Bill would clarify regulation of ancillary auto products

The Banking, Commerce and Insurance Committee heard testimony Feb. 13 on a bill meant to clarify the regulatory framework for motor vehicle ancillary product contracts.

LB1054, introduced by Omaha Sen. Beau McCoy, would specify that service contracts for ancillary motor vehicle products are not insurance and not otherwise subject to the state’s insurance code.

The bill defines ancillary products as a protective chemical, substance, device, system or service installed on or applied to a motor vehicle, which is designed to prevent loss or damage from a specific cause.

Such products would include, but not be limited to:
• additives;
• alarm systems;
• steering locks;
• fuel and ignition kill switches;
• part marketing products; and
• electronic, radio and satellite tracking devices.

McCoy said ancillary products are very popular with consumers and that the bill would provide regulatory certainty regarding such products.

“It’s my hope … that at least this provides some measure of a record to say what is an insurance product and what is not,” he said.

Korby Gilbertson, representing the Motor Vehicular Ancillary Products Association, testified in support of the bill. She said the state Department of Insurance currently does not regulate ancillary products and has no interest in doing so.

No opposition testimony was given and the committee took no immediate action on the bill.