2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 21 - Automobile Clubs or Associations and Service Contracts (§§ 2101 — 2134) › Subchapter II - Service Contracts (§§ 2123 — 2134) › § 2125 - Definitions

As used in this subchapter:
(1) Maintenance contract.— Means a contract of limited duration that only provides programmed maintenance. The maintenance contract shall not include any of the obligations included in the service contract.
(2) Service contract.— Means a contract or agreement issued in exchange for a separate identified payment, of stipulated duration, through which the repair, replacement or incidental maintenance of the goods, or compensation for said repair, replacement or maintenance that is needed due to an operating or structural deficiency that arise due to a defect in materials, labor or fair wear and tear of the goods, is to be provided. A service contract may contain additional provisions for incidental payments under specified circumstances, for services such as towing and emergency service on the road, or in the case of goods that are not a motor vehicle, to cover damages caused by an electric power failure or accidental damage due to its use, if the latter do not constitute the main services offered in the contract. A service contract does not include insurance against mechanical failures, maintenance contracts or manufacturer’s guarantee.
(3) Manufacturer.— Means a person who manufactures or produces an article and sells it under his/her name or trademark; or that is a subsidiary fully-owned by the person who manufactures or produces the article, or that is a corporation that owns one hundred percent (100%) of the entity that manufactures or produces the article; or who does not manufacture or produce the article but sells it under his/her own name or trademark; or who manufactures or produces the article which is sold under the name or trademark of another person; or who does not manufacture or produce the article, but, pursuant to a written contract, authorizes another person to sell it under the name or trademark of the former.
(4) Manufacturer’s guarantee.— Means the guarantee offered by the manufacturer, importer or vendor of goods or services related thereto, free of additional costs, which is not negotiated separately from the sale of the product, that is incidental to its sale and binds said manufacturer, importer or vendor, to compensate for defective parts, mechanical failure or electrical defects.
(5) Fees.— Means the total payment made in exchange of a service contract.
(6) Reimbursement insurance policy.— Means an insurance policy issued in behalf of a provider, whereby the insurer is bound, for the benefit of the contract holders, to execute all the obligations and responsibilities of the provider under the terms of the service contract, in the event of noncompliance with all said obligations and responsibilities by the provider. The term “all said obligations and responsibilities” includes, but is not limited to compliance with the obligations established in the service contract, and the reimbursement of unearned fees, in the event the provider does not make said reimbursement when the service contract is cancelled or terminated. A “reimbursement insurance policy” shall also be deemed to be the one whereby an insurer makes a commitment to compensate the provider for those payments or for the cost of those products or services that he/she is bound to offer under the service contracts issued by him/her, when said policy also provides for compliance with the holder of the contract, of all the obligations and responsibilities of the provider in the