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KANSAS STATUTES AND CODES

40-201a. Service contract; exempt from regulation.

40-201a

Chapter 40.--INSURANCE
Article 2.--GENERAL PROVISIONS

      40-201a.   Service contract; exempt fromregulation.(a) The marketing, sale, offering for sale, issuance, making,proposing tomake and administration of a service contract shall not be construed to be thebusiness of insurance and shall be exempt from regulation as insurance pursuantto chapter 40 of the Kansas Statutes Annotated, and amendments thereto.

      (b)   For the purposes of this section, "service contract" means a contract oragreement for a separate or additional consideration, for any specifiedduration, to service, repair, replace or maintain all or any part of anystructural component, appliance or utility system of any residentialproperty, consumer good or other property; or to indemnify for service,repair, replacement or maintenance for consumer good or other property, dueto a defect in materials, workmanship, normal wear and tear; or as a result ofpower surges or as a result of accidental damage from the handling of anyconsumergood or other property, with or withoutadditional provision forindemnitypayments, when service repair or replacement is not reasonably,commercially oreconomically feasible. Service contract also includes any nonconsumercommercial service contract. Service contract does not include an automobileclub service as defined in K.S.A. 40-2507, and amendments thereto.

      (c) (1)   No service contract which is exempt from regulation as insurancepursuant to chapter 40 of the Kansas Statutes Annotated, and amendmentsthereto, pursuant to this section shall contain any provision forconsequential damages unless such consequential damages are caused by thefailure of service, repair, replacement or maintenance rendered under theservice contract.

      (2)   No service contract which is exempt from regulation as insurance pursuantto chapter 40 of the Kansas Statutes Annotated, and amendments thereto,pursuant to this section shall contain any provision, except as exempt by thissection, which would otherwise be covered by a contract of property orliability insurance issued in this state.

      History:   L. 2005, ch. 140, § 1;L. 2006, ch. 73, § 1; July 1.

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