§481X-6 - Service contracts; receipt; disclosures.

[§481X-6] Service contracts; receipt;
disclosures. (a) Providers shall provide purchasers of a service contract
with:

(1) A receipt for or other written evidence of the
purchase of the service contract that shall be provided to the service contract
holder;

(2) A copy of the service contract that shall be
provided within a reasonable period of time from the date of purchase; and

(3) Except for offers or sales of service contracts
by telephone, mail, or electronic means, a written copy of the basic terms and
conditions of the service contract to be made available to the purchaser where
the purchaser is physically present at the point of sale.

(b) Service contracts shall be written in
clear, understandable language, and shall be printed or typed in a typeface and
format that is easy to read.

(1) State the name and address of:

(A) The provider; and

(B) The administrator of the contract, if
different from the provider;

(2) Identify:

(A) The service contract seller; and

(B) The contract holder, to the extent that
the contract holder has furnished the contract seller, administrator, or
provider with that information;

(3) The terms of the sale, including the purchase
price;

(4) The procedure the contract holder must follow to
obtain service;

(5) Any deductible amount that applies;

(6) The specific merchandise and services to be
provided, and any limitations, exceptions, or exclusions;

(7) Where the contract covers a motor vehicle,
whether the use of nonoriginal manufacturer's parts is allowed;

(8) Any restrictions governing the transferability of
the service contract that apply;

(9) The terms, restrictions, or conditions governing
the return or cancellation of the service contract by either the provider or
contract holder prior to the contract's termination or expiration date;

(10) The obligations and duties of the contract
holder, such as the duty to protect against any further damage, or to follow
owner's manual instructions; and

(11) Any provision for, or exclusion of consequential
damages or preexisting conditions that applies.

The information under paragraphs (1) and (2) shall
not be required to be preprinted on the service contract and may be added to
the service contract at the time of sale. The purchase price under paragraph
(3) shall not be required to be preprinted on the service contract and may be
negotiated with the contract holder at the time of sale.

(d) Service contracts insured under a
contractual liability insurance policy shall include the name and address of
the insurer and contain a statement substantially similar to the following:

"Obligations
of the provider under this service contract are insured under a service
contract contractual liability insurance policy."

(e) Service contracts not insured under a
contractual liability insurance policy shall contain a statement substantially
similar to the following:

"Obligations
of the provider under this service contract are backed by the full faith and
credit of the provider."

[L 2000, c 221, pt of §2]