2011 Louisiana Laws
Revised Statutes
TITLE 22 — Insurance
RS 22:1806.5 — Required disclosures; service contracts

§1806.5. Required disclosures; service contracts

A. Home service contracts marketed, sold, offered for sale, issued, made, proposed to be made, or administered in this state shall be written, printed, or typed in clear, understandable language that is easy to read and shall disclose the requirements set forth in this Section, as applicable.

B. Home service contracts insured under a reimbursement insurance policy provided for in this Part shall contain a statement in substantially the following form: "Obligations of the provider under this service contract are insured under a service contract reimbursement insurance policy. If the provider fails to pay or provide service on a claim within sixty days after proof of loss has been filed, the contract holder is entitled to make a claim directly against the insurance company." A claim against the provider shall also include a claim for return of the unearned provider fee. The service contract shall also state the name and address of the insurer.

C. Home service contracts not insured under a reimbursement insurance policy shall contain a statement in substantially the following form: "Obligations of the provider under this service contract are backed by the full faith and credit of the provider."

D. Home service contracts shall state the name and address of the provider and shall identify any administrator if different from the provider. Home service contracts shall also state the name of the service contract seller and name of the service contract holder to the extent that the name of the service contract holder has been furnished to the service contract provider. The identities of parties are not required to be preprinted on the service contract and may be added to the service contract at the time of sale.

E. Home service contracts shall state the total purchase price and the terms under which the service contract is sold. The purchase price is not required to be preprinted on the service contract and may be negotiated at the time of sale with the service contract holder.

F. Home service contracts shall state the existence of any deductible amount, if applicable.

G. Home service contracts shall specify the goods and services to be provided and any limitations, exceptions, or exclusions.

H. Home service contracts shall state any restrictions governing the transferability of the service contract, if applicable.

I. Home service contracts shall state the terms, restrictions, or conditions governing cancellation of the service contract prior to the termination or expiration date of the service contract by either the provider or the service contract holder. The provider of the service contract shall mail a written notice to the contract holder at the last known address of the service contract holder contained in the records of the provider at least fifteen days prior to cancellation by the provider. Prior notice is not required if the reason for cancellation is nonpayment of the provider fee, a material misrepresentation by the service contract holder to the provider, or a substantial breach of duties by the service contract holder relating to the covered product or its use. The notice shall state the effective date of the cancellation and the reason for the cancellation.

J. Home service contracts shall set forth all of the obligations and duties of the service contract holder, such as the duty to protect against any further damage and any requirement to follow an owner's manual.

K. Home service contracts shall state whether or not the service contract provides for or excludes consequential damages or preexisting conditions, if applicable. Service contracts may, but are not required to, cover damage resulting from rust, corrosion, or damage caused by a noncovered part or system.

L. If prior approval of repair work is required, a home service contract shall state the procedure for obtaining prior approval and for making a claim, including a toll-free telephone number for claim service and a procedure for obtaining emergency repairs performed outside of normal business hours.

Acts 2009, No. 101, §1, eff. Jan. 1, 2010.