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H. B. No. 243As Introduced
As Introduced
125th General Assembly | Regular Session | 2003-2004 |
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REPRESENTATIVES Raussen, Buehrer, Hollister, Reidelbach, S. Patton, Barrett, McGregor, Kearns, Willamowski, Gibbs, Fessler
A BILLTo amend sections 3901.043, 3901.51, and 3905.24, to enact section 3905.421, and to repeal sections 3957.01, 3957.02, 3957.03, 3957.04, 3957.05, 3957.06, 3957.07, 3957.08, 3957.09, 3957.10, 3957.11, 3957.12, 3957.13, 3957.14, 3957.15, 3957.16, 3957.17, 3957.18, 3957.19, and 3957.99 of the Revised Code to regulate the sale of home service contracts as consumer transactions rather than as the sale of insurance. BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 3901.043, 3901.51, and 3905.24 be amended and section 3905.421 of the Revised Code be enacted to read as follows:
Sec. 3901.043. The superintendent of insurance may adopt rules in accordance
with Chapter 119. of the Revised Code to establish reasonable fees for any
service or transaction performed by the department of insurance pursuant to
section 1751.03, 3901.321, 3901.341, 3907.09, 3907.10, 3907.11,
3907.12, 3911.011, 3913.40,
3915.14, 3917.06, 3918.07, 3923.02, 3935.04,
3937.03, or 3953.28, 3957.12, or 3957.13 of the Revised
Code or any provision in sections 3913.01 to 3913.23 or in Chapter
3905. of the Revised Code, if no fee is otherwise provided under Title XVII or
XXXIX of the Revised Code for such service or transaction. Any fee collected
pursuant to those rules shall be paid into the state treasury to the credit of
the department of insurance operating fund.
Sec. 3901.51. As used in sections 3901.51 to 3901.55 of
the
Revised Code: (A) "Clearing corporation" has the same meaning as in
section 1308.01 of the Revised Code, except that
with respect to
securities issued by institutions organized or
existing under the
laws of any foreign country or securities used
to meet the deposit
requirements pursuant to the laws of a
foreign country as a
condition of doing business in that country,
"clearing
corporation" includes a corporation that is organized
or existing
under the laws of any foreign country and is legally
qualified
under those laws to effect transactions in securities
by
computerized book-entry. (B) "Direct participant" means a bank, trust company, or
other entity that maintains an account in its name in a clearing
corporation and through which an insurance company participates
in
a clearing corporation. (C) "Federal reserve book-entry system" means the
computerized systems sponsored by the United States department of
the treasury and agencies and instrumentalities of the United
States for holding and transferring securities of the United
States government and agencies and instrumentalities in federal
reserve banks through banks that are members of the federal
reserve system or that otherwise have access to these
computerized
systems. (D) "Member bank" means a national or state bank or a
trust
company that is a member of the federal reserve system and
through
which an insurance company participates in the federal
reserve
book-entry system. (E) "Provisions of the insurance laws of this state" means
provisions of Title XXXIX of the Revised Code related to the
deposit of securities for the benefit and security of
policyholders, and includes, but is not limited to, sections
3901.18,
3901.74, 3901.75, 3901.86, 3903.73,
3907.07, 3909.03,
3909.09, 3909.17, 3913.01, 3913.04,
3919.13, 3919.36, 3919.37,
3919.41, 3925.07, 3927.02, 3927.06,
3929.01, 3929.07, 3929.08,
3929.09, 3929.10, 3929.11, 3941.30,
3941.31, 3941.32, 3941.33,
3941.34, 3941.42, 3953.06, and 3953.11, and
3957.03 of the Revised
Code. (F) "Securities" has the same meaning as in section 1308.01
of the Revised
Code.
