ARIZONA HOUSE OF REPRESENTATIVES

Fifty-fourth Legislature

Second Regular Session

House: RA DP 7-0-0-0

HB 2403: service contracts; refunds; administrative expenses

Sponsor: Representative Grantham, LD 12

Caucus & COW

Overview

Modifies the cancellation terms of a service contract (Contract).

History

A service company may not offer or issue a Contract unless the service company had been issued a permit by the Director of the Department of Insurance (Director) (A.R.S. § 20-1095.01).

A Contract is a written contract or agreement to perform the service, repair, replacement or maintenance on: 1) A consumer product; 2) The structural components, appliances, electrical, plumbing, heating, cooling or air conditioning system of a residential property; 3) The tires or wheels on a motor vehicle damaged due to road hazards; and 4) Any other services or products approved by the Director (A.R.S. § 20-1095).

Provisions

1. Stipulates that, in the event of a Contract cancellation, the administrative expenses cannot exceed $75 or 10% of the purchase price of the Contract, whichever is less, and any administrative expenses assessed may not exceed the amount of the refund due to the Contract holder. (Sec. 1)

2. States that a Contract must disclose whether the contract covers or excludes preexisting conditions. (Sec. 1)

3. Makes technical changes. (Sec. 1)

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7. Initials JR Caucus & COW

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