The bill SB318 Engrossed amends several sections of the Code of Alabama 1975 concerning service contracts, introducing new exemptions for mobile telecommunications service providers and clarifying that contracts sold for tangible property priced at $250 or less are exempt from certain regulations. It also specifies that service contracts from Alabama electric cooperatives and their affiliates must comply only with select sections of the law. The bill includes technical revisions, such as replacing "shall" with "may" in definitions, adding new terms like "refund" and "repair," and clarifying that service contracts do not constitute insurance under the Alabama Insurance Code.

Additionally, the bill mandates that service contract providers must give a receipt and a copy of the contract to the holder after purchase, allows for the Service Contract Revolving Fund to be expended only with proper allotment and budgeting, and requires contracts to permit holders to return them for a full refund if no claims have been made. It enhances transparency by requiring clear disclosures in advertisements regarding refunds and limitations, and mandates that contracts be written in a minimum of eight-point type size. The bill also allows contract holders to claim directly against reimbursement insurance companies if providers fail to deliver services within 60 days after proof of loss. These changes aim to improve consumer protection and clarify the obligations of service contract providers, with the new regulations set to take effect on January 1, 2026.