DATE: June 25, 2002

TO: Dealers, General Managers, F&I Managers

FROM: Mark S. Krejci

RE: New Legislation in Florida Regarding the Sale of Vehicle Protection Products

Recently the 2002 Florida Legislature enacted legislation for vested limited regulatory authority over "Vehicle Protection Products" in the Florida Department of Insurance. These "Recently the 2002 Florida Legislature enacted legislation for vested limited regulatory authority over "Vehicle Protection Products" in the Florida Department of Insurance. These "Vehicle Protection Products" includes window etching, vehicle body parts marking, car alarms and other applications to automobiles that aid in prevention of automobile theft, and that also provides for the payment of certain warranty specified damages in the event the product fails to prevent theft to the vehicle or it's recovery after a theft within a specified period.

In essence, the legislation moved "Vehicle Protection Products" under Chapter 634 of the Florida Statute, Motor Vehicle Services Agreement Companies. This means that all products have to be offered by an approved Florida 634 company, that retail rates have to be approved by the department and that there will be no allowance for discounting or charging in excess of the Florida approved Filed Retail Rates by the respective vehicle protection product company or dealer.

The Florida Department of Insurance has allowed appropriate time for all companies to become compliant with the new regulations through application to the department. Representatives of the N.V.P.A. (National Vehicle Protection Association), which our underwriters belong to, met with Florida Insurance Commissioner, Tom Gallagher, to coordinate a compliance schedule for currently operating companies. N.V.P.A. lawyers in Tallahassee have also advised us that regulators within the department communicated their desire to work with vehicle protection providers to assist their compliance efforts, and that all currently operating companies will have the opportunity to comply with the new law.

At the time currently, many companies that are selling anti-theft products are in the process of filing with the department or may have already filed, and the department is being accommodating to allow everyone to become compliant in a timely manner.

Additionally, for those dealers who are currently selling our products, please be aware our company has already been approved by the Florida Department of Insurance.

If you have any questions, please feel free to call me at (813) 223-0085, ext. 21. and I will be happy to forward any appropriate information.

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