NAC: CHAPTER 690C - SERVICE CONTRACTS

[Rev. 6/21/2024 5:25:26 PM]

[NAC-690C Revised Date: 6-24]

CHAPTER 690C - SERVICE CONTRACTS

690C.045 “Normal wear and tear” interpreted.

690C.050 “Service contract” interpreted.

690C.100 Filing and approval of contract; fees.

690C.110 Information required in contract; status report; exclusion of preexisting conditions.

690C.120 Cancellation of contract; refund of purchase price and cancellation fee; transfer of contract and transfer fee.

NAC 690C.045 “Normal wear and tear” interpreted. (NRS 679B.130, 690C.080, 690C.300) As used in NRS 690C.080, the term “normal wear and tear” includes, without limitation, damage which necessitates the provision of the following services:

1. Repair or replacement of a tire or wheel on a motor vehicle damaged as a result of coming into contact with a road hazard;

2. Removal of a dent, ding or crease on a motor vehicle that is repairable using a process of paintless dent removal without affecting the existing paint finish or removing the body panels of the motor vehicle or sanding, bonding or painting the existing finish of the motor vehicle;

3. Repair of a chip or crack in the windshield or replacement of the windshield of a motor vehicle damaged as a result of a road hazard; and

4. Replacement of a key or key fob of a motor vehicle if the key or key fob becomes inoperable or is lost or stolen.

(Added to NAC by Comm’r of Insurance by R007-16, eff. 6-28-2016)

NAC 690C.050 “Service contract” interpreted. (NRS 679B.130, 690C.300) The Commissioner will interpret “service contract” as used in chapter 690C of NRS not to include:

1. A service contract issued by a motor club as defined in NRS 696A.070;

2. A contract of insurance for home protection as defined in NRS 690B.100; and

3. Contracts of insurance issued by insurers licensed pursuant to Title 57 of NRS.

(Added to NAC by Comm’r of Insurance by R195-99, eff. 1-27-2000)

NAC 690C.100 Filing and approval of contract; fees. (NRS 679B.130, 679B.136, 690C.300)

1. A provider shall not issue, sell or offer for sale a service contract in this State unless the service contract has been:

(a) Filed with the Commissioner in accordance with the System for Electronic Rate and Form Filing developed and implemented by the National Association of Insurance Commissioners or its successor organization; and

(b) Approved by the Commissioner.

2. A provider who files a service contract with the Commissioner for approval pursuant to subsection 1 must also file with the service contract:

(a) All documents that are part of the application for the service contract;

(b) All documents that are part of the service contract; and

3. The provider must pay the following fees by using the Electronic Funds Transfer function within the System for Electronic Rate and Form Filing:

(a) Twenty-five dollars for:

(1) The initial filing of all the forms that comprise a new service contract.

(2) The filing of a service contract that modifies a service contract which has been approved by the Commissioner pursuant to this section.

(b) Ten dollars for the filing of a rider or endorsement to a service contract that has been approved by the Commissioner pursuant to this section.

4. The Commissioner may approve or disapprove a service contract filed pursuant to this section within 60 days after the date on which the Commissioner determines that the provider has fully complied with the requirements of subsection 2. If the Commissioner does not approve or disapprove the service contract within the 60 days described in this subsection, the service contract shall be deemed to be approved by the Commissioner. Each service contract shall be deemed to be complete upon its filing with the Commissioner, unless the Commissioner, within 15 business days after the service contract is filed with him or her, determines that the proposal is incomplete because the proposal does not comply with subsection 2.

(Added to NAC by Comm’r of Insurance by R195-99, eff. 1-27-2000; A by R093-17, 2-27-2018)

NAC 690C.110 Information required in contract; status report; exclusion of preexisting conditions. (NRS 679B.130, 690C.300)

1. A service contract must clearly state the procedures for making a claim on the contract, including, without limitation:

(a) A toll-free telephone number for claim service.

(b) Procedures for obtaining prior approval of work if such approval is required by the contract.

