A reimbursement insurance policy insuring a service contract or a vehicle protection product warranty that is issued, sold, or offered for sale in this state shall conspicuously state that, upon failure of the service contract provider or warrantor to perform under the contract, the issuer of the policy shall:
Terms Used In Utah Code 31A-6a-104
Application: means a document:
(a)
(i)
completed by an applicant to provide information about the risk to be insured; and
(ii)
that contains information that is used by the insurer to evaluate risk and decide whether to:
(A)
insure the risk under:
(I)
the coverage as originally offered; or
(II)
a modification of the coverage as originally offered; or
(B)
decline to insure the risk; or
(b)
used by the insurer to gather information from the applicant before issuance of an annuity contract. See Utah Code 31A-1-301
Complaint: A written statement by the plaintiff stating the wrongs allegedly committed by the defendant.
Contract: A legal written agreement that becomes binding when signed.
contract holder: means a person who purchases a service contract. See Utah Code 31A-6a-101
Exclusion: means for the purposes of accident and health insurance that an insurer does not provide insurance coverage, for whatever reason, for one of the following:
(a)
a specific physical condition;
(b)
a specific medical procedure;
(c)
a specific disease or disorder; or
(d)
a specific prescription drug or class of prescription drugs. See Utah Code 31A-1-301
Filed: means that a filing is:
(i)
submitted to the department as required by and in accordance with applicable statute, rule, or filing order;
(ii)
received by the department within the time period provided in applicable statute, rule, or filing order; and
(iii)
accompanied by the appropriate fee in accordance with:
Home warranty service contract: means a service contract that requires a person to repair or replace a component, system, or appliance of a home or make indemnification to the contract holder for the repair or replacement of a component, system, or appliance of the home:
(a)
upon mechanical or operational failure of the component, system, or appliance;
(b)
for a predetermined fee; and
(c)
if:
(i)
the person is not the builder, seller, or lessor of the home that is the subject of the contract; and
(ii)
the failure described in Subsection (1)(a) occurs within a specified period of time. See Utah Code 31A-6a-101
Insurance: includes :
(i)
a risk distributing arrangement providing for compensation or replacement for damages or loss through the provision of a service or a benefit in kind;
(ii)
a contract of guaranty or suretyship entered into by the guarantor or surety as a business and not as merely incidental to a business transaction; and
(iii)
a plan in which the risk does not rest upon the person who makes an arrangement, but with a class of persons who have agreed to share the risk. See Utah Code 31A-1-301
insurance company: means a person doing an insurance business as a principal including:
(i)
a fraternal benefit society;
(ii)
an issuer of a gift annuity other than an annuity specified in Subsections 31A-22-1305(2) and (3);
(iii)
a motor club;
(iv)
an employee welfare plan;
(v)
a person purporting or intending to do an insurance business as a principal on that person's own account; and
Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
reimbursement insurance policy: means a policy of insurance providing coverage for all obligations and liabilities incurred by the service contract provider or warrantor under the terms of the service contract or vehicle protection product warranty issued by the provider or warrantor. See Utah Code 31A-6a-101
Service contract: includes any contract or agreement to perform or reimburse the service contract holder for any one or more of the following services:
(i)
the repair or replacement of tires, wheels, or both on a motor vehicle damaged as a result of coming into contact with a road hazard;
(ii)
the removal of dents, dings, or creases on a motor vehicle that can be repaired using the process of paintless dent removal without affecting the existing paint finish and without replacing vehicle body panels, sanding, bonding, or painting;
(iii)
the repair of chips or cracks in or the replacement of a motor vehicle windshield as a result of damage caused by a road hazard, that is primary to the coverage offered by the motor vehicle owner's motor vehicle insurance policy; or
(iv)
the replacement of a motor vehicle key or key-fob if the key or key-fob becomes inoperable, lost, or stolen, except that the replacement of lost or stolen property is limited to only the replacement of a lost or stolen motor vehicle key or key-fob. See Utah Code 31A-6a-101
Service contract provider: means a person who issues, makes, provides, administers, sells or offers to sell a service contract, or who is contractually obligated to provide service under a service contract. See Utah Code 31A-6a-101
State: when applied to the different parts of the United States, includes a state, district, or territory of the United States. See Utah Code 68-3-12.5
Vehicle protection product warranty: means a written agreement by a warrantor that provides that if the vehicle protection product fails to prevent the theft of the motor vehicle, or aid in the recovery of the motor vehicle within a time period specified in the warranty, not exceeding 30 days after the day on which the motor vehicle is reported stolen, the warrantor will reimburse the warranty holder for incidental costs specified in the warranty, not exceeding $5,000, or in a specified fixed amount not exceeding $5,000. See Utah Code 31A-6a-101
Vehicle service contract: means a service contract for the repair or maintenance of a vehicle:
(a)
for operational or structural failure because of a defect in materials, workmanship, normal wear and tear, or accidental damage from handling; and
(b)
with or without additional provision for incidental payment of indemnity under limited circumstances, including towing, providing a rental car, or providing emergency road service. See Utah Code 31A-6a-101
Warrantor: means a person who is contractually obligated to the warranty holder under the terms of a vehicle protection product warranty. See Utah Code 31A-6a-101
Warranty holder: means the person who purchases a vehicle protection product, any authorized transferee or assignee of the purchaser, or any other person legally assuming the purchaser's rights under the vehicle protection product warranty. See Utah Code 31A-6a-101
(a)
pay on behalf of the service contract provider or warrantor any sums the service contract provider or warrantor is legally obligated to pay according to the service contract provider’s or warrantor’s contractual obligations under the service contract or a vehicle protection product warranty issued or sold by the service contract provider or warrantor; or
(b)
provide the service which the service contract provider is legally obligated to perform, according to the service contract provider’s contractual obligations under the service contract issued or sold by the service contract provider.
