The proposed bill amends Iowa's Code to strengthen regulations for service companies involved in motor vehicle and residential service contracts. It introduces new definitions and requirements, including the obligation for service companies to maintain a valid license, report material changes, and disclose specific information to service contract holders. Key terms such as "service contract holder," "substitute part," and "support services" are defined to clarify the roles of involved parties. The bill outlines the licensing application process, including necessary documentation and fees, and establishes renewal procedures. It mandates that service contracts be clear and comprehensive, detailing terms, conditions, and cancellation procedures, while emphasizing timely communication with service contract holders.

Additionally, the bill enhances consumer protections by allowing service contract holders to cancel within thirty days for a full refund if no claims have been paid, and it imposes penalties for late refunds. It requires service contracts to clearly outline obligations, coverage details, and the complaint filing process, while also mandating that essential repairs begin within 48 hours. The bill prohibits misleading practices and requires service companies to provide written explanations for denied claims. It includes provisions for civil penalties for noncompliance and repeals an existing section related to cease and desist orders. Overall, the legislation aims to improve transparency, accountability, and consumer protection within the service contract industry in Iowa.

Statutes affected:
Introduced: 507B.4, 523C.1, 523C.2, 523C.3, 523C.9, 523C.5, 523C.13, 523C.23, 714.16, 523C.19