§ 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.