§ 7905 — Required disclosures; service contract

§ 7905. Required disclosures; service contract. (a) Service contracts\nmarketed, sold or offered for sale, issued, made, proposed to be made or\nadministered in this state shall be dated and written in clear,\nunderstandable language and the entire service contract shall be printed\nor typed in easy to read type and disclose the requirements of this\nsection, as applicable. The date the service contract is issued is not\nrequired to be preprinted on the service contract and may be added or\nattached to the service contract at the time of sale.\n (b) Service contracts insured under a service contract reimbursement\ninsurance policy pursuant to paragarph one of subsection (c) of section\nseven thousand nine hundred three of this article shall contain a\nstatement in substantially the following form: "Obligations of the\nprovider under this service contract are insured under a service\ncontract reimbursement insurance policy. If the provider fails to pay or\nprovide service on a claim within sixty days after proof of loss has\nbeen filed, the contract holder is entitled to make a claim directly\nagainst the insurer under the service contract reimbursement insurance\npolicy." The service contract shall also state the name and address and\na toll-free telephone number of the insurer under the related service\ncontract reimbursement insurance policy.\n (c) Service contracts not insured under a service contract\nreimbursement insurance policy pursuant to paragraph one of subsection\n(c) of section seven thousand nine hundred three of this article shall\ncontain a statement substantially to the following effect: "Obligations\nof the provider under this service contract are backed by the full faith\nand credit of the provider." The service contract shall also state the\nname and address of the provider thereunder.\n (d) Service contracts shall identify any administrator if different\nfrom the provider or seller, the provider, and the service contract\nseller. The identities of such parties are not required to be\npreprinted on the service contract and may be added to the service\ncontract at the time of sale. Service contracts shall clearly state the\nprocedure that the service contract holder must take to obtain service\nunder the terms and conditions of the service contract.\n (e) Service contracts shall state the total purchase price and the\nterms and conditions under which the service contract is sold. The\npurchase price is not required to be preprinted on the service contract\nand may be negotiated at the time of sale with the service contract\nholder.\n (f) If prior approval of repair work is required, the service\ncontracts shall state the procedure for obtaining prior approval and for\nmaking a claim, including a toll free telephone number for claim service\nand if the service contracts provide services essential to public\nhealth, safety or welfare, the service contracts shall either provide\nfor twenty-four hour telephone assistance or state the procedure for\nobtaining emergency repairs performed outside of normal business hours.\nThe superintendent may promulgate regulations necessary to effectuate\nthis subsection as authorized by section seven thousand nine hundred\neleven of this article.\n (g) Service contracts shall state the existence of any deductible\namount thereunder if applicable.\n (h) Service contracts shall specify the merchandise and services to be\nprovided and any limitations, exceptions or exclusions from coverage\nthereunder if applicable.\n (i) Service contracts covering motor vehicles shall state whether the\nuse of non-original manufacturers' parts may be allowed. Conditions\nstated shall comply with applicable state and federal laws.\n (j) Service contracts shall state any terms, restrictions or\nconditions governing the transferability of such service contracts.\n (k) Service contracts shall state the terms, restrictions or\nconditions governing termination of the service contract by the parties\nto the service contract. The provider of the service contract shall mail\na written notice to the service contract holder at the last known\naddress of the service contract holder contained in the records of the\nprovider at least fifteen days prior to cancellation by the provider.\nThe notice shall state the effective date of the cancellation and the\nreason for the cancellation. Written notice is not required if the\nreason for cancellation is nonpayment of the provider fee, a material\nmisrepresentation, or a substantial breach of duties by the service\ncontract holder relating to the covered property or its use.\n (l) Service contracts shall set forth all of the obligations and\nduties of the service contract holder, such as the duty to protect\nagainst any further damage and any requirement to follow owner's manual\ninstructions.\n (m) Service contracts shall clearly state whether or not the service\ncontract provides for or excludes preexisting conditions.\n (n) Service contracts shall contain a statement of the service\ncontract holder's right to return the contract within at least twenty\ndays of the date of mailing of the service contract or within at least\nten days if the service contract is delivered at the time of the sale or\nwithin a longer time period permitted under the contract. If no claim\nhas been made under the contract, the contract shall be void and the\nprovider shall refund to the contract holder the full purchase price of\nthe contract. The service contract shall also contain a statement that\na ten percent penalty per month shall be added to a refund that is not\nmade within thirty days of return of the contract to the provider.\n