The proposed bill amends the Iowa Code to enhance the regulation of service companies and their service contracts, introducing new definitions such as "communicating in a verifiable manner," "gross consideration," "service contract holder," and "substitute part." It establishes that service companies must maintain a valid license throughout their contractual obligations and report significant changes or legal actions to the commissioner within specified timeframes. The bill clarifies that service contracts are not classified as insurance and sets forth requirements for clear communication with consumers, including the provision of sample contracts prior to purchase and specific disclosures about coverage and cancellation policies.

Key amendments include a mandate for service companies to refund the full purchase price of a canceled service contract without claims, with an additional ten percent penalty for delays beyond thirty days, unless the service contract holder fails to provide necessary information. The bill also outlines the obligations of service contract holders, including maintenance duties, and requires service contracts to specify coverage exclusions and service call fees. Furthermore, it enhances the commissioner’s authority to suspend or revoke licenses for violations and establishes new requirements for service contract forms, including a filing fee and compliance deadlines. The provisions of this bill are set to take effect on January 1, 2027.

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