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Auto dealer protection products singled out as non-insurance by trade group; committee questioned regulatory costs
Summary
A trade association representing vehicle-protection product providers urged the committee to designate dealer-sold vehicle-protection agreements as contract products rather than insurance, while lawmakers sought clarity on consumer complaint handling and fee assessments.
A national trade association representing providers and retailers of vehicle-protection products urged the committee to clarify that typical dealer-sold protection agreements are not insurance, arguing the change would align Connecticut with about 46 other states and preserve consumer access to repair and replacement benefits not covered by traditional auto insurance.
Bill summary and industry view
Bill proponents said the products—agreements to repair tires, replace key fobs, repair interior damage or pay benefits for theft—are contractual protections distinct from insurance. Bill Gunnison, legislative and regulatory counsel for the Motor Vehicle Protection Products Association, told lawmakers the measure would "establish that these kinds of agreements do not constitute insurance," add disclosure requirements, and include financial-assurance protections for consumers.
Consumer-protection and regulatory questions
Gunnison said providers favor disclosure requirements describing how to file claims, access benefits and cancel agreements. He also said the industry does not expect the bill to require additional Department of Insurance resources, though legislators expressed skepticism and asked whether the department would need additional staff to handle complaints and what fee assessments (to cover enforcement) would look like.
Committee scrutiny and next steps
Lawmakers asked whether the Department of Insurance's consumer-affairs division would be used for complaint handling and whether the bill's fee-assessment language was necessary. Gunnison suggested further discussion with the department to quantify any resource needs and finalize assessment language. No vote occurred at the public hearing.
