.
AB862,5,1613 2. If a registrant's registration is suspended under subd. 1., the suspension
14shall last until the registrant registers and pays any late payment, except that the
15registration shall be terminated one year after the renewal deadline if the registrant
16has not registered or paid any late payment.
AB862,5,1917 (d) A person who sells or solicits a sale of a vehicle protection product that
18includes a warranty but who is not a warrantor is not required to register as a
19warrantor to sell the vehicle protection product.
AB862,5,22 20(3) Financial responsibility. No person may sell, or offer to sell, a vehicle
21protection product that includes a warranty unless the warrantor meets one of the
22following conditions:
AB862,5,2523 (a) The warrantor is insured under a warranty reimbursement insurance
24policy that meets the conditions specified in s. 632.185 (2) and has filed with the
25commissioner a copy of the warranty reimbursement insurance policy.
AB862,6,13
1(b) The warrantor's net worth, or the total of all outstanding ownership
2interests in the warrantor, is at least $50,000,000, or, if the warrantor is a subsidiary,
3the parent entity's net worth is at least $50,000,000. If the warrantor files with the
4U.S. Securities and Exchange Commission, the warrantor provides the
5commissioner with a copy of the warrantor's, or the parent entity's, most recent U.S.
6Securities and Exchange Commission form 10-K or form 20-f, filed within the
7preceding year pursuant to 15 USC 78L(b) or (g), 78m, or 78o(d). If the warrantor
8does not file with the U.S. Securities and Exchange Commission, the warrantor
9provides the commissioner a copy of the warrantor's, or the parent entity's, audited
10financial statements. If the warrantor's parent entity's forms or audited financial
11statements are filed to meet the condition specified under this subsection, then the
12parent entity shall agree to guarantee the obligations of the warrantor relating to
13warranties issued by the warrantor in this state.
AB862,6,17 14(4) Disclosure to warranty holder. (a) Every warranty shall be written in
15clear language that is understandable to lay persons and shall be printed or typed
16in easy-to-read size and style of type. No warranty may be sold or offered for sale
17unless it meets all of the following conditions:
AB862,6,1918 1. If the warrantor chooses to meet its financial responsibility obligations
19under sub. (3) (a):
AB862,6,2220 a. The warranty states that the obligations of the warrantor to the warranty
21holder are guaranteed under a warranty reimbursement insurance policy and states
22the name and address of the insurer.
AB862,7,223 b. The warranty states that if a warranty holder makes a claim against a party
24other than the issuer of the warranty reimbursement insurance policy, the warranty
25holder may make a direct claim against the insurer if the warrantor fails to pay any

1claim or to meet any obligation under the terms of the warranty within 60 days after
2proof of loss has been filed with the warrantor.
AB862,7,33 2. The warranty identifies the warrantor, the seller, and the warranty holder.
AB862,7,64 3. The warranty sets forth the total purchase price and the payment terms. The
5purchase price does not have to be preprinted on the warranty and may be negotiated
6with the purchaser at the time of sale.
AB862,7,87 4. The warranty sets forth the procedure for making a claim, including a
8telephone number.
AB862,7,99 5. The warranty states the existence of any deductible amount.
AB862,7,1310 6. The warranty specifies the payments or performance to be provided under
11the warranty, including payments for incidental costs, how the payments or
12performance will be calculated or determined, and any limitations, exceptions, or
13exclusions.
AB862,7,1514 7. The warranty sets forth the conditions under which substitution will be
15allowed.
AB862,7,1616 8. The warranty states all of the obligations and duties of the warranty holder.
AB862,7,1717 9. The warranty sets forth any terms governing transferability of the warranty.
AB862,7,1918 10. The warranty contains a disclosure that reads substantially as follows:
19"This agreement is a product warranty and is not insurance."
AB862,7,2120 11. The warranty clearly states any terms and conditions governing the
21cancellation of the sale and warranty.
AB862,7,2322 (b) The seller of the warranty or the warrantor shall provide one of the following
23to the purchaser:
AB862,7,2424 1. At the time of sale, a copy of the warranty.
AB862,8,3
12. At the time of sale, a receipt or other written evidence of the purchase of the
2vehicle protection product and, within 30 days after the purchase, a copy of the
3warranty.
AB862,8,5 4(5) Warranty cancellation. (a) A warrantor may cancel the warranty only if
5the warranty holder does one of the following:
AB862,8,66 1. Fails to pay for the vehicle protection product to which the warranty applies.
