the words and terms defined in sections 3 to 9, inclusive, of this act have

the meanings ascribed to them in those sections.

administering a service contract that is issued, sold or offered for sale by

a provider.

resale, goods used primarily for personal, family or household purposes

and not for business or research purposes.

insurance that is issued to a provider to either:

issued or sold by the provider; or

contract, pay on behalf of the provider any money the provider has an

obligation to pay under the service contract.

movable at the time of purchase or a fixture, that is used primarily for

personal, family or household purposes.

1. Purchases a service contract; or

2. Is legally in possession of a service contract and is entitled to

enforce the rights of the original purchaser of the service contract.

pursuant to the terms of a service contract to repair, replace or perform

maintenance on, or to indemnify the holder for the costs of repairing,

replacing or performing maintenance on, goods.

provider, in exchange for separately stated consideration, is obligated for

a specified period to a holder to repair, replace or perform maintenance

on, or indemnify or reimburse the holder for the costs of repairing,

replacing or performing maintenance on, goods that are described in the

service contract and which have an operational or structural failure as a

result of a defect in materials, workmanship or normal wear and tear,

including, without limitation:

1. A contract that includes a provision for incidental payment of

indemnity under limited circumstances, including, without limitation,

towing, rental and emergency road service; and

2. A contract that provides for the repair, replacement or

maintenance of goods for damages that result from power surges or

accidental damage from handling.

(a) A warranty;

(b) A maintenance agreement;

(c) A service contract provided by a public utility on its transmission

device if the service contract is regulated by the public utilities

commission of Nevada;

(d) A service contract sold or offered for sale to a person who is not a

consumer;

(e) A service contract for goods if the purchase price of the goods is

less than $250; or

(f) A service contract issued, sold or offered for sale by a vehicle

dealer on vehicles sold by the dealer, if the dealer is licensed pursuant to

NRS 482.325 and the service contract obligates either the dealer or the

manufacturer of the vehicle, or an affiliate of the dealer or

manufacturer, to provide all services under the service contract.

2. The sale of a service contract pursuant to this chapter does not

constitute the business of insurance for the purposes of 18 U.S.C. §§

1033 and 1034.

3. As used in this section:

(a) "Maintenance agreement" means a contract for a limited period

that provides only for scheduled maintenance.

(b) "Warranty" means a warranty provided solely by a manufacturer,

importer or seller of goods for which the manufacturer, importer or

seller did not receive separate consideration and that:

(1) Is not negotiated or separated from the sale of the goods;

(2) Is incidental to the sale of the goods; and

(3) Guarantees to indemnify the consumer for defective parts,

mechanical or electrical failure, labor or other remedial measures

required to repair or replace the goods.

contracts in this state unless he has been issued a certificate of

registration pursuant to the provisions of this chapter.

service contracts in this state must submit to the commissioner:

(a) A registration application on a form prescribed by the

commissioner;

(b) Proof that he has complied with the requirements for security set

forth in section 13 of this act;

(c) A copy of each type of service contract he proposes to issue, sell or

offer for sale;

(d) The name, address and telephone number of each administrator

with whom the provider intends to contract; and

(e) A fee of $1,000.

2. In addition to the fee required by subsection 1, a provider must

pay a fee of $25 for each type of service contract he files with the

commissioner.

3. A certificate of registration is valid for 1 year after the date the

commissioner issues the certificate to the provider. A provider may renew

his certificate of registration if, before the certificate expires, he submits

to the commissioner an application on a form prescribed by the

commissioner and a fee of $500.

comply with one of the following:

1. Purchase a contractual liability insurance policy which insures the

obligations of each service contract the provider issues, sells or offers for

sale. The contractual liability insurance policy must be issued by an

insurer authorized to transact insurance in this state or pursuant to the

provisions of chapter 685A of NRS.

2. Maintain a reserve account and deposit with the commissioner

security as provided in this subsection. The reserve account must contain

at all times an amount of money equal to at least 40 percent of the gross

consideration received by the provider for any unexpired service

contracts, less any claims paid on those unexpired service contracts. The

commissioner may examine the reserve account at any time. The

provider shall also deposit with the commissioner security in an amount

that is equal to $25,000 or 5 percent of the gross consideration received

by the provider for any unexpired service contracts, less any claims paid

on the unexpired service contracts, whichever is greater. The security

must be:

(a) A surety bond issued by a surety company authorized to do

business in this state;

(b) Securities of the type eligible for deposit pursuant to NRS

682B.030;

(c) Cash;

(d) An irrevocable letter of credit issued by a financial institution

approved by the commissioner; or

(e) In any other form prescribed by the commissioner.

