Alaska

NHSCA members in 2003 uncovered an initiative in Alaska to exempt home service contracts from insurance code treatment. With NHSCA direct support and testimony,  HB 120 became law July 17, 2003 to clearly and broadly exempt home service contracts

Alaska HB 120    CS FOR HOUSE BILL NO. 120(RLS) am

"An Act excluding service contracts from regulation as insurance; relating to insurance licensing for motor vehicle service contracts and home warranties; and providing for an effective date."

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:

Section 1. AS 21.03.021 is amended by adding a new subsection to read:

(e)  This title does not apply to a service contract offered, issued for delivery,

delivered, or renewed in this state.  In this subsection, "service contract"

means a service contract or agreement for a separate or additional

consideration, for a specific duration, to

(A)  maintain, service, repair, or replace tangible personal

property, or to indemnify for repair, replacement, or maintenance, for an

operational or structural failure due to a defect in materials or workmanship or

normal wear and tear, with or without additional provision for incidental

indemnity payments when service, repair, or replacement is not reasonably or

commercially feasible;

(B)  repair, replace, or maintain tangible personal property

damaged as a result of power surges or as a result of accidental damage from

the handling of property damaged by power surges; or

(C)  repair, replace, or maintain household consumer goods,

household appliances, and household systems, including damage resulting

from operational or structural failure due to a defect in materials or

workmanship or normal wear and tear;

(2)  does not include

(A)  mechanical breakdown insurance;

(B)  a contract that requires an indemnity payment per incident

and the payment exceeds the purchase price of the property serviced;

(C)  a contract to provide service on a motor vehicle subject to

registration under AS 28.10.011; or

(D)  a home warranty; in this subparagraph, "home warranty"

means a warranty that covers the entire home and does not include a warranty

limited to a household system or appliance.

Sec. 2. AS 21.27.010(h) is amended to read:

(h)  This chapter does not apply to a person

(1) licensed to practice as an attorney at law while the person is acting

as an attorney at law ; or (2)  who sells, solicits, or negotiates a (A)  service contract on a motor vehicle subject to registration under AS 28.10.011; or (B)  home warranty; in this subparagraph, "home warranty" has the meaning given in AS 21.03.021(e)(2)(D) .

Sec. 3. This Act takes effect immediately under AS 01.10.070(c).

None at this time

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