(2)
(a)
A service contract may not be issued, sold, or offered for sale in this state unless the service contract contains the following statements in substantially the following form:
(i)
“Obligations of the provider under this service contract are guaranteed under a service contract reimbursement insurance policy. Should the provider fail to pay or provide service on any claim within 60 days after proof of loss has been filed, the contract holder is entitled to make a claim directly against the Insurance Company.”;
(ii)
“This service contract or warranty is subject to limited regulation by the Utah Insurance Department. To file a complaint, contact the Utah Insurance Department.”; and
(iii)
A service contract or reimbursement insurance policy may not be issued, sold, or offered for sale in this state unless the contract contains a statement in substantially the following form, “Coverage afforded under this contract is not guaranteed by the Property and Casualty Guaranty Association.”
(b)
A vehicle protection product warranty may not be issued, sold, or offered for sale in this state unless the vehicle protection product warranty contains the following statements in substantially the following form:
(i)
“Obligations of the warrantor under this vehicle protection product warranty are guaranteed under a reimbursement insurance policy. Should the warrantor fail to pay on any claim within 60 days after proof of loss has been filed, the warranty holder is entitled to make a claim directly against the Insurance Company.”;
(ii)
“This vehicle protection product warranty is subject to limited regulation by the Utah Insurance Department. To file a complaint, contact the Utah Insurance Department.”; and
(iii)
as applicable:
(A)
“The warrantor under this vehicle protection product warranty will reimburse the warranty holder as specified in the warranty upon the theft of the vehicle.”; or
(B)
“The warrantor under this vehicle protection product warranty will reimburse the warranty holder as specified in the warranty and at the end of the time period specified in the warranty if, following the theft of the vehicle, the stolen vehicle is not recovered within a time period specified in the warranty, not to exceed 30 days after the day on which the vehicle is reported stolen.”
(c)
A vehicle protection product warranty, or reimbursement insurance policy, may not be issued, sold, or offered for sale in this state unless the warranty contains a statement in substantially the following form, “Coverage afforded under this warranty is not guaranteed by the Property and Casualty Guaranty Association.”
(3)
(a)
A service contract and a vehicle protection product warranty shall:
(i)
conspicuously state the name, address, and a toll free claims service telephone number of the reimbursement insurer;
(ii)
(A)
identify the service contract provider, the seller, and the service contract holder; or
(B)
identify the warrantor, the seller, and the warranty holder;
(iii)
conspicuously state the total purchase price and the terms under which the service contract or warranty is to be paid;
(iv)
conspicuously state the existence of any deductible amount or service fee;
(v)
specify the merchandise, service to be provided, and any limitation, exception, or exclusion;
(vi)
state a term, restriction, or condition governing the transferability of the service contract or warranty; and
(vii)
state a term, restriction, or condition that governs cancellation of the service contract as provided in Sections 31A-21-303 through 31A-21-305 by either the contract holder or service contract provider.
(b)
Beginning January 1, 2021, a service contract shall contain a conspicuous statement in substantially the following form: “Purchase of this product is optional and is not required in order to finance, lease, or purchase a motor vehicle.”
(4)
If prior approval of repair work is required under a home protection service contract or a vehicle service contract, the contract shall conspicuously state the procedure for obtaining prior approval and for making a claim, including:
(a)
a toll free telephone number for claim service; and
(b)
a procedure for obtaining reimbursement for emergency repairs performed outside of normal business hours.
(5)
A preexisting condition clause in a service contract shall specifically state which preexisting condition is excluded from coverage.
(6)
(a)
Except as provided in Subsection (6)(c), a service contract shall state the conditions upon which the use of a nonmanufacturers’ part is allowed.
(b)
A condition described in Subsection (6)(a) shall comply with applicable state and federal laws.
(c)
This Subsection (6) does not apply to:
(i)
a home warranty service contract; or
(ii)
a service contract that does not impose an obligation to provide parts.
(7)
This section applies to a vehicle protection product warranty, except for the requirements of Subsections (3)(a)(iv) and (vii), (4), (5), and (6). The department may make rules in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, to implement the application of this section to a vehicle protection product warranty.
(8)
(a)
As used in this Subsection (8), “conspicuous statement” means a disclosure that:
(i)
appears in all-caps, bold, and 14-point font; and
(ii)
provides a space to be initialed by the consumer:
(A)
immediately below the printed disclosure; and
(B)
at or before the time the consumer purchases the vehicle protection product.
(b)
A vehicle protection product warranty shall contain a conspicuous statement in substantially the following form: “Purchase of this product is optional and is not required in order to finance, lease, or purchase a motor vehicle.”
(9)
If a vehicle protection product warranty states that the warrantor will reimburse the warranty holder for incidental costs, the vehicle protection product warranty shall state how incidental costs paid under the warranty are calculated.
(10)
If a vehicle protection product warranty states that the warrantor will reimburse the warranty holder in a fixed amount, the vehicle protection product warranty shall state the fixed amount.
