California Business and Professions Code 9855.3 – (a) (1) The service contract form, along with all documents …
(a) (1) The service contract form, along with all documents incorporated by reference into a service contract per the contract form, to be issued by the service contractor shall be filed with the director by the service contractor no later than 30 days prior to its use.
(2) The term “documents incorporated by reference” shall mean all documents that are expressly made a part of the contract but that are not a part of the body of the contract. These documents may include, but are not limited to, invoices, declaration pages, and sales receipts.
Terms Used In California Business and Professions Code 9855.3
- administrator: means a person who performs or arranges the collection, maintenance, or disbursement of moneys to compensate any party for claims or repairs pursuant to a service contract, and who also performs or arranges any of the following activities on behalf of service contract sellers:
California Business and Professions Code 9855
- Contract: A legal written agreement that becomes binding when signed.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Director: means the Director of Consumer Affairs. See California Business and Professions Code 9801
- Escrow: Money given to a third party to be held for payment until certain conditions are met.
- seller: means a person who sells or offers to sell a service contract to a service contractholder, including a person who is the obligor under a service contract sold by the seller, manufacturer, or repairer of the product covered by the service contract. See California Business and Professions Code 9855
- Service contract: means a contract in writing to perform, over a fixed period of time or for a specified duration, services relating to the maintenance, replacement, or repair of consumer goods and may include provisions for incidental payment of indemnity under limited circumstances, including, but not limited to, power surges, food spoilage, or accidental damage from handling. See California Business and Professions Code 9855
- Service contract reimbursement insurance policy: means a policy of insurance issued by an insurer admitted to do business in this state providing coverage for all obligations and liabilities incurred by a service contract seller under the terms of the service contracts sold in this state by the service contract seller to a service contractholder. See California Business and Professions Code 9855
- Service contractor: means a service contract administrator or a service contract seller. See California Business and Professions Code 9855
(3) Each service contract form shall be identified by a unique form number and date of last revision.
(4) Once a service contract form is filed with the director under paragraph (1), no further changes shall be made to the text of the contract form without resubmission of the contract form to the director, unless the text was indicated as variable text when the contract is initially filed with the director.
(b) Every service contract administrator shall file with its application for registration, and thereafter, with its application for registration renewal, a service contract reimbursement insurance policy.
(c) Every service contract seller shall file with his or her application for registration, and thereafter with his or her application for registration renewal, one of the following:
(1) The most recent annual report on Form 10-K required by the Securities and Exchange Commission, reflecting a net worth greater than the sum of the deferred revenues from service contracts in force. If the service contractor is a foreign corporation that files a comparable audited financial statement with its home government or with the United States government, the director may deem that statement an acceptable substitute for Form 10-K.
(2) A service contract reimbursement insurance policy.
(3) Evidence that his or her service contracts are administered by a service contract administrator who has obtained a service contract reimbursement insurance policy covering the seller’s service contracts.
(4) Evidence of a funded account held in escrow equal to a minimum of 25 percent of the deferred revenues from the service contracts in force.
(Amended by Stats. 2018, Ch. 578, Sec. 20. (SB 1483) Effective January 1, 2019. Repealed as of January 1, 2028, pursuant to Section 9855.9.)