2009 Iowa Code
Title 13 - Commerce
Subtitle 1 - Insurance and Related Regulation
CHAPTER 523C - RESIDENTIAL SERVICE CONTRACTS
523C.8A - ISSUANCE OF RESIDENTIAL SERVICE CONTRACT WITHOUT CONSIDERATION PROHIBITED.

        523C.8A  ISSUANCE OF RESIDENTIAL SERVICE CONTRACT
      WITHOUT CONSIDERATION PROHIBITED.
         1.  Except as provided in subsection 2, furnishing a residential
      service contract to any person without charge for the applicable
      contract fees constitutes a violation of this chapter.  A residential
      service contract providing for listing period coverage shall not be
      issued or delivered unless it provides for consideration for such
      coverage.  The consideration may consist of a bona fide promise to
      pay the applicable residential service contract fees at the close of
      the sale.  However, if a contract is subsequently canceled as a
      result of the failure to close such a sale, including such failure
      due to cancellation, expiration, or other termination of any real
      estate listing agreement on the residence, the residential service
      contract holder shall pay to the service company, at the time of
      cancellation of the residential service contract, the lesser of the
      actual costs of such service or a pro rata portion of the applicable
      annual residential service contract fees based on the number of days
      the residential service contract remained in effect, together with
      administrative costs incurred by the service company as a result of
      the cancellation.
         2. a.  Notwithstanding subsection 1, a service company may
      offer a residential service contract providing for listing period
      coverage for consideration which consists of both of the following:
         (1)  The contract holder's bona fide promise to pay, upon the
      close of sale, the applicable residential service contract fees for
      coverage of the residence for at least one year from the close of
      sale.
         (2)  Actual payment of the costs of any and all services performed
      under the residential service contract during the term of the listing
      period coverage by the contract holder to the service contractor.
         b.  Upon the close of sale and actual payment of the contract
      fees referred to in paragraph "a", subparagraph (1), the service
      company shall reimburse the listing period coverage contract holder
      for all legitimate service costs incurred and paid under the
      residential service contract during the term of the listing period
      coverage with offset only for any deductible or service call fees
      remaining due and payable with respect to service performed under the
      residential service contract during the term of the listing period
      coverage.
         3.  For purposes of this section:
         a.  "Close of sale" means the time an interest in, or title
      to, a home to which the interest or title attaches is sold or
      transferred.
         b.  "Listing period coverage" means coverage provided prior to
      the close of sale.  

         93 Acts, ch 60, §9