AB862,8,87 2. Makes a material misrepresentation to the seller of the vehicle protection
8product to which the warranty applies or to the warrantor.
AB862,8,99 3. Commits fraud.
AB862,8,1010 4. Substantially breaches the warranty holder's duties under the warranty.
AB862,8,1411 (b) A warrantor canceling a warranty shall mail written notice of cancellation
12to the warranty holder at the last address of the warranty holder in the warrantor's
13records at least 30 days prior to the effective date of the cancellation. The notice shall
14state the effective date of the cancellation and the reason for the cancellation.
AB862,8,20 15(6) Prohibited acts. (a) A warrantor that is not an insurer, as defined in s.
16600.03 (27), may not use in its name, contracts, or literature any of the terms,
17"insurance," "casualty," "surety," "mutual," or any other words descriptive of the
18insurance, casualty, or surety business. A warrantor may not use any name or
19description that is deceptively similar to the name or description of any insurance
20or surety corporation or to any other warrantor.
AB862,8,2221 (b) No warrantor may make any warranty claim that is untrue, deceptive, or
22misleading as provided in s. 100.18.
AB862,8,2523 (c) No person may require as a condition of sale or financing of a motor vehicle
24that a retail purchaser of a motor vehicle purchase a vehicle protection product that
25is not installed on the vehicle at the time of sale.
AB862,9,2
1(7) Record keeping. (a) Warrantors shall keep accurate records of transactions
2regulated under this section.
AB862,9,33 (b) A warrantor's records shall include all of the following:
AB862,9,44 1. Copies of all warranties under which the warrantor is obligated.
AB862,9,65 2. The name and address of each warranty holder to whom the warrantor is
6obligated.
AB862,9,87 3. The dates, amounts, and descriptions of all receipts, claims, and
8expenditures related to the warrantor's warranties.
AB862,9,139 (c) A warrantor shall retain all required records pertaining to each warranty
10holder to whom the warrantor is obligated for at least 2 years after the specified
11period of coverage has expired. A warrantor discontinuing business in this state
12shall maintain its records until it furnishes the commissioner satisfactory proof that
13it has discharged all obligations to warranty holders in this state.
AB862,9,1514 (d) Warrantors shall make all records concerning transactions regulated under
15this section available to the commissioner.
AB862,9,22 16(8) Sanctions; administrative penalty. (a) The commissioner may take
17necessary and appropriate action to enforce this section and the commissioner's
18rules and orders and to protect warranty holders. If a warrantor violates this section
19and the commissioner reasonably believes the violation threatens to render the
20warrantor insolvent or cause irreparable loss or injury to the property or business
21of any person located in this state, the commissioner may issue an order that does
22any of the following:
AB862,9,2323 1. Prohibits the warrantor from engaging in the act that violates this section.
AB862,9,2524 2. Prohibits the warrantor from selling or offering for sale any warranty that
25violates this section.
AB862,10,1
13. Imposes a forfeiture on the warrantor.
AB862,10,52 (b) 1. Prior to the effective date of any order issued under par. (a), the
3commissioner must provide written notice of the order to the warrantor and the
4opportunity for a hearing to be held within 10 business days after receipt of the
5notice.
AB862,10,86 2. Notwithstanding subd. 1., if the commissioner reasonably believes that the
7warrantor is or is about to become insolvent, prior notice and a hearing are not
8required.
AB862,10,119 (c) A person aggrieved by an order issued under par. (a) may request a hearing
10before the commissioner. Section 601.62 applies to a hearing commenced under this
11paragraph.
AB862,10,1412 (d) At the hearing, the commissioner bears the burden of proving that the order
13issued under par. (a) is justified. Chapter 227 applies to a hearing request under this
14subsection.
AB862,10,2015 (e) The commissioner may bring an action in any court of competent
16jurisdiction for an injunction or other appropriate relief to enjoin a threatened or
17existing violation of this section or of a rule or order of the commissioner promulgated
18or issued under this section. An action filed under this paragraph may seek
19restitution on behalf of persons injured by a violation of this section or a violation of
20a rule or order of the commissioner promulgated or issued under this section.
AB862,11,321 (f) A person who violates this section or a rule or order of the commissioner
22promulgated or issued under this section may be ordered to forfeit to the state an
23amount determined by the commissioner, but not more than $500 per violation and
24not more than $10,000 for all violations of a similar nature. Violations are of a similar
25nature if the violation consists of the same or similar course of conduct, action, or

1practice, irrespective of the number of times the conduct, action, or practice that
2violated this section or a rule or order promulgated or issued under this section
3occurred.
