2005 Minnesota Statutes

     59B.05 Required disclosure; service contracts. 

    Subdivision 1.    Readability and general disclosure.  
 Service contracts marketed, sold, offered for sale, issued, 
 made, proposed to be made, or administered in this state must be 
 written, printed, or typed in clear, understandable language 
 that is easy to read and must disclose the requirements set 
 forth in this section, as applicable. 

    Subd. 2.    Identities of parties.  Service contracts 
 must state the name and address of the provider, and must 
 identify any administrator if different from the provider, the 
 service contract seller, and the service contract holder to the 
 extent that the name of the service contract holder has been 
 furnished by the service contract holder.  The identities of the 
 parties are not required to be preprinted on the service 
 contract and may be added to the service contract at the time of 
 sale. 

    Subd. 3.    Total purchase price and sales terms.  
 Service contracts must state the total purchase price and the 
 terms under which the service contract is sold.  The purchase 
 price is not required to be preprinted on the service contract 
 and may be negotiated at the time of sale with the service 
 contract holder. 

    Subd. 4.    Deductibles.  Service contracts must state 
 the existence of any deductible amount, if applicable. 

    Subd. 5.    Coverages, limitations, and exclusions.  No 
 particular causes of loss or property are required to be 
 covered, but service contracts must specify the merchandise and 
 services to be provided and, with equal prominence, any 
 limitations, exceptions, or exclusions including, but not 
 limited to, any damage or breakdown not covered by the service 
 contract.  

    Subd. 6.    Restrictions on transferability.  Service 
 contracts must state any restrictions governing the 
 transferability of the service contract, if applicable. 

    Subd. 7.    Cancellation terms.  Service contracts must 
 state the terms, restrictions, or conditions governing 
 cancellation of the service contract prior to the termination or 
 expiration date of the service contract by either the provider 
 or the service contract holder.  The provider of the service 
 contract shall mail a written notice to the contract holder at 
 the last known address of the service contract holder contained 
 in the records of the provider at least 15 days before 
 cancellation by the provider.  Five days' notice is required if 
 the reason for cancellation is nonpayment of the provider fee, a 
 material misrepresentation by the service contract holder to the 
 provider, or a substantial breach of duties by the service 
 contract holder relating to the covered product or its use.  The 
 notice must state the effective date of the cancellation and the 
 reason for the cancellation. 

    Subd. 8.    Duties of contract holder.  Service 
 contracts must set forth all of the obligations and duties of 
 the service contract holder, such as the duty to protect against 
 any further damage and any requirement to follow the owner's 
 manual. 

    Subd. 9.    Exclusions; consequential damages and 
 preexisting conditions.  Service contracts may exclude 
 coverage for consequential damages or preexisting conditions.  
 These exclusions, if applicable, must be stated in the contract. 

    HIST: 1Sp2005 c 1 art 5 s 5