N.Y. Insurance Law § 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.