3. Maintain, or be a subsidiary of a parent company that maintains,

a net worth or stockholders’ equity of at least $100,000,000. Upon

request, a provider shall provide to the commissioner a copy of the most

recent Form 10-K report or Form 20-F report filed by the provider or

parent company of the provider with the Securities and Exchange

Commission within the previous year. If the provider or parent company

is not required to file those reports with the Securities and Exchange

Commission, the provider shall provide to the commissioner a copy of the

most recently audited financial statements of the provider or parent

company. If the net worth or stockholders’ equity of the parent company

of the provider is used to comply with the requirements of this subsection,

the parent company must guarantee to carry out the duties of the

provider under any service contract issued or sold by the provider.

to any business transacted pursuant to the provisions of this chapter.

marketing, issuance, sale, offering for sale, making, proposing to make

and administration of service contracts are not subject to the provisions

of Title 57 of NRS, except, when applicable, the provisions of:

(a) NRS 679B.020 to 679B.157, inclusive;

(b) NRS 679B.159 to 679B.300, inclusive;

(c) NRS 679B.310 to 679B.370, inclusive;

(d) NRS 685B.090 to 685B.190, inclusive;

(e) NRS 686A.010 to 686A.095, inclusive;

(f) NRS 686A.160 to 686A.187, inclusive; and

(g) NRS 686A.260, 686A.270, 686A.280, 686A.300 and 686A.310.

2. A provider, person who sells service contracts, administrator or

any other person is not required to obtain a certificate of authority from

the commissioner pursuant to chapter 680A of NRS to issue, sell, offer

for sale or administer service contracts.

the holder the purchase price of the service contract if the holder has not

made a claim under the service contract and the holder returns the

service contract to the provider:

(a) Within 20 days after the date the provider mails a copy of the

service contract to the holder;

(b) Within 10 days after the purchaser receives a copy of the service

contract if the provider furnishes the holder with the copy at the time the

contract is purchased; or

(c) Within a longer period specified in the service contract.

2. The right of a holder to return a service contract pursuant to this

section applies only to the original purchaser of the service contract.

3. A service contract must include a provision that clearly states the

right of a holder to return a service contract pursuant to this section.

4. The provider shall refund to the holder the purchase price of the

service contract within 45 days after a service contract is returned

pursuant to subsection 1. If the provider fails to refund the purchase

price within that time, the provider shall pay the holder a penalty of 10

percent of the purchase price for each 30-day period or portion thereof

that the refund and any accrued penalties remain unpaid.

state must provide that the issuer of the policy shall:

(a) Reimburse or pay on behalf of the provider any money the

provider has a duty to pay under a service contract; or

(b) Otherwise provide for the performance of the duties of the

provider under a service contract.

2. If a provider fails to perform his duties under a service contract

within 60 days after receiving notice from the holder that the goods

described in the contract are defective, the holder may apply to the issuer

of the contractual liability insurance policy for performance of the duties

of the provider under the service contract.

(a) Be written in language that is understandable and printed in a

typeface that is easy to read.

(b) Indicate that it is insured by a contractual liability insurance

policy if it is so insured, and include the name and address of the issuer

of the policy or that it is backed by the full faith and credit of the provider

if the service contract is not insured by a contractual liability insurance

policy.

(c) Include the amount of any deductible that the holder is required to

pay.

(1) The name and address of the administrator; and

(2) The name of the holder, if provided by the holder.

The names and addresses of such persons are not required to be

preprinted on the service contract and may be added to the service

contract at the time of the sale.

(e) Include the purchase price of the service contract. The purchase

price must be determined pursuant to a schedule of fees established by

the provider. The purchase price is not required to be preprinted on the

service contract and may be negotiated with the holder and added to the

service contract at the time of sale.

(f) Include a description of the goods covered by the service contract.

(g) Specify the duties of the provider and any limitations, exceptions

or exclusions.

(h) If the service contract covers a motor vehicle, indicate whether

replacement parts that are not made for or by the original manufacturer

of the motor vehicle may be used to comply with the terms of the service

contract.

(i) Include any restrictions on transferring or renewing the service

contract.

