MCA Chapter 65

MCA Chapter 65
in effect

Miss. Code Ann. § 83-65-101 Purpose.

The sole purpose of this chapter is to provide for the regulation of vehicle service contracts. This chapter does not apply to motor vehicle manufacturers’ warranties.

Miss. Code Ann. § 83-65-103 Definitions.

For the purposes of this chapter: “Commissioner” means the Commissioner of Insurance. “Service contract holder” means a person who purchases or otherwise obtains a vehicle service contract. “Vehicle service contract” means a contract or agreement that undertakes to perform or provide repair or replacement service, or provide payment for that service, for the operational or structural failure of a motor vehicle due to a defect in materials, workmanship or normal wear and tear, with or without additional provision for incidental payment or indemnity under limited circumstances, including, but not limited to, towing, rental and emergency road service. “Vehicle service contract” also means a contract or agreement that undertakes to perform or provide one or more of the following services: The repair or replacement of tires and/or wheels on a motor vehicle damaged as a result of coming into contact with road hazards; The removal of dents, dings or creases on a motor vehicle that can be repaired using the process of paintless dent removal without affecting the existing paint finish and without replacing vehicle body panels, sanding, bonding or painting; The repair of chips or cracks in or the replacement of motor vehicle windshields as a result of damage caused by road hazards; The replacement of a motor vehicle key or key-fob in the event that the key or key-fob becomes inoperable or is lost or stolen; Other services which may be approved by the Commissioner, if not inconsistent with other provisions of this chapter. “Provider” means a person who issues, makes or provides a vehicle service contract. “Reimbursement insurance policy” means a policy of insurance providing reimbursement coverage for all services which the provider is legally obligated to provide under the terms of vehicle service contracts issued or sold by the provider. “Services” means the repair, replacement or maintenance of property or indemnification for repair, replacement or maintenance for the operational or structural failure of a motor vehicle due to a defect in materials, workmanship or normal wear and tear. “Road hazard” means a hazard that is encountered while driving a motor vehicle and which may include, but not be limited to, potholes, rocks, wood debris, metal parts, glass, plastic, curbs or composite scraps.

Miss. Code Ann. § 83-65-105 Issuance, sale, or offer for sale of service contract; authorized providers.

A vehicle service contract shall not be issued, sold, or offered for sale in this state unless the provider of the vehicle service contract is a named insured under a reimbursement insurance policy issued by an insurer authorized to do business in this state.

Miss. Code Ann. § 83-65-107 Issuance, sale, or offer for sale of service contract; document filing requirements; rates.

A vehicle service contract shall not be issued, sold, or offered for sale in this state unless a true and correct copy of the vehicle service contract and the provider’s reimbursement insurance policy and the rates to be charged for the reimbursement insurance policy have been filed by the insurer issuing the reimbursement insurance policy with the commissioner. Rates shall not be excessive, inadequate or unfairly discriminatory.

Miss. Code Ann. § 83-65-109 Issuance, sale, or offer for sale of reimbursement insurance policy.

A reimbursement insurance policy shall not be issued, sold, or offered for sale in this state unless the reimbursement insurance policy conspicuously states that the issuer of the policy shall provide on behalf of the provider all services which the provider is legally obligated to provide according to the provider’s contractual obligations under the vehicle service contracts issued or sold by the provider.

Miss. Code Ann. § 83-65-111 Issuance, sale, or offer for sale of service contract; form and terms of contract.

A vehicle service contract shall not be issued, sold, or offered for sale in this state unless the contract conspicuously states that the obligations of the provider to the service contract holder to provide services are guaranteed under a reimbursement insurance policy, and unless the contract conspicuously states the name and address of the issuer of the reimbursement policy. Every vehicle service contract shall be written in clear, understandable language and shall be printed or typed in easy-to-read type, size and style, and shall not be issued, sold, or offered for sale in this state unless the contract: Conspicuously states that the services for which the provider is legally obligated to perform to the service contract holder are guaranteed under a reimbursement insurance policy; Conspicuously states the name and address of the issuer of the reimbursement insurance policy; Identifies the provider, the seller, and the service contract holder; Sets forth the total purchase price and the terms under which it is to be paid; Sets forth the procedure for making a claim, including a toll-free telephone number for claim service and a procedure for obtaining reimbursement for emergency repairs performed outside of normal business hours; Conspicuously states the existence of a deductible amount, if any; Specifies the merchandise or services, or both, to be provided and any limitations, exceptions or exclusions; Sets forth the conditions on which the use of non-original manufacturers parts, or substitute service, will be allowed; Conspicuously sets forth all of the obligations and duties of the service contract holder, such as the duty to protect against any further damage to the vehicle and the requirement for certain service and maintenance; Sets forth any terms, restrictions, or conditions governing transferability of the vehicle service contract.

Miss. Code Ann. § 83-65-113 Use of particular words in names of providers, contracts or literature; false or misleading statements or omissions, etc., by providers; requirement of purchase of vehicle service contract as condition of loan or sale.

