SB 515 - AS INTRODUCED
2024 SESSION
24-2857
05/10
SENATE BILL 515
AN ACT relative to consumer guarantee contracts.
SPONSORS: Sen. Lang, Dist 2; Sen. Pearl, Dist 17; Sen. Innis, Dist 7; Rep. Moffett, Merr. 4
COMMITTEE: Commerce
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ANALYSIS
This bill revises requirements for consumer guarantee contracts.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
24-2857
05/10
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Twenty Four
AN ACT relative to consumer guarantee contracts.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Subparagraph; Definition of Consumer Guaranty Contracts; Manufacturers' Service Contracts Added. Amend RSA 415-C:1, III(b) by inserting after subparagraph (8) the following new subparagraph:
(9) Manufacturer's service contracts on the manufacturer's products.
2 Obligor Registration. Amend RSA 415-C:3, II to read as follows:
II. An obligor's registration shall include the following:
(a) The obligor’s name, address, and phone number.
(b) A certified copy of the obligor's charter and bylaws.
[(b)] (c) A certificate giving a full statement, under oath of the obligor's president and secretary, that the fiscal requirements stated in this chapter are met.
[(c)] (d) Other information in relation to the obligor's condition as may be required by the commissioner, including, but not limited to, the name, address and phone number of all administrators and sellers which shall be updated at least yearly.
3 New Section; Contract Forms. Amend RSA 415-C by inserting after section 3 the following new section:
415-C:3-a Contract Forms. The obligor shall file all contract forms and other contract language covered by this chapter for informational and auditing purposes only and shall be filed within 30 days of the effective date. The commissioner may require the obligor to change forms and provisions if they do not comply with the requirements of law, are not in the public interest, are contrary to public policy, are inequitable, misleading, deceptive, or encourage misrepresentation of such contract. Filed forms and any supporting information that is not exempt from disclosure by law or rule shall be open to public inspection upon the effective of the contract. Every consumer guaranty contract issued that is not filed in compliance with this section shall constitute a separate violation under RSA 415-C:11.
4 Prohibited Acts and Terms. RSA 415-C:7, I is repealed and reenacted to read as follows:
I. No obligor, its designee, or any other representative of an obligor, including a seller or administrator, shall in connection with the sale, or offer to sell, or any advertisement or in connection with any benefits, advantages, conditions, terms, or services available under a consumer guaranty contract:
(a) Make, publish, print, distribute, issue, circulate, advertise, or place before the public, any statement or representation that is false or misleading.
(b) Mislead by permitting or causing the omission of a material statement that under the circumstances should have been made in order to make the statements that were made not misleading.
(c) Employ pressure tactics or any method of marketing having the effect of or tending to induce the purchase of insurance through force, fright, threat, whether explicit or implied, or undue pressure to purchase a consumer guaranty contract. Such tactics shall include, but not be limited to, fake checks, false final notices, false indications that a consumer has failed to activate something they already possess, and false notices of price increases.
(d) Engage in unbranded marketing, or the use any method of solicitation that does not include the name, address and phone number of the obligor and seller.
(e) Engaging in any business practice that is designed to financially exploit senior citizens which are citizens who are eligible for social security benefits.
(f) Require the purchase of a consumer guaranty contract or represent that the purchase is mandatory.
(g) Create or maintain a fraud.
(h) Use in its name the words insurance, casualty, guaranty, surety, mutual, or any other words descriptive of the insurance, casualty, guaranty or surety business; or a name deceptively similar to the name or description of any insurance or surety corporation, or any other obligor. This section shall not apply to a company that was using any of the prohibited language in its name prior to the effective date of this chapter. However, a company using the prohibited language in its name shall conspicuously disclose in its consumer guaranty contracts a statement substantially as follows: "This agreement is not an insurance contract."
(i) Knowingly misrepresenting to a contract holder the pertinent facts or contract provisions relating to coverages at issue.
(j) Failing to acknowledge and act reasonably and promptly upon communications with respect to claims arising under a consumer guaranty contract.
(k) Failing to adopt and implement standards for the prompt and reasonable investigation of claims arising under consumer guaranty contracts.
(l) Not attempting in good faith to effectuate prompt, fair and equitable settlements or compromises of claims.
(m) Adopting or making known to contract holders a policy of appealing from arbitration awards in favor of contract holders for the purpose of compelling them to accept settlements or compromises less than the amount awarded in arbitration.
(n) Knowingly underestimating the value of any claim by an obligor.
(o) Unfairly discriminate based solely on age, place or area of residence, race, color, creed, national origin, ancestry, marital or civil union status, lawful occupation including military service, sex, gender identity, sexual orientation, religion, or blindness or other disability.
(p) Fail to refund unearned contract fees with respect to any cancellation of a consumer guaranty contract with a duration of 12 months or more. Contract fees for contracts with a duration of 12 months or more are earned pro-rata over the length of the contract. Obligors shall not charge a cancellation administrative fee of more than 10 percent of the contract price or $75, whichever is less, for a contract of any duration. All cancellation administrative fees must be disclosed in the contract, regardless of the contract's duration.
5 Repeal. RSA 415-C:2, I, relative to exemption of manufacturers' service contracts, is repealed.
6 Effective Date. This act shall take effect January 1, 2025.