Sec. 3905.24. (A)(1) All records and other
information
obtained by the superintendent of insurance or the
superintendent's deputies, examiners, assistants, or other
employees, or
agents relating to an investigation of an applicant
for licensure under
this chapter, or of an agent, solicitor,
broker, or other person
licensed
or appointed under this chapter
or Chapter 3951., 3957., or 3959. of the Revised
Code,
are
confidential and are not public records as defined in section
149.43 of
the Revised Code
until the applicant, licensee, or
appointee is provided notice and opportunity for hearing
pursuant
to Chapter 119. of the Revised Code with respect to such records
or
information. If no administrative action is initiated with
respect to a
particular matter about which the superintendent
obtained records or other
information as part of an investigation,
all such records and information
relating to that matter shall
remain confidential for three years after the
file on the matter
is
closed. (2) Division (A)(1)
of this section applies only to
investigations that could result
in administrative action under
Title
XVII or
XXXIX or
Chapter 119. of the
Revised
Code. (B) The records and other information
described in division
(A) of
this section shall remain confidential for all
purposes
except when it is appropriate for the superintendent and
the
superintendent's deputies, examiners, assistants, or other
employees, or
agents
to take official action regarding the affairs
of the applicant, licensee, or appointee or in connection with
actual or potential criminal
proceedings. (C) Notwithstanding
divisions (A) and (B) of this section,
the
superintendent may do
either of the following: (1) Share records and other information that are the subject
of this section with the chief deputy rehabilitator, the chief
deputy liquidator, other deputy rehabilitators and liquidators,
and any other person employed by, or acting on behalf of, the
superintendent pursuant to Chapter 3901. or 3903. of the Revised
Code, with other local, state, federal, and international
regulatory and law enforcement agencies, with local, state, and
federal prosecutors, and with the national association of
insurance commissioners and its affiliates and subsidiaries,
provided that the recipient agrees to maintain the confidential
status of the confidential record or
other information and has
authority to do so; (2) Disclose records and other information that are the
subject of this section in the furtherance of any regulatory or
legal action brought by or on behalf of the superintendent or the
state, resulting from the exercise of the superintendent's
official duties. (D) Notwithstanding divisions (A), (B), and (C) of this
section, the superintendent may authorize the national association
of insurance commissioners and its affiliates and subsidiaries by
agreement to share confidential records and other
information
received pursuant to division (C)(1) of this section
with local,
state, federal, and international regulatory and law
enforcement
agencies and with local, state, and federal
prosecutors, provided
that the recipient agrees to maintain the
confidential status of
the confidential record or other information and has authority to
do so. (E) Notwithstanding divisions (A), (B), and (C) of this
section, the chief deputy rehabilitator, the chief deputy
liquidator, and other deputy rehabilitators and liquidators may
disclose records and other information that are the subject of
this section in the furtherance of any regulatory or legal action
brought by or on behalf of the superintendent, the rehabilitator,
the liquidator, or the state
resulting from the exercise of the
superintendent's official
duties in any capacity. (F) Nothing in this section shall prohibit the
superintendent from receiving records and other information in
accordance with section 3901.045 of the Revised Code. (G)(1) No waiver of any applicable privilege or claim of
confidentiality in the records and other information that are the
subject of this section shall occur as a result of sharing or
receiving records or other information as authorized in divisions
(C)(1), (D), and (F) of this section. (2) The disclosure of records or other information in
connection with a regulatory or legal action pursuant to
divisions
(C)(2) and (E) of this section does not prohibit an
insurer or any
other person from taking steps to limit the dissemination of the
record
or other information to persons not involved in or the
subject of
the regulatory or legal action on the basis of any
recognized privilege arising
under any other section of the
Revised Code or the common law. (H) Employees or agents of the department of insurance shall
not be required by any court in this state to testify in a civil
action, if the testimony concerns any matter related to records or
other information considered confidential under this
section of
which they have knowledge. Sec. 3905.421. (A) As used in this section: (1) "Home service contract" means a contract, however described or denominated by the issuer of the contract, whereby, for a predetermined fee, a person undertakes to repair or replace all or any part of any structural component, appliance, or system of a home necessitated by wear and tear, deterioration, or inherent defect that occurs on or after the effective date of the home service contract. "Home service contract" does not include either of the following:
(a) A performance guarantee given by either the builder of a home or the manufacturer or seller of a structural component, appliance, or system of a home;
(b) A service contract, guarantee, or warranty relating to the repair or service of a structural component, appliance, or system of a home, issued by a person that has serviced or repaired the structural component, appliance, or system.