Unless licensed as an insurance company, a provider shall not use in its name, contracts, or literature, any of the words “insurance,” “casualty,” “surety,” “mutual,” or any other words descriptive of the insurance, casualty, or surety business or deceptively similar to the name or description of any insurance or surety corporation, or any other vehicle service contract provider. A provider shall not, without the written consent of the purchaser, knowingly charge a purchaser for duplication of coverage or duties required by state or federal law, a warranty expressly issued by a manufacturer or seller of a product or any implied warranty enforceable against the lessor, seller, or manufacturer of a product. A provider shall not make, permit, or cause any false or misleading statements, either oral or written, in connection with the sale, offer to sell, or advertisement of a vehicle service contract. A provider shall not permit or cause the omission of any material statement in connection with the sale, offer to sell, or advertisement of a vehicle service contract, which under the circumstances should have been made in order to make the statements that were made not misleading. A provider shall not make, permit, or cause any false or misleading statements, either oral or written, about the benefits or services available under the vehicle service contract. A provider shall not make, permit, or cause any statement or practice which has the effect of creating or maintaining a fraud. A provider is prohibited from making, publishing, disseminating, circulating, or placing before the public, or causing, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public in a newspaper, magazine or other publication, or in the form of a notice, circular, pamphlet, letter or poster, or over any radio or television station or in any other way, an advertisement, announcement, or statement containing any assertion, representation, or statement with respect to the vehicle service contract industry or with respect to any provider which is untrue, deceptive, or misleading. A person such as a bank, savings and loan association, insurance company, lending institution, manufacturer or seller of any product, shall not require the purchase of a vehicle service contract as a condition of a loan or a sale. A provider is prohibited from making, publishing, disseminating, or circulating, directly or indirectly, or aiding, abetting, or encouraging the making, publishing, disseminating, or circulating of any oral or written statement or any pamphlet, circular, article, or literature which is false, or maliciously critical of or derogatory to the financial condition of any person, and which is calculated to injure such person. A provider is prohibited from entering into any agreement to commit, or by any concerted action committing, any act of boycott, coercion or intimidation resulting in or tending to result in unreasonable restraint of, or monopoly in, the service contract industry. A provider is prohibited from knowingly filing with any supervisory or other public official, or knowingly making, publishing, disseminating, circulating, or delivering to any person, or placing before the public, or knowingly causing directly or indirectly, to be made, published, disseminated, circulated, delivered to any person, or placed before the public, any false material statement of fact as to the financial condition of a person. A provider is prohibited from knowingly making any false entry of a material fact in any book, report, or statement of any person or knowingly omitting to make a true entry of any material fact pertaining to the business of such person in any book, report or statement of such person.

Miss. Code Ann. § 83-65-115 Recordkeeping requirements.

All providers shall keep accurate accounts, books, and records concerning transactions regulated under this chapter. A provider’s accounts, books, and records shall include: Copies of all service contracts; The name and address of each service contract holder to the extent that the name and address have been furnished by the service contract holder; The dates, amounts, and descriptions of all receipts, claims, and expenditures. A provider shall retain all required accounts, books, and records pertaining to each service contract holder for at least two (2) years after the specified period of coverage has expired. A provider discontinuing business in this state shall maintain its records until it furnishes the commissioner satisfactory proof that it has discharged all obligations to contract holders in this state. Providers shall make all accounts, books, and records concerning transactions regulated under this chapter available to the commissioner for the purpose of examination.

Miss. Code Ann. § 83-65-117 Cancellation of reimbursement insurance policy.

The issuer of a reimbursement insurance policy shall not cancel such reimbursement insurance policy unless sixty (60) days written notice of cancellation has been given to the commissioner and to each insured provider, including automobile dealers and third-party administrators. The cancellation of a reimbursement insurance policy shall not reduce the issuer’s responsibility for vehicle service contracts issued by providers prior to the date of cancellation.

Miss. Code Ann. § 83-65-119 Complaint against providers.

The commissioner may receive and process each complaint made against any provider which alleges certain acts or practices which may constitute one or more violations of this chapter. Any member of the public, or any federal, state, or local official, may file a complaint with the commissioner. Complaints may be received from sources outside the State of Mississippi and processed in the same manner as those originating in Mississippi. All complaints shall be made in writing and shall fully identify the complainant by name and address. If required by the commissioner, complaints shall be made on forms prescribed and provided by the commissioner. Oral or telephone communications may not be considered or processed as complaints. However, any member of the staff of the commissioner may file a complaint based upon information and belief, in reliance upon oral, telephone, or written communications received by the commissioner.

Miss. Code Ann. § 83-65-123 Application of chapter.

If any provision of this chapter or the application thereof to any person or circumstance is held invalid by a court of competent jurisdiction, the remainder of the chapter or the applicability of such provision to other persons or circumstances shall not be affected.

Miss. Code Ann. § 83-65-125 Provider not required to be named insured under reimbursement insurance policy under certain circumstances.

A provider shall not be required to be a named insured under a reimbursement insurance policy for purposes of issuing, selling or offering for sale a vehicle service contract in this state if the provider complies with the following requirements: Maintains, or has a parent company maintain, a net worth or stockholders’ equity of at least One Hundred Million Dollars ($100,000,000.00); Upon request, files with the commissioner a true and correct copy of the vehicle service contract; Upon request, files with the commissioner a copy of the provider’s or the provider’s parent company’s most recent Form 10-K or Form 20-F filed with the Securities and Exchange Commission within the preceding calendar year. If the provider or the provider’s parent company does not file with the Securities and Exchange Commission, the provider, upon request, shall file with the commissioner a copy of the provider’s or the provider’s parent company’s audited financial statements showing a net worth of the provider or its parent company of at least One Hundred Million Dollars ($100,000,000.00). If the provider’s parent company’s Form 10-K, Form 20-F or audited financial statements are filed to show that the provider meets the financial requirements of this section, the parent company shall agree to guarantee the obligations of the provider relating to service contracts sold by the provider in this state. If a provider complies with the requirements of subsection (1) the provider may issue, sell or offer for sale in this state vehicle service contracts and such contracts shall not be subject to the requirements of Sections 83-65-105, 83-65-107, 83-65-109 and subsections (2)(a) and (b) of Section 83-65-111.