The bill amends the Iowa Code to establish comprehensive regulations for service companies that offer motor vehicle and residential service contracts. It introduces new definitions such as "communicating in a verifiable manner," "gross consideration," and "service contract holder," while clarifying that a motor vehicle is any self-propelled vehicle subject to registration. The bill mandates that service companies maintain a valid license throughout their contractual obligations and report any significant changes or administrative actions to the commissioner within specified timeframes. It also outlines a licensing process that includes a $500 application fee and annual renewal requirements, emphasizing that service contracts are not classified as insurance.

In addition to licensing requirements, the bill enhances consumer protection by requiring service contracts to clearly outline obligations, fees, and coverage details, and mandates timely responses to claims related to essential services. The commissioner is granted increased authority to investigate compliance and enforce regulations, including the ability to suspend or revoke licenses for violations such as false advertising. The bill also stipulates that service companies must provide written explanations for claim denials and maintain confidentiality during investigations, while allowing for the publication of certain information in the public interest. Overall, the legislation aims to improve consumer protection and ensure compliance within the service contract industry in Iowa.

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