AB862, s. 2 4Section 2. 600.01 (1) (b) 11. of the statutes is created to read:
AB862,11,65 600.01 (1) (b) 11. Warrantors, sellers, or administrators of vehicle protection
6product warranties under s. 100.203.
AB862, s. 3 7Section 3. 601.31 (1) (km) of the statutes is created to read:
AB862,11,108 601.31 (1) (km) For processing and maintaining registration records under s.
9100.203 (2), a fee to be set by the commissioner by rule but not to exceed $250
10annually.
AB862, s. 4 11Section 4. 601.41 (1) (intro.) of the statutes is amended to read:
AB862,11,1512 601.41 (1) Duties. (intro.) The commissioner shall administer and enforce chs.
13600 to 655 and ss. 59.52 (11) (c), 66.0137 (4) and (4m), 100.203, 120.13 (2) (b) to (g),
14149.13, and 149.144 and shall act as promptly as possible under the circumstances
15on all matters placed before the commissioner.
AB862, s. 5 16Section 5. 631.37 (4) (g) of the statutes is created to read:
AB862,11,1817 631.37 (4) (g) Warranty reimbursement insurance policy. Section 632.185 (2)
18(e) applies to warranty reimbursement insurance policies.
AB862, s. 6 19Section 6. 632.185 of the statutes is created to read:
AB862,11,21 20632.185 Vehicle protection product warranty insurance policy. (1) In
21this section:
AB862,11,2222 (a) "Vehicle protection product" has the meaning given in s. 100.203 (1) (e).
AB862,11,2323 (b) "Warrantor" has the meaning given in s. 100.203 (1) (f).
AB862,11,2424 (c) "Warranty" has the meaning given in s. 100.203 (1) (g).
AB862,11,2525 (d) "Warranty holder" has the meaning given in s. 100.203 (1) (h).
AB862,12,2
1(e) "Warranty reimbursement insurance policy" has the meaning given in s.
2100.203 (1) (i).
AB862,12,4 3(2) A warranty reimbursement insurance policy that is issued, sold, or offered
4for sale in this state shall meet all of the following conditions:
AB862,12,55 (a) The policy is issued by an insurer authorized to do business in this state.
AB862,12,106 (b) The policy states that the issuer of the policy will reimburse or pay on behalf
7of the warrantor all covered sums that the warrantor is legally obligated to pay or
8will provide the service that the warrantor is legally obligated to perform according
9to the warrantor's contractual obligations under the provisions of the insured
10warranties sold by the warrantor.
AB862,12,1511 (c) The policy states that if the warrantor does not provide payment due under
12the terms of the warranty within 60 days after the warranty holder has filed proof
13of loss according to the terms of the warranty, the warranty holder may file for a
14reimbursement directly with the issuer of the warranty reimbursement insurance
15policy.
AB862,12,2016 (d) The policy provides that the issuer of the warranty reimbursement
17insurance policy has received payment of the premium if the warranty holder paid
18for the vehicle protection product covered under the insured warranty and that the
19insurer's liability under the policy may not be reduced or relieved by a failure of the
20warrantor to report to the insurer the issuance of a warranty.
AB862,12,2121 (e) The policy contains the following provisions regarding cancellation:
AB862,12,2422 1. The policy may not be canceled by the issuer until a written notice of
23cancellation has been mailed or delivered to the commissioner and the insured
24warrantor.
AB862,13,3
12. The cancellation of the policy does not reduce the issuer's responsibility with
2respect to warranties that apply to vehicle protection products sold prior to the date
3of cancellation.
AB862,13,54 3. If the warrantor has filed the policy with the commissioner and the issuer
5cancels the policy, the warrantor shall do one of the following:
AB862,13,86 a. File a copy of a new policy with the commissioner, before the termination of
7the prior policy, providing no lapse in coverage following the termination of the prior
8policy.
AB862,13,109 b. Discontinue acting as a warrantor as of the termination date of the policy
10until a new policy becomes effective and the commissioner accepts it.
AB862, s. 7 11Section 7. Initial applicability.
AB862,13,1412 (1) This act first applies to warranted vehicle protection products and
13warranties that apply to vehicle protection products that are offered for sale on the
14effective date of this subsection.
AB862, s. 8 15Section 8. Effective date.
AB862,13,1716 (1) This act takes effect on the first day of the 7th month beginning after
17publication.
AB862,13,1818 (End)
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