Contracts; Service Warranty Act; administrative fees; modifying fee amount; effective date.
HB1085 amends the Oklahoma Service Warranty Act to change the administrative fee structure paid by service warranty associations and insurers. Under current law, provider fees and assessments are not subject to the premium tax, but are instead subject to a 2% administrative fee paid quarterly to the Insurance Commissioner, with a limited annual flat-fee option for certain qualifying entities. The bill phases that fee down over time and then replaces the percentage-based system with a flat annual amount.
Specifically, the bill reduces the administrative fee to 1.75% beginning January 1, 2026, to 1.0% beginning January 1, 2027, and then sets a flat $3,700 annual fee beginning January 1, 2028 for all service warranty associations and insurers. It also adjusts the alternative annual fee amounts for entities eligible to elect the flat-fee option during the transition period. The bill does not change the underlying licensing or reporting requirements for service warranty associations, which must still file annual financial statements and may be subject to quarterly statements or special reports required by the Commissioner.
The bill’s main legal effect is to amend 15 O.S. 2021, Section 141.14, which governs fees and reporting under the Service Warranty Act. It shifts revenue collection from a percentage-based administrative fee to a lower phased rate and then to a fixed annual fee, affecting service warranty providers, insurers, and the Insurance Department’s fee collection process. The bill is set to take effect January 1, 2026.
The available voting history suggests broad support for the measure. It passed the House Insurance Committee unanimously, cleared the House Commerce and Economic Development Oversight Committee with only one dissenting vote, and passed the House floor by a wide margin before receiving unanimous approval in the Senate committee. No committee transcripts were provided, so there is no recorded debate to indicate significant opposition or controversy in the materials supplied.
The main point of contention, to the extent one can be inferred from the bill’s structure, is the reduction and eventual replacement of the existing 2% administrative fee, which may reduce regulatory revenue for the Insurance Commissioner while lowering costs for service warranty businesses. The bill appears to balance industry relief with a predictable flat-fee system, and the strong vote totals indicate that any disagreement was limited.
HB1085 amends 15 O.S. Section 141.14 in the Service Warranty Act by changing the administrative fee imposed on service warranty associations and insurers. It lowers the fee from 2% to 1.75% in 2026, then to 1.0% in 2027, and replaces it with a flat $3,700 annual fee beginning in 2028, while also updating the alternative annual fee amounts for certain qualifying entities during the transition. The bill affects service warranty providers, insurers, and the Oklahoma Insurance Commissioner’s fee collection and oversight framework, but does not alter the basic licensing, filing, or reporting obligations under the Act.
The overall sentiment appears favorable and largely noncontroversial. The bill advanced with strong bipartisan support in both chambers, including unanimous committee approval in the Senate and unanimous approval in the House Insurance Committee. The floor and oversight committee votes show only limited opposition, suggesting the measure was generally viewed as a technical or industry-related adjustment rather than a major policy dispute.
The principal policy issue is the reduction in the administrative fee paid by service warranty associations and insurers, which benefits the industry but may reduce administrative revenue available to the Insurance Department. Any disagreement likely centered on whether the phased reduction and eventual flat fee appropriately balance regulatory funding with business costs. However, the vote margins indicate that opposition was limited and no major controversy is evident from the materials provided.