(j) Include the terms, restrictions or conditions for canceling the

service contract before it expires and the procedure for canceling the

service contract. The conditions for canceling the service contract must

include, without limitation, the provisions of section 19.5 of this act.

(k) Include the duties of the holder under the contract, including,

without limitation, the duty to protect against damage to the goods

covered by the service contract or to comply with any instructions

included in the owner’s manual for the goods.

(l) Indicate whether the service contract authorizes the holder to

recover consequential damages.

(m) Indicate whether any defect in the goods covered by the service

contract existing on the date the contract is purchased is not covered

under the service contract.

2. A provider shall not allow, make or cause to be made a false or

misleading statement in any of his service contracts or intentionally omit

a material statement that causes a service contract to be misleading. The

commissioner may require the provider to amend any service contract

that the commissioner determines is false or misleading.

evidence of, the purchase of a service contract.

2. The provider shall furnish a copy of the service contract to the

holder within a reasonable time after the contract is purchased.

70 days may be canceled by the provider before the expiration of the

agreed term or 1 year after the effective date of the service contract,

whichever occurs first, except on any of the following grounds:

(a) Failure by the holder to pay an amount when due;

(b) Conviction of the holder of a crime which results in an increase in

the service required under the service contract;

(c) Discovery of fraud or material misrepresentation by the holder in

obtaining the service contract, or in presenting a claim for service

thereunder;

(d) Discovery of:

(1) An act or omission by the holder; or

(2) A violation by the holder of any condition of the service

contract,

which occurred after the effective date of the service contract and which

substantially and materially increases the service required under the

service contract; or

(e) A material change in the nature or extent of the required service or

repair which occurs after the effective date of the service contract and

which causes the required service or repair to be substantially and

materially increased beyond that contemplated at the time that the service

contract was issued or sold.

2. No cancellation of a service contract may become effective until at

least 15 days after the notice of cancellation is mailed to the holder.

shall not include in the name of his business:

(a) The words "insurance," "casualty," "surety," "mutual" or any

other word or term that implies that he is engaged in the business of

transacting insurance or is a surety company; or

(b) A name that is deceptively similar to the name or description of an

insurer or surety company or the name of another provider.

2. A provider may include the word "guaranty" or a similar word in

the name of his business.

3. This section does not apply to a provider who, before January 1,

2000, includes in the name of his business a name that does not comply

with the provisions of subsection 1. Such a provider shall include in each

service contract he issues, sells or offers for sale a statement that the

service contract is not a contract of insurance.

a condition for the approval of a loan or the purchasing of goods.

governed by this chapter. The records of a provider must include:

(a) A copy of each type of service contract that the provider issues,

sells or offers for sale;

(b) The name and address of each holder who possesses a service

contract under which the provider has a duty to perform, to the extent

that the provider knows the name and address of each holder;

(c) A list that includes each location where the provider issues, sells or

offers for sale service contracts; and

(d) The date and a description of each claim made by a holder under a

service contract.

2. Except as otherwise provided in this subsection, a provider shall

retain all records relating to a service contract for at least 1 year after the

contract has expired. A provider who intends to discontinue doing

business in this state shall provide the commissioner with satisfactory

proof that he has discharged his duties to the holders in this state and

shall not destroy his records without the prior approval of the

commissioner.

3. The records required to be maintained pursuant to this section

may be stored on a computer disk or other storage device for a computer

from which the records can be readily printed.

commissioner may conduct examinations to enforce the provisions of

this chapter pursuant to the provisions of NRS 679B.230 to 679B.300,

inclusive, at such times as he deems necessary. The commissioner is not

required to comply with the requirement in NRS 679B.230 that insurers

be examined not less frequently than every 5 years in the enforcement of

this chapter.

available to the commissioner for inspection any accounts, books and

records concerning any service contract issued, sold or offered for sale by

the provider which are reasonably necessary to enable the commissioner

to determine whether the provider is in compliance with the provisions of

this chapter.

order or regulation of the commissioner issued or adopted pursuant

thereto may be assessed a civil penalty by the commissioner of not more

than $500 for each act or violation, not to exceed an aggregate amount

of $10,000 for violations of a similar nature. For the purposes of this

section, violations shall be deemed to be of a similar nature if the

violations consist of the same or similar conduct, regardless of the

number of times the conduct occurred.

necessary to carry out the provisions of this chapter.