(1) To assure the faithful performance of its obligations to its members or subscribers, each motor vehicle service agreement company shall, prior to issuance of its license by the office, deposit with the department securities of the type eligible for deposit by insurers under s. 625.52 and having at all times a market value of not less than $200,000; however, service agreement companies maintaining an unearned gross written premium of less than $750,000 shall have on deposit with the department $100,000. After 1 year from the date of initial licensure, a service agreement company may file a request for the release of a portion of the deposit and thereafter requests may be made quarterly. A request may be granted only after the office has received and approved the company’s current quarterly or annual financial statement. However, at no time shall the deposit be less than $100,000.
(2) In addition to the deposits otherwise required pursuant to this section, the office may, after notice and hearing, require any company for good cause shown to deposit and maintain deposited in trust for the protection of the contract holders and creditors of the company, for such time as the office deems necessary, securities eligible for such deposit under s. 625.52 having a value of not less than the amount which the office determines is necessary, which amount shall be neither less than $100,000, nor more than $500,000, depending on the obligation of the company in this state.
(3) The state shall be responsible for the safekeeping of all securities deposited with the department under this act. Such securities shall not, on account of being in this state, be subject to taxation, but shall be held exclusively and solely to guarantee the faithful performance by the company of its obligations to its members or subscribers.
(4) The depositing company shall, during its solvency, have the right to exchange or substitute other securities of like quality and value for securities so on deposit, to receive the interest and other income accruing on such securities, and to inspect the deposit at all reasonable times.
(5) Such deposit shall be maintained unimpaired as long as the company continues in business or from offices in this state. Whenever the company ceases to do business in or from offices in this state and furnishes to the office proof satisfactory to it that it has discharged or otherwise adequately provided for all its obligations to its members or subscribers in this state, the office and department shall release the deposited securities to the parties entitled thereto, on presentation of the receipts of the department for such securities.
History.—s. 5, ch. 59-110; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 4, ch. 78-231; ss. 2, 3, ch. 81-318; ss. 5, 32, 33, ch. 82-234; s. 132, ch. 83-216; ss. 13, 68, ch. 91-106; s. 184, ch. 91-108; s. 20, ch. 93-195; s. 1421, ch. 2003-261.