A.B. 370
- *AB370*
ASSEMBLY BILL NO. 370–COMMITTEE
ON COMMERCE AND LABOR
(ON BEHALF OF THE JOINT INTERIM STANDING
COMMITTEE ON COMMERCE AND LABOR)
MARCH 6, 2025
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Referred to Committee on Commerce and Labor
SUMMARY—Revises provisions relating to service contracts.
(BDR 57-517)
FISCAL NOTE: Effect on Local Government: No.
Effect on the State: Yes.
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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.
AN ACT relating to service contracts; requiring the Division of
Insurance of the Department of Business and Industry to
establish a toll-free telephone number for receiving
certain complaints concerning providers of service
contracts; requiring the Commissioner of Insurance to
establish a system for rating providers of service contracts
based on certain criteria; requiring certain information to
be included in a service contract; and providing other
matters properly relating thereto.
Legislative Counsel’s Digest:
Existing law provides for the registration and regulation of providers of service 1
contracts by the Commissioner of Insurance. (Chapter 690C of NRS) Existing law 2
and regulations require certain information to be included in a service contract. 3
(NRS 690C.260; NAC 690C.110) Existing regulations require a service contract to 4
include, among other things, a statement that if the holder of the service contract is 5
not satisfied with the manner in which the provider is handling a claim on the 6
contract, the holder may contact the Commissioner at the toll-free telephone 7
number of the Division of Insurance of the Department of Business and Industry. 8
(NAC 690C.110) Sections 2 and 4 of this bill incorporate similar requirements into 9
statute. Section 2 requires the Division to establish and post on the Internet website 10
of the Division a toll-free telephone number for receiving complaints concerning 11
the manner in which a provider is handling a claim on a service contract. Section 4 12
requires a service contract to include a statement setting forth that toll-free 13
telephone number and indicating that the holder of the service contract may contact 14
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the Division at that telephone number if the holder is not satisfied with the manner 15
in which the provider is handling a claim on the contract. 16
Section 3 of this bill requires the Commissioner to adopt regulations 17
establishing a system for rating each provider doing business in this State on the 18
compliance by the provider with the provisions of existing law and regulations 19
governing service contracts and the number of complaints received by the Division 20
concerning the provider. Section 3 sets forth certain requirements for these 21
regulations, including the requirement that the rating system must provide for the 22
assignment of a star rating of not more than five stars and not less than one star to 23
each provider, and that the Division is required to post the most recent star rating 24
assigned to each provider on the Internet website of the Division. 25
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
Section 1. Chapter 690C of NRS is hereby amended by adding 1
thereto the provisions set forth as sections 2 and 3 of this act. 2
Sec. 2. The Division shall establish a toll-free telephone 3
number for receiving complaints from consumers concerning the 4
manner in which a provider is handling a claim on a service 5
contract. The Division shall post the toll-free telephone number on 6
the Internet website of the Division. 7
Sec. 3. 1. The Commissioner shall adopt regulations 8
establishing a system for rating each provider doing business in 9
this State on the compliance by the provider with the provisions of 10
this chapter and the regulations adopted pursuant thereto and the 11
number of complaints received by the Division concerning the 12
provider. The regulations must: 13
(a) Require the rating system to provide for the assignment of 14
a star rating of not more than five stars and not less than one star 15
to each provider. 16
(b) Set forth the methods and procedures by which the 17
Commissioner will evaluate the compliance of the provider with 18
the provisions of this chapter and the regulations adopted 19
pursuant thereto and the number of complaints received by the 20
Division concerning the provider for the purpose of assigning a 21
star rating to the provider. 22
(c) Provide for a new evaluation to be conducted of and a new 23
star rating to be assigned to each provider periodically in 24
accordance with a schedule prescribed by the Commissioner. 25
(d) Set forth procedures by which a provider may appeal a star 26
rating assigned to the provider. 27
2. The Division shall post on the Internet website of the 28
Division the most recent star rating assigned to each provider 29
doing business in this State pursuant to the regulations adopted 30
pursuant to subsection 1. 31
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Sec. 4. NRS 690C.260 is hereby amended to read as follows: 1
690C.260 1. A service contract must: 2
(a) Be written in language that is understandable and printed in a 3
typeface that is easy to read. 4
(b) Indicate that it is insured by a contractual liability insurance 5
policy if it is so insured, and include the name and address of the 6
issuer of the policy or that it is backed by the full faith and credit of 7
the provider if the service contract is not insured by a contractual 8
liability insurance policy. 9
(c) Include the amount of any deductible that the holder is 10
required to pay. 11
(d) Include the name and address of the provider and, if 12
applicable: 13
(1) The name and address of the administrator; and 14
(2) The name of the holder, if provided by the holder. 15
The names and addresses of such persons are not required to be 16
preprinted on the service contract and may be added to the service 17
contract at the time of the sale. 18
(e) Include the purchase price of the service contract. The 19
purchase price must be determined pursuant to a schedule of fees 20
established by the provider. The purchase price is not required to be 21
preprinted on the service contract and may be negotiated with the 22
holder and added to the service contract at the time of sale. 23
(f) Include a description of the goods covered by the service 24
contract. 25
(g) Specify the duties of the provider and any limitations, 26
exceptions or exclusions. 27
(h) If the service contract covers a motor vehicle, indicate 28
whether replacement parts that are not made for or by the original 29
manufacturer of the motor vehicle may be used to comply with the 30
terms of the service contract. 31
(i) Include any restrictions on transferring or renewing the 32
service contract. 33
(j) Include the terms, restrictions or conditions for cancelling the 34
service contract before it expires and the procedure for cancelling 35
the service contract. The conditions for cancelling the service 36
contract must include, without limitation, the provisions of 37
NRS 690C.270. 38
(k) Include the duties of the holder under the contract, including, 39
without limitation, the duty to protect against damage to the goods 40
covered by the service contract or to comply with any instructions 41
included in the owner’s manual for the goods. 42
(l) Indicate whether the service contract authorizes the holder to 43
recover consequential damages. 44
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(m) Indicate whether any defect in the goods covered by the 1
service contract existing on the date the contract is purchased is not 2
covered under the service contract. 3
(n) Include a statement, written in plain language and in a 4
font size that is not smaller than the font size used for the majority 5
of the text in the service contract, indicating that if the holder is 6
not satisfied with the manner in which the provider handles a 7
claim on the contract, the holder may contact the Commissioner 8
by use of the toll-free telephone number of the Division 9
established pursuant to section 2 of this act. The statement must 10
include the current toll-free telephone number established 11
pursuant to section 2 of this act that is posted on the Internet 12
website of the Division. 13
2. A provider shall not allow, make or cause to be made a false 14
or misleading statement in any of the service contracts of the 15
provider or intentionally omit a material statement that causes a 16
service contract to be misleading. The Commissioner may require 17
the provider to amend any service contract that the Commissioner 18
determines is false or misleading. 19
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