2013 New York Consolidated Laws
ISC - Insurance
Article 79 - (7901 - 7913) SERVICE CONTRACTS
7905 - Required disclosures; service contract.

 
    §  7905. Required disclosures; service contract. (a) Service contracts
  marketed, sold or offered for sale, issued, made, proposed to be made or
  administered in  this  state  shall  be  dated  and  written  in  clear,
  understandable language and the entire service contract shall be printed
  or  typed  in  easy  to  read type and disclose the requirements of this
  section, as applicable.  The date the service contract is issued is  not
  required  to  be  preprinted on the service contract and may be added or
  attached to the service contract at the time of sale.
    (b) Service contracts insured under a service  contract  reimbursement
  insurance  policy pursuant to paragarph one of subsection (c) of section
  seven thousand nine hundred  three  of  this  article  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  insurer under the service contract reimbursement insurance
  policy." The service contract shall also state the name and address  and
  a  toll-free  telephone  number of the insurer under the related service
  contract reimbursement insurance policy.
    (c)  Service  contracts  not  insured   under   a   service   contract
  reimbursement  insurance  policy pursuant to paragraph one of subsection
  (c) of section seven thousand nine hundred three of this  article  shall
  contain  a statement substantially to the following effect: "Obligations
  of the provider under this service contract are backed by the full faith
  and credit of the provider." The service contract shall also  state  the
  name and address of the provider thereunder.
    (d)  Service  contracts  shall identify any administrator if different
  from the provider or seller, the  provider,  and  the  service  contract
  seller.    The  identities  of  such  parties  are  not  required  to be
  preprinted on the service contract and  may  be  added  to  the  service
  contract at the time of sale.  Service contracts shall clearly state the
  procedure  that  the service contract holder must take to obtain service
  under the terms and conditions of the service contract.
    (e) Service contracts shall state the total  purchase  price  and  the
  terms  and  conditions  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) If  prior  approval  of  repair  work  is  required,  the  service
  contracts shall state the procedure for obtaining prior approval and for
  making a claim, including a toll free telephone number for claim service
  and  if  the  service  contracts  provide  services  essential to public
  health, safety or welfare, the service contracts  shall  either  provide
  for  twenty-four  hour  telephone  assistance or state the procedure for
  obtaining emergency repairs performed outside of normal business  hours.
  The  superintendent  may  promulgate regulations necessary to effectuate
  this subsection as authorized by section  seven  thousand  nine  hundred
  eleven of this article.
    (g)  Service  contracts  shall  state  the existence of any deductible
  amount thereunder if applicable.
    (h) Service contracts shall specify the merchandise and services to be
  provided and any limitations, exceptions  or  exclusions  from  coverage
  thereunder if applicable.
    (i)  Service contracts covering motor vehicles shall state whether the
  use of non-original manufacturers' parts may  be  allowed.    Conditions
  stated shall comply with applicable state and federal laws.

    (j)   Service   contracts  shall  state  any  terms,  restrictions  or
  conditions governing the transferability of such service contracts.
    (k)   Service   contracts  shall  state  the  terms,  restrictions  or
  conditions governing termination of the service contract by the  parties
  to the service contract. The provider of the service contract shall mail
  a  written  notice  to  the  service  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.
  The notice shall state the effective date of the  cancellation  and  the
  reason  for  the  cancellation.  Written  notice  is not required if the
  reason for cancellation is nonpayment of the provider  fee,  a  material
  misrepresentation,  or  a  substantial  breach  of duties by the service
  contract holder relating to the covered property or its use.
    (l) 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 owner's  manual
  instructions.
    (m)  Service  contracts shall clearly state whether or not the service
  contract provides for or excludes preexisting conditions.
    (n) Service  contracts  shall  contain  a  statement  of  the  service
  contract  holder's  right  to return the contract within at least twenty
  days of the date of mailing of the service contract or within  at  least
  ten days if the service contract is delivered at the time of the sale or
  within  a  longer  time period permitted under the contract. If no claim
  has been made under the contract, the contract shall  be  void  and  the
  provider  shall refund to the contract holder the full purchase price of
  the contract.  The service contract shall also contain a statement  that
  a  ten  percent penalty per month shall be added to a refund that is not
  made within thirty days of return of the contract to the provider.