Code of Ethics

Standards of Conduct and Practice of the National Home Service Contract Association

Preamble:
Whereas, the purpose for which the National Home Service Contract Association was organized are:• Nurture the home service contract industry and the use by the public of home service contracts nationwide;

• Improve and expand the performance of the market for service contracts nationwide;

• Encourage sound and ethical business practices among its members;

• Conduct research into economical techniques that improve the public’s understanding of the value of the home service contract and implement such techniques deemed feasible.

• Inform its members of changes in laws and practices as well as pending legislation that affects the home service contract market nationwide;

• Sponsor meetings and educational programs; and

• Cooperate with public regulatory agencies, private agencies and professional organizations in the establishment of sound home service contract industry standards and practices.

• Whereas, the Members of this Association are mindful that the soundness, usefulness, prosperity and future of the home service contract industry depends upon the honor, integrity, and fidelity of all personnel engaged in this business:

• Therefore be it resolved, that each member of this Association pledges to observe and maintain the following Code of Ethics and Standards of Conduct and Practice in dealing with the public and with other members of this Association.

1. Members shall conduct their business in a professional manner, ensuring that their personnel are knowledgeable in the areas of the home service contract industry in which they participate and are acting in compliance with sound industry practices and regulatory agency requirements.

2. Members shall act in conformity with all applicable laws and regulations and shall cooperate in every appropriate way with this Association, and all governmental bodies in the interest of establishing and maintaining an efficient and fair framework for home service contract use by the public.

3. Members shall act in a manner that recognizes that integrity and confidence are essential in the home service contract industry.

4. Members shall not breach or avoid an agreement or commitment. Members of this Association shall not induce the transfer of an applicant to a contract of their own after the acceptance by another home service contract company of a seller’s application.

5. Members shall encourage healthy competition in the home service contract industry. Members shall refrain from directly making negative comparisons or any comparisons of coverage or pricing for such coverage, and Members shall refrain from making negative remarks against other competing companies within the home service contract industry, whether or not a member of this Association.

6. Members shall refrain from interpreting the policies, procedures and coverage of other companies within the home service contract industry. Members shall ensure that the literature and materials displayed by other members of the home service contract industry, wherever such items are displayed, shall be afforded professional respect, and members shall not determine which home service contract company’s materials shall be displayed in any such location.

7. It is the intent of this Association and its members to foster a positive image for the home service contract industry among the public and among the various professionals recommending or potentially recommending home service contracts to the public. This Association shall from time to time sponsor meetings, provide informational materials concerning the Association and home service contracts, and conduct educational programs among its members and among the public as deemed feasible by the Association.

8. Members shall conduct their business without regard to the race, color, sex, religion, marital status, national origin, or the age of the persons with whom they deal.

9. Members shall cooperate with this Association in furnishing information relative to any investigation of a possible violation of this Code of Ethics and Standards of Conduct and Practice. Violations of the complaints concerning the Code of Ethics and Standards of Conduct and Practice shall be filed in a timely manner with the Association by each Member having cause to make such a filing.

Statement of Principles

1. We will provide the home buyer and seller with fair, sound and clear coverage at published prices.

2. We will respond to all service requests in a rapid and timely manner. Emergency problems will receive immediate attention

3. We will pay our contractors in a reasonable and stated time period thereby protecting homeowners.

4. We will carefully screen contractors.

5. We will maintain all capital, surplus and reserves required by the regulatory agencies governing our industry to protect homeowners.

6. We will adjudicate disputes between homeowners, contractors and our Company in a fast and fair manner.

Code of Ethics

Each of the members of the association subscribes to the following:

1. Present oneself and one’s Company in a professional manner asserting the positives of your Company’s program.

2. Never make disparaging remarks about the competition. It is bad manners and bad business.

3. Literature is for the use of brokers, associates and homeowners. Don’t take it on yourself to decide which Companies’ literature will be displayed.

4. Always speak positively of one’s competitors and the Industry. Refrain from interpreting competitor’s policies, procedures or coverage.

5. Acceptance of a seller application forms a binding contract. We will refrain from inducing the transfer from one Home Service Contract Company to another.

Added by Amendment April 3, 2009

National Policy on Provider Comparison Chart Advertising

Amendment to Code of Ethics

WHEREAS the NHSCA Code of Ethics provides in part that the members of this association are mindful that the soundness, usefulness, prosperity and future of the home service contract industry depends upon the honor, integrity, and fidelity of all personnel engaged in this business:

AND WHEREAS the NHSCA respects all facets of healthy competition and a vital home service contract market for the benefit of all consumers;

AND WHEREAS the NHSCA membership promotes fair, accurate and ethical advertising for its membership and the industry; actively discourages misleading, unfair and unethical advertising within the marketplace;

The NHSCA has accordingly reviewed the issue of  “comparison chart advertising’ both past and current, by providers in the home service contract industry and finds as follows:

• That all advertising has some aspects of subjectivity but such subjectivity should not replace the principal of fair advertising and truthfulness for the benefit of all consumers.

• The NHSCA finds as unfair, comparison charts (or other comparative advertising) which :

• List a variety of covered items but omit material items or material facts about the companies the advertising company is comparing itself against.

• State misleading, inaccurate or omission about another company that is a material element of the comparison.

• State misleading, inaccurate or omission about its own company/product that is a material element of the comparison.

• Mislead consumers into believing that the advertising company is something or has certain attributes that it does not.

• All consumers benefit from a vital, competitive and healthy market and the NHSCA encourages all consumers to fully inform and educate themselves about home service contract products and providers.

• A full and complete disclosure of one’s own benefits is the best method to encourage competition, innovation and accurate consumer comparison and choice of benefits and price.

• That all comparison chart advertising should be carefully reviewed and highly scrutinized for accuracy prior to any publication.

THEREFORE, the NHSCA hereby amends its Code of Ethics adopted March 4, 2004 that the use of comparison charts in advertising be done fairly, after careful review and that comparison of competitor benefits is done in good faith with a priority on accuracy.

Adopted at teleconference meeting April 3, 2009