385.306. Contract requirements, contents.
Contract requirements, contents.
385.306. 1. Service contracts marketed, issued, sold, or offered forsale in this state shall be written in clear, conspicuous, andunderstandable language, and the entire contract shall be printed or typedin easy-to-read type and conspicuously disclose the requirements in thissection, as applicable.
2. Service contracts insured under a reimbursement insurance policyunder subdivision (3) of subsection 4 of section 385.302 shall contain astatement in substantially the following form: "Obligations of theprovider under this service contract are guaranteed under a reimbursementinsurance policy. If the provider fails to pay or provide service on aclaim within sixty days after proof of loss has been filed, the contractholder is entitled to make a claim directly against the insurance company."A claim against the provider may also include a claim for return of theunearned provider fee. The service contract also shall state the name andaddress of the insurer.
3. Service contracts not insured under a reimbursement insurancepolicy under subdivision (3) of subsection 4 of section 385.302 shallcontain a statement in substantially the following form: "Obligations ofthe provider under this service contract are backed only by the full faithand credit of the provider (issuer) and are not guaranteed under areimbursement insurance policy." A claim against the provider shall alsoinclude a claim for return of the unearned provider fee. The servicecontract shall also state the name and address of the provider.
4. Service contracts shall identify any administrator, the providerobligated to perform under the contract, and the service contract seller,if different than the provider or administrator. The identities of suchparties are not required to be preprinted on the service contract and maybe added to the service contract prior to delivery to the contract holder.
5. Service contracts shall state the total purchase price and theterms under which the service contract is sold. The purchase price is notrequired to be preprinted on the service contract and may be negotiated atthe time of sale with the service contract holder.
6. If prior approval of repair work is required, the servicecontracts shall state the procedure for obtaining prior approval and formaking a claim, including a toll-free telephone number for claim serviceand a procedure for obtaining emergency repairs performed outside of normalbusiness hours.
7. Service contracts shall state the existence of any deductibleamount.
8. Service contracts shall specify the merchandise and services to beprovided and any limitations, exceptions, or exclusions.
9. Service contracts shall state the conditions upon which the use ofnonoriginal manufacturers' parts, refurbished merchandise, or substituteservice may be allowed. Conditions stated shall comply with applicablestate and federal laws.
10. Service contracts shall state any terms, restrictions, orconditions governing the transferability of the service contract.
11. Service contracts shall state any terms, restrictions, orconditions governing termination of the service agreement by the servicecontract holder and provider.
12. Service contracts for which the service contract holder pays aseparate, identified consideration shall require every provider to permitthe service contract holder to return the contract within at least twentydays of the date of mailing of the service contract or within at least tendays if the service contract is delivered at the time of sale or within alonger time period permitted under the contract. If no claim has been madeunder the contract, the contract is void and the provider shall refund tothe contract holder the full purchase price of the contract. A ten percentpenalty per month shall be added to a refund that is not paid withinforty-five days of return of the contract to the provider. The applicablefree-look time periods on service contracts shall apply only to theoriginal service contract purchaser, and only if no claim has been madeprior to its return to the provider.
13. Service contracts shall set forth all of the obligations andduties of the service contract holder, such as the duty to protect againstany further damage and the requirement for certain service and maintenance.
14. Service contracts shall state clearly whether or not the servicecontract provides for or excludes consequential damages, preexistingconditions, or events covered under the original manufacturer's warranty.
15. Service contracts shall state any limitations on the number orvalue of repairs, replacements, or monetary settlements, as applicable,that will be provided during the term of coverage.
(L. 2007 H.B. 221)Effective 1-01-08