§7003.__Requirements for doing business

1. Administrator.__A provider may, but is not required to, appoint an administrator or other designee to be responsible for any or all of the administration of service contracts and compliance with this chapter.

2. Service contract.__A service contract may not be issued, sold or offered for sale in this State unless the provider has:

A.__Provided a receipt for, or other written evidence of, the purchase of the service contract to the contract holder; and

B.__Provided a copy of the service contract to the service contract holder within a reasonable period of time from the date of purchase.

3. Registration.__A provider of service contracts sold in this State shall file a registration with the superintendent on a form prescribed by the superintendent.__A provider shall pay to the superintendent a fee in the amount of $500 annually.

4. Performance.__In order to ensure the faithful performance of a provider's obligations to its service contract holders, each provider shall:

A. Insure all service contracts under a reimbursement insurance policy issued by an insurer authorized to transact insurance in this State or issued pursuant to chapter 19;

B. Undertake to:

(1)__Maintain a funded reserve account for its obligations under its service contracts issued and outstanding in this State.__The reserves may not be less than 40% of the gross consideration received, less claims paid, on the sale of the service contract for all contracts in force.__The reserve account is subject to examination and review by the superintendent; and

(2)__Place in trust with the superintendent a financial security deposit, having a value of not less than 5% of the gross consideration received, less claims paid, on the sale of the service contract for all service