§ 4-114-101. Title

This chapter shall be known and may be cited as the “Service Contracts Act”.

§ 4-114-102. Scope and purpose

(a) The purpose of this chapter is to: (1) Create a legal framework within which service contracts are defined, may be sold, and are regulated in this state; (2) Add significant consumer protections; and (3) Eliminate unnecessary administration. (b) A service contract under § 4-114-103 is not insurance and is not subject to the Arkansas […]

§ 4-114-103. Definitions

As used in this chapter: (1) “Administrator” means the person who is responsible for the administration of a service contract; (2) “Consumer” means an individual who buys other than for purposes of resale any tangible personal property that is distributed in commerce and that is normally used for personal, family, or household purposes and not […]

§ 4-114-104. Requirements for doing business

(a) A provider may appoint an administrator or other designee to be responsible for all or part of the administration of service contracts and compliance with this chapter. (b) Service contracts shall not be issued, sold, or offered for sale in this state unless the provider or its designee has: (1) Provided a receipt or […]

§ 4-114-105. Required disclosures — Reimbursement insurance policy

(a) Reimbursement insurance policies insuring service contracts issued, sold, or offered for sale in this state shall state that the insurer that issued the reimbursement insurance policy shall: (1) Reimburse or pay on behalf of the provider any covered sums the provider is legally obligated to pay; or (2) In the event of the provider’s […]

§ 4-114-106. Required disclosure — Service contracts

(a) A service contract issued, sold, or offered for sale in this state shall: (1) Be written in clear, understandable language that is easy to read; and (2) Conspicuously disclose the applicable requirements of this section. (b) (1) A service contract insured under a reimbursement insurance policy under § 4-114-104(d)(1) shall contain the name and […]

§ 4-114-107. Prohibited acts

(a) (1) A provider shall not use a name: (A) With the words “insurance”, “casualty”, “surety”, “mutual”, or any other words descriptive of the insurance, casualty, or surety business; or (B) Deceptively similar to the name or description of any insurance or surety corporation or any other provider. (2) (A) This subsection shall not apply […]

§ 4-114-108. Recordkeeping requirements

(a) (1) A provider shall keep accurate accounts, books, and records concerning transactions regulated under this chapter. (2) A provider’s accounts, books, and records shall include: (A) A copy of each type of service contract issued; (B) The name and address of each service contract holder to the extent that the name and address have […]

§ 4-114-109. Cancellation of reimbursement insurance policy

(a) An insurer that issued a reimbursement insurance policy shall not terminate the policy until at least sixty (60) days’ notice of termination has been mailed or delivered to the Insurance Commissioner and in accordance with any other applicable law. (b) The termination of a reimbursement insurance policy shall not reduce the insurer’s responsibility for […]

§ 4-114-110. Obligation of reimbursement insurance policy insurers

(a) (1) A provider is considered to be the agent of the insurer that issued a reimbursement insurance policy for the purpose of obligating an insurer for the acts of its agents, including the collection of moneys not forwarded. (2) If a provider is acting as an administrator and enlists other providers, the provider acting […]

§ 4-114-111. Enforcement provisions

(a) The Insurance Commissioner may conduct investigations or examinations of providers, administrators, insurers, or other persons to enforce the provisions of this chapter and protect service contract holders in this state. (b) (1) The commissioner may take any action that is necessary or appropriate to enforce the provisions of this chapter and the commissioner’s rules […]

§ 4-114-112. Rules

The Insurance Commissioner may promulgate rules necessary to effectuate this chapter.