New Hampshire-2024-SB515-Enrolled

SB 515 - VERSION ADOPTED BY BOTH BODIES

02/15/2024 0521s

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

02/15/2024 0521s 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, and any substantive changes to the terms and conditions thereof, for informational and auditing purposes only and shall be filed within 30 days after the contract form or other contract language is first offered to a consumer in this state. All contract forms and other contract language shall be submitted through the System for Electronic Rate and Form Filing (SERFF) that is supported by the National Association of Insurance Commissioners. 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 filing. Every consumer guaranty contract issued that is not filed in compliance with this section shall constitute a separate violation against the obligor under RSA 415-C:11.

4 Prohibited Acts and Terms. RSA 415-C:7 is repealed and reenacted to read as follows:

415-C:7 Prohibited Acts and Terms.

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", which for purposes of this section mean 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 include, but are not 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 consumer-specific direct marketing that does not include the name, address, and phone number of the seller and the name of the obligor as filed with the insurance department.

(e) Engage in any business practice that is designed to financially exploit senior citizens. For purposes of this section, "senior citizens" include any individual who is 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 section. 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 misrepresent to a contract holder the pertinent facts or contract provisions relating to coverages at issue.

(j) 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.

II. No obligor, its designee, or any other representative of an obligor, shall in connection with any benefits, advantages, conditions, terms, or services available under a consumer guaranty contract:

(a) Fail to acknowledge and act reasonably and promptly upon communications with respect to claims arising under a consumer guaranty contract;

(b) Fail to adopt and implement standards for the prompt and reasonable investigation of claims arising under consumer guaranty contracts;

(d) Adopt or make 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;

(e) Knowingly underestimate the value of any claim by an obligor.

(f) 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 shall be disclosed in the contract, regardless of the contract's duration.

III. An obligor shall not make, permit, or cause any practice that:

(a) Fails to perform the services promised under the contract in a timely, competent, or workmanlike manner; or

(b) Has the effect of creating or maintaining a fraud.

IV. No consumer guaranty contract issued, sold, or covering property located in this state shall provide that:

(a) The consumer is not a party to the contract;

(b) The obligor has no liability to the consumer;

(c) The consumer does not have the right to bring an action to enforce the terms of the contract or otherwise challenge the denial of a claim which the consumer believes is wrongful. Consumer guaranty contracts may include provisions requiring the parties to submit to alternative dispute resolution, including a provision requiring binding arbitration that would expressly limit the right of the consumer to bring an action in a court of law, if such provision complies with and does not impede the rights of the consumer as provided under RSA 542. All arbitration provisions shall state that they are subject to RSA 542; or

(d) Any civil action or alternative dispute resolution procedure brought in connection with the consumer guaranty contract shall be brought in the courts of a jurisdiction other than New Hampshire.

V. Nothing in this chapter shall be construed to impair or in any way affect any rule or law applicable to or governing consumer guaranty contracts.

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.