InfoBytes Blog
New Mexico modifies the Service Contract Regulation Act
On April 4, the New Mexico governor signed SB 350, which amends the state’s Service Contract Regulation Act to prevent providers from including automatic renewal provisions within service contracts unless they are clearly disclosed. The Act defines a service contract as a contract in which a provider is obligated for a specific period to repair, replace, or perform maintenance on property described in the contract, or to reimburse or indemnify the holder for costs to repair, replace, or perform maintenance on that property. Under SB 350, in addition to the automatic renewal requirements, the bill allows a service contract holder to provide notice, at least 30 days in advance, of its intent not to review a service contract. If a holder cancels a service contract, subject to the bill’s timing restrictions, the provider is required to refund the contract holder one hundred percent of the unearned pro rata provider fee, less any claims paid, and the provider may charge an administrative fee of up to 10 percent of the purchase price of the contract. The bill is effective June 14.