2006 Code of Virginia § 38.2-2608 - Home protection contracts; filing; form and contents; application or agreement to purchase; regulat...

38.2-2608. Home protection contracts; filing; form and contents;application or agreement to purchase; regulation of rates and charges.

A. No home protection contract shall be issued or used in this Commonwealthunless it has been filed with and approved by the Commission.

B. No home protection contract shall be issued in this Commonwealth unless it:

1. Is written in simple and readable words with common meanings and isunderstandable without special insurance knowledge or training;

2. Specifically sets forth:

a. The services to be performed by the home protection company and the termsand conditions of the performance;

b. Any service fee or deductible amount applicable per claim or peroccurrence;

c. Each of the systems, appliances, and structural components covered by thecontract;

d. All exclusions and limitations respecting the extent of coverage;

e. The period during which the contract will remain in effect and thecancellation provision;

f. All limitations regarding the performance of services, including anyrestrictions as to the time periods when services will be performed;

3. Provides for the initiation of covered services contracted for upontelephonic request without first requiring the filing of written claim formsor written applications; and

4. Provides for the initiation of covered services contracted for by or underthe direction of the home protection company within seventy-two hours of therequest for the service by the contract holder, and provides for thecompletion of the services as soon as reasonably possible. For malfunctionsof furnace or heating systems during the winter months, the contract mustprovide for the initiation of services immediately.

C. Every application for or agreement to purchase a home protection contractshall include a statement that the purchase of the contract is not mandatoryand may be waived, and shall include a statement of the premium.

D. 1. Chapter 20 ( 38.2-2000 et seq.) of this title shall apply to the ratescharged by home protection companies until such time as the Commissiondetermines, after proper notice and hearing, that sufficient competitionexists in the home protection industry to justify its regulation underChapter 19 ( 38.2-1900 et seq.) of this title. Upon this determination,Chapter 19 of this title shall apply to the rates charged by home protectioncompanies.

2. No home protection company shall make or issue a contract except inaccordance with the filings that are in effect for that company. No homeprotection company or any of its representatives shall charge or receive anyfee, compensation or consideration for the contract that is not included inthe rate in effect for that company.

3. The rates charged shall be based on sound actuarial principles and shallnot be excessive, inadequate, or unfairly discriminatory as defined in 38.2-1904.

(1981, c. 530, 38.1-938; 1984, c. 640; 1986, c. 562.)