LD 1640
pg. 4
Page 3 of 11 An Act Regarding Service Contracts Page 5 of 11
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LR 2384
Item 1

 
contracts issued and in force, but not less than $25,000,
consisting of:

 
(a)__A surety bond issued by an authorized surety;

 
(b)__Securities of the type eligible for deposit
by authorized insurers in this State;

 
(c)__Cash;

 
(d)__A letter of credit issued by a qualified
financial institution; or

 
(e)__Another form of security prescribed by
regulations issued by the superintendent; or

 
C.__Undertake to:

 
(1)__Maintain, or have its parent company maintain, a
net worth or stockholders' equity of at least
$100,000,000; and

 
(2)__Upon request, provide the superintendent with a
copy of the provider's or its parent company's most
recent Form 10-K or Form 20-F filed with the United
States Securities and Exchange Commission within the
last calendar year or, if the company does not file
with the United States Securities and Exchange
Commission, a copy of the provider's or its parent
company's audited financial statements that show a net
worth of the provider or its parent company of at least
$100,000,000.__If the parent company's Form 10-K, Form
20-F or audited financial statements are filed to meet
the provider's financial stability requirement, then
the parent company shall agree to guarantee the
obligations of the provider relating to service
contracts sold by the provider in this State.

 
5.__Right to void.__Service contracts must require the
provider to permit the service contract holder to return the
service contract within 20 days of the date the service contract
was mailed to the service contract holder or within 10 days of
delivery if the service contract is delivered to the service
contract holder at the time of sale or within a longer time
period permitted under the service contract.__ Upon return of the
service contract to the provider within the applicable time
period, if no claim has been made under the service contract
prior to its return to the provider, the service contract is void
and the provider shall refund to the service contract holder, or
credit the account of the service contract holder, with the full
purchase price of the service contract.__The right to void the
service contract provided in this subsection is not transferable


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