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Date of enactment: April 6, 2012
2011 Senate Bill 492 Date of publication*: April 19, 2012
* Section 991.11, Wisconsin Statutes 2009-10 : Effective date of acts. "Every act and every portion of an act enacted by the legislature over the governor's partial veto which does not expressly prescribe the time when it takes effect shall take effect on the day after its date of publication as designated" by the secretary of state [the date of publication may not be more than 10 working days after the date of enactment].
2011 WISCONSIN ACT 226
An Act to renumber subchapter II (title) of chapter 616 [precedes 616.71]; and to create 600.01 (1) (b) 12., 601.31 (1) (kr), subchapter III of chapter 616 [precedes 616.50] and 628.02 (1) (b) 9. of the statutes; relating to: regulating certain service contracts and granting rule-making authority.
The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:
226,1 Section 1. 600.01 (1) (b) 12. of the statutes is created to read:
600.01 (1) (b) 12. Service contracts, as defined in s. 616.50 (11), or providers, service contract sellers, or administrators of service contracts under subch. III of ch. 616.
226,2 Section 2. 601.31 (1) (kr) of the statutes is created to read:
601.31 (1) (kr) For processing and maintaining license records under s. 616.54 (4), $400 upon initial licensure and $100 annually thereafter, unless the commission specifies a different amount by rule.
226,3 Section 3. Subchapter III of chapter 616 [precedes 616.50] of the statutes is created to read:
chapter 616
SUBchapter III
property service contracts
616.50 Definitions. In this subchapter:
(1) "Administration" includes any of the following activities performed on behalf of a provider:
(a) Approving or disapproving claims, paying claims, or controlling the claims adjustment process.
(b) Arranging for or controlling the purchase of insurance associated with the offering of service contracts.
(c) Maintaining records or submitting filings required under this subchapter on behalf of a provider.
(d) Collecting provider fees from service contract sellers and remitting the provider fees to the provider.
(2) "Administrator" means a person appointed by a provider under s. 616.54 (1) to be responsible for any or all of the administration of service contracts and compliance with this subchapter.
(3) "Commissioner" means the commissioner of insurance.
(4) "Consumer" means an individual who buys other than for purposes of resale any tangible personal property that is distributed in commerce and that is normally used for personal, family, or household purposes and not for business or research purposes.
(5) "Maintenance agreement" means a contract of a specified duration that provides for scheduled maintenance only and does not include repair or replacement.
(6) "Motor vehicle manufacturer" means a person that does or satisfies any of the following:
(a) Manufactures or produces motor vehicles and sells motor vehicles under its own name or label.
(b) Is a subsidiary of the person that manufactures or produces motor vehicles.
(c) Is a corporation that owns 100 percent of the person that manufactures or produces motor vehicles.
(d) Manufactures or produces motor vehicles and sells motor vehicles under the trade name or label of another person that manufactures or produces motor vehicles.
(e) Does not manufacture or produce motor vehicles but, pursuant to a written contract, licenses the use of its trade name or label to another person that manufactures or produces motor vehicles and that sells motor vehicles under the licensor's trade name or label.
(7) "Nonoriginal manufacturer's parts" means replacement parts for property that are not made for or by the original manufacturer of the property.
(8) "Provider" means a person that is contractually obligated to a service contract holder under the terms of a service contract.
(9) "Provider fee" means the consideration paid for a service contract.
(10) "Reimbursement insurance policy" means any of the following:
(a) A policy of insurance issued to a provider under the terms of the insured service contracts issued or sold by the provider that, in the event of the provider's or administrator's nonperformance, will pay or perform on behalf of the provider or administrator all covered contractual obligations or services under the terms of the insured service contracts issued or sold by the provider.
(b) A policy of insurance issued to a provider that provides the coverage specified in par. (a) and additional coverage that does not conflict with par. (a).
(11) "Service contract" means a contract or agreement for a separately stated consideration for a specific duration to perform the repair, replacement, or maintenance of property, or to provide indemnification for the repair, replacement, or maintenance of property, for the operational or structural failure of property, due to a defect in materials or workmanship, accidental damage from handling, or normal wear and tear, with or without additional provisions for incidental payment of indemnity under limited circumstances, including towing, rental, and emergency road service and road hazard protection. "Service contract" includes a contract or agreement that provides for any of the following:
(a) The repair, replacement, or maintenance of property or indemnification for the repair, replacement, or maintenance of property for damage resulting from a power surge or interruption.
(b) The repair or replacement or indemnification for the repair or replacement of a motor vehicle for the operational or structural failure of one or more parts or systems of the motor vehicle brought about by the failure of an additive product to perform as represented.
(c) The repair or replacement of tires or wheels on a motor vehicle damaged as a result of coming into contact with road hazards including potholes, rocks, wood debris, metal parts, glass, plastic, curbs, or composite scraps.
(d) The removal of dents, dings, or creases on a motor vehicle that can be repaired using the process of paintless dent removal without affecting the existing paint finish and without replacing vehicle body panels, sanding, bonding, or painting.
(e) The repair or replacement of motor vehicle windshield chips or cracks.
(f) The repair of damage to the interior components of a motor vehicle caused by wear and tear, but does not include the replacement of any part or component of a motor vehicle's interior.
(12) "Service contract holder" means a person who is the purchaser or holder of a service contract.
(13) "Service contract seller" means a person, including a real estate agent, who is engaged only in the selling or soliciting of a service contract, but who is not acting as a provider or involved in the administration of service contracts.
(14) "Warranty" means a warranty made solely by the manufacturer, importer, or seller of property or services without consideration, that is not negotiated or separated from the sale of the product or services, that is incidental to the sale of the product or services, and that guarantees indemnity for defective parts, mechanical or electrical breakdown, labor, or other remedial measures, such as repair or replacement of the property or repetition of services.
616.52 Applicability. (1) This subchapter does not apply to any of the following:
(a) Warranties, as defined in s. 100.203 (1) (g), 100.205 (1) (g), or 616.50 (14).
(b) Maintenance agreements.
(c) Service contracts offered by public utilities on their devices for the transmission of public utility service to customers to the extent such service contracts are regulated by the public service commission.
(cm) Service contracts offered by cooperative associations organized under ch. 185, for the purpose of producing or furnishing heat, light, power, or water to their members, or by subsidiaries or affiliates of such cooperative associations.
(d) Service contracts sold or offered for sale to persons other than consumers.
(e) Service contracts for inside wire protection plans associated with the offering of telecommunications service, as defined in s. 182.017 (1g) (cq), or video service, as defined in 66.0420 (2) (y).
(f) Service contracts with respect to commercial property used in the provision of telecommunications service, as defined in s. 182.017 (1g) (cq), or video service, as defined in 66.0420 (2) (y).
(2) Motor vehicle manufacturer's service contracts on the motor vehicle manufacturer's products are exempt from this subchapter, except for ss. 616.56 (1) to (3) and (6) to (16), 616.58, and 616.62, and motor vehicle manufacturers offering service contracts on the motor vehicle manufacturer's products are exempt from licensure under s. 616.54 (4).
(3) A person who holds a valid certificate of authority under s. Ins 15.01, Wis. Adm. Code may elect to do one of the following:
(a) Continue to operate in this state under the certificate of authority. If the person makes such an election, s. Ins 15.01, Wis. Adm. Code shall continue to apply to the person and this section shall not apply to the person.
(b) Apply for a license as a provider pursuant to s. 616.54 (4). If the person is licensed, this subchapter shall apply to the person and s. Ins 15.01, Wis. Adm. Code shall not apply to the person for any service contracts issued subsequent to licensure.
616.54 Requirements for doing business. (1) Appointment of administrator. A provider may, but is not required to, appoint an administrator to be responsible for any or all of the administration of service contracts and compliance with this subchapter. Except as provided in s. 616.58 (2) (b), a provider shall be liable for the acts of an administrator appointed by the provider to assist with the administration of the provider's service contracts to the extent such acts relate to the provider's service contracts offered in or from this state. No person may act as an administrator of service contracts sold in this state unless the person registers with the commissioner by providing the following information:
(a) The name, business address, and other information required by the commissioner for an employee or officer of the administrator that is designated by the applicant as the person responsible for the administration of service contracts in this state.
(b) The location of the administrator's home office.
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