(c) If the service contract relates to goods that are essential to the health and safety of the holder and the repair of such goods is covered under the terms and conditions of the service contract, procedures for obtaining emergency service on such goods outside of normal business hours, including, without limitation, a statement which provides that if the emergency involves the loss of heating or cooling, loss of plumbing or substantial loss of electrical service and the emergency renders a dwelling unfit for a person to live in because of defects that immediately endanger the health and safety of the occupants of the dwelling:

(1) Repairs will commence within 24 hours after the report of the claim and will be completed as soon as reasonably practicable thereafter; and

(2) If the provider determines that repairs cannot practicably be completed within 3 calendar days after the report of the claim, the provider will provide a status report to the holder and to the Commissioner as described in subsection 2.

(d) A statement that if the holder is not satisfied with the manner in which the provider is handling the claim on the contract, the holder may contact the Commissioner by use of the toll-free telephone number of the Division. The statement must include the current toll-free telephone number of the Division which can be obtained from the Internet website of the Division.

2. A status report must:

(a) Be provided to the holder by verifiable means not later than 3 calendar days after the report of the claim;

(b) Be provided to the Commissioner using the electronic means prescribed by the Commissioner not later than 3 calendar days after the report of the claim; and

(1) A list of the required repairs or services;

(2) The primary reason causing the required repairs or services to extend beyond the 3-day period set forth in subparagraph (2) of paragraph (c) of subsection 1, including, without limitation, the status of any parts required for the repairs or services;

(3) The current estimated time to complete the repairs or services; and

(4) Contact information for the holder and the Commissioner to make additional inquiries concerning any aspect of the claim and a commitment by the provider to respond to such inquiries not later than 1 business day after such an inquiry is made.

3. If any preexisting conditions are excluded from coverage, the service contract must state the basis upon which service may be denied for such preexisting conditions.

4. As used in this section, “verifiable means” includes, without limitation, communication given by:

(a) Facsimile transmission;

(b) Electronic mail;

(d) Any similar mode of communication that is appropriate given the course of dealing between the provider and the holder.

(Added to NAC by Comm’r of Insurance by R195-99, eff. 1-27-2000; A by R067-07, 4-17-2008; R064-18, 6-26-2018; R102-22, 12-29-2022)

NAC 690C.120 Cancellation of contract; refund of purchase price and cancellation fee; transfer of contract and transfer fee. (NRS 679B.130, 690C.300)

1. Except as otherwise provided in this subsection, if a provider cancels a service contract pursuant to NRS 690C.270, the provider shall refund to the holder the portion of the purchase price that is unearned by the provider. The provider may deduct any outstanding balance on the account of the holder from the amount of the purchase price that is unearned by the provider when calculating the amount of the refund. A provider who cancels a contract pursuant to NRS 690C.270 may not impose a cancellation fee.

2. Except as otherwise provided in this section, if a holder who is the original purchaser of a service contract submits to the provider a request in writing to cancel the service contract in accordance with the terms of the contract, the provider shall refund to the holder the portion of the purchase price that is unearned by the provider.

3. If a holder requests the cancellation of a service contract pursuant to subsection 2, the provider may impose a reasonable cancellation fee if such a fee is provided for in the terms of the service contract.

4. If the provider transfers a service contract at the request of the holder, the provider may impose a reasonable transfer fee if such a fee is provided for in the terms of the service contract.

5. When calculating the amount of a refund pursuant to subsection 2, the provider may deduct from the portion of the purchase price that is unearned by the provider:

(a) Any outstanding balance on the account of the holder; and

(b) Any cancellation fee imposed pursuant to this section.

6. Except as otherwise provided in this subsection, if the purchase price of a service contract is financed and the loan has not been paid in full by the holder, the provider may provide a refund to the holder pursuant to this section or NRS 690C.250 by sending the refund to the lender. The amount of refund that may be sent to the lender must not exceed the holder’s outstanding balance on the loan.

(Added to NAC by Comm’r of Insurance by R195-99, eff. 1-27-2000; A by R064-18, 6-26-2018)