(2) "Appliance" includes a stove, refrigerator, dishwasher, and any similar piece of equipment.
(3) "Structural component" includes the roof, foundation, basement, walls, ceiling, and similar components of a home.
(4) "System" includes the heating, cooling, plumbing, electrical system, and similar systems of a home.
(B) A home service contract is not insurance and its sale or issuance is not governed by the laws of this state relating to insurance. (C) The sale or other issuance of a home service contract constitutes a consumer transaction for purposes of Chapter 1345. of the Revised Code. A person who purchases a home service contract is a consumer as defined in division (D) of section 1345.01 of the Revised Code.
Section 2. That existing sections 3901.043, 3901.51, and 3905.24 and sections 3957.01, 3957.02, 3957.03, 3957.04, 3957.05, 3957.06, 3957.07, 3957.08, 3957.09, 3957.10, 3957.11, 3957.12, 3957.13, 3957.14, 3957.15, 3957.16, 3957.17, 3957.18, 3957.19, and 3957.99 of the Revised Code are hereby repealed.
Section 3. No home warranty company established and operating in this state on the effective date of this act pursuant to a certificate of authority issued by the Superintendent of Insurance under Chapter 3957. of the Revised Code shall sell, offer to sell, or solicit offers for, home service contracts on or after the effective date of this act as contracts regulated by Chapter 3957. of the Revised Code.
All home service contracts issued pursuant to Chapter 3957. of the Revised Code and outstanding on the effective date of this act shall be consummated. The interpretation and fulfillment of the terms and conditions of these outstanding contracts, and of any home service contract sold or issued by a home warranty company on or after the effective date of this act, is subject to Chapter 1345. of the Revised Code on and after the act's effective date, rather than to Ohio's Insurance Law.
A home warranty company with outstanding home service contracts in this state on the effective date of this act shall maintain a single reserve sufficient to provide for its liability to furnish repair and replacement services under those contracts. The amount of this reserve shall be calculated according to sound actuarial principles.
The repeal of Chapter 3957. of the Revised Code pursuant to this act does not: (1) invalidate any home service contract issued by a home warranty company prior to the effective date of this act; (2) discharge any liability based on the acts or conduct of a home warranty company or its agents or employees prior to the effective date of this act; (3) discharge or otherwise affect any other liability incurred by a home warranty company prior to the effective date of this act; or (4) affect a home warranty company's conduct of business in accordance with other provisions of state and federal law.
The repeal of Chapter 3957. of the Revised Code pursuant to this act does not affect the authority of licensed property and casualty insurers to issue home service contracts in accordance with the Ohio Insurance Law.
Section 4. Section 3901.043 of the Revised Code is
presented in
this act as a composite of the section as amended by
both Sub. H.B. 370 and Am. Sub. S.B. 67 of
the 122nd General
Assembly. The General Assembly, applying the
principle stated in
division (B) of section 1.52 of the Revised
Code that amendments
are to be harmonized if reasonably capable of
simultaneous
operation, finds that the composite is the resulting
version of
the section in effect prior to the effective date of
the section
as presented in this act.
Section 5. Section 3905.492 (3905.24) of the Revised Code is presented in
this act as a composite of the section as amended and renumbered by Sub. S.B. 129 and amended by Am. Sub. S.B. 138, both of
the 124th General Assembly. The General Assembly, applying the
principle stated in division (B) of section 1.52 of the Revised
Code that amendments are to be harmonized if reasonably capable of
simultaneous operation, finds that the composite is the resulting
version of the section in effect prior to the effective date of
the section as presented in this act.
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