Bill description: Senate Bill 1077 amends the Idaho regulations that concern Vehicle Insurance Contracts and regulates companies that provide vehicle-theft protection services.

Rating: -3

Analyst’s note: This bill has two primary sections that deal with two different matters, one being a new program. First, it shifts the location of the Motor Vehicle Service Contract Act within the Code As this is done, a few changes are made to it. The biggest change that results is who has final authority. Currently, the Office of the Attorney General maintains the authority. SB 1077 would transfer the administration of this program, to the Department of Insurance.

Secondly, the bill introduces the Idaho Vehicle Theft Protection Program Act. This act largely duplicates the same language of Motor Vehicle Service Contract Act. This new act  however applies to anti-theft services, such as ignition locks, tracking devices, or theft insurance.

The regulation which this bill outlines is a passive form as it does not require explicit registration or licensing. Instead, this form of regulation has procedures which these companies must follow in performing their business, and penalties if they fail to do so.

Does it directly or indirectly create or increase penalties for victimless crimes or non-restorative penalties for non- violent crimes? Conversely, does it eliminate or decrease penalties for victimless crimes or non-restorative penalties for non-violent crimes? 

Under the Idaho Vehicle Theft Protection Program Act new penalties are listed for what are deemed unfair or deceptive practices. For the settlement of claims, a penalty for improper practice on behalf of insurance companies would be a fine of up to $10,000 (Page 10, Line 27. Fine listed in Section 41-1329). New fines would also be applied to other business practices, such as defamation of competition, boycotting others, or misinterpreting language. The punishment for these actions could be up to a $5,000 administrative fine, in addition to a $1,000 penalty, as well as six months in jail (Page 10, Line 23. Fines listed in Section 41-1327). (-1)

Does it give government any new, additional, or expanded power to prohibit, restrict, or regulate activities in the free market? Conversely, does it eliminate or reduce government intervention in the market? 
The new regulation of theft protection program warranties expands the scope of regulation in this industry. Theft protection programs are devices installed on a vehicle and prevents loss or damage from theft, or warranties to protect from theft. These devices and service will be subject to similar regulations that fall upon the aforementioned companies that provide motor vehicle services. (-1)

Does it increase barriers to entry into the market? Examples include occupational licensure, the minimum wage, and restrictions on home businesses. Conversely, does it remove barriers to entry into the market? 

Increasing regulation on this industry creates a barrier to new entrants. If new companies desire to offer theft protection services, they would have to first meet the regulatory requirements added with this new act. (-1)

Update: This analysis was updated to better reflect the content of this bill. 

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