2009 Iowa Code
Title 13 - Commerce
Subtitle 1 - Insurance and Related Regulation
CHAPTER 516E - MOTOR VEHICLE SERVICE CONTRACTS
516E.5 - DISCLOSURE TO SERVICE CONTRACT HOLDERS -- CONTRACT PROVISIONS.

        516E.5  DISCLOSURE TO SERVICE CONTRACT HOLDERS --
      CONTRACT PROVISIONS.
         1. a.  A service contract insured by a reimbursement insurance
      policy shall not be issued, sold, or offered for sale in this state
      unless the contract conspicuously states that the obligations of the
      service company to the service contract holder are guaranteed under a
      reimbursement insurance policy, including a statement in
      substantially the following form:

         "Obligations of the service company under this service contract
      are guaranteed under a reimbursement insurance policy.  If the
      service company fails to pay or provide service on a claim within
      sixty days after proof of loss has been filed with the service
      company, the service contract holder is entitled to make a claim
      directly against the reimbursement insurance policy."

         b.  A claim against a reimbursement insurance policy shall
      also include a claim for return of the unearned service company fee
      paid for the service contract.  A service contract shall
      conspicuously state the name and address of the issuer of the
      reimbursement insurance policy for that service contract.
         c.  A service contract issued, sold, or offered for sale in
      this state that is not insured under a reimbursement insurance policy
      shall contain a statement in substantially the following form:

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

         2.  A service contract shall be written in clear, understandable
      language and the entire contract shall be printed or typed in
      easy-to-read type, size, and style, and shall not be issued, sold, or
      offered for sale in this state unless the contract does all of the
      following:
         a.  Clearly and conspicuously states the name and address of
      the service company and describes the service company's obligations
      to perform services or to arrange for the performance of services
      under the service contract.
         b.  Clearly and conspicuously states the name and address of
      the issuer of the reimbursement insurance policy, if applicable.
         c.  Identifies the service company obligated to perform the
      service under the service contract, any third-party administrator,
      and the service contract holder to the extent that the name and
      address of the service contract holder has been furnished by the
      service contract holder.
         d.  Sets forth the total purchase price of the service
      contract and the terms under which the purchase price of the service
      contract is to be paid.
         e.  Sets forth the procedure for making a claim, including a
      telephone number.
         f.  Clearly and conspicuously states the dates that coverage
      starts and ends and the existence, terms, and conditions of a
      deductible amount, if any.
         g.  Specifies the merchandise or services, or both, to be
      provided and clearly states any and all limitations, exceptions, or
      exclusions.
         h.  Sets forth the conditions on which substitution of
      services will be allowed.
         i.  Sets forth all of the obligations and duties of the
      service contract holder, including but not limited to the duty to
      protect against any further damage to the motor vehicle, and the
      obligation to notify the service company in advance of any repair, if
      any.
         j.  Sets forth any and all terms, restrictions, or conditions
      governing transferability of the service contract, if any.
         k.  Describes or references any and all applicable provisions
      of the Iowa consumer credit code, chapter 537.
         l.  States the name and address of the commissioner.
         m.  Sets forth any and all conditions on which the service
      contract may be canceled, the terms and conditions for the refund of
      any portion of the purchase price, the identity of the person
      primarily liable to provide any refund, and the identity of any other
      person liable to provide any portion of the refund.  If the service
      contract holder cancels the service contract, the service company
      shall mail a written notice of termination to the service contract
      holder within fifteen days of the date of the termination.
         n.  Permits the service contract holder to cancel and return
      the service contract within at least twenty days of the date of
      mailing the service contract to the service contract holder or within
      at least ten days after delivery of the service contract if the
      service contract is delivered at the time of sale of the service
      contract, or within a longer period of time as permitted under the
      service contract.  If no claim has been made under the service
      contract prior to its return, the service contract is void and the
      full purchase price of the service contract shall be refunded to the
      service contract holder.  A ten percent penalty shall be added each
      month to a refund that is not paid to a service contract holder
      within thirty days of the return of the service contract to the
      service company.  The applicable time period for cancellation of a
      service contract shall apply only to the original service contract
      holder that purchased the service contract.
         3.  A complete copy of the terms of the service contract shall be
      delivered to the prospective service contract holder at or before the
      time that the prospective service contract holder makes application
      for the service contract.  If there is no separate application
      procedure, then a complete copy of the service contract shall be
      delivered to the service contract holder at or before the time the
      service contract holder becomes bound under the contract.  

         85 Acts, ch 45, §5
         CS85, §321I.5
         90 Acts, ch 1145, § 4; 94 Acts, ch 1031, §1; 98 Acts, ch 1189, §2,
      3; 2000 Acts, ch 1147, §15
         C2001, §516E.5
         2005 Acts, ch 70, §29; 2006 Acts, ch 1117, §85, 86
         Referred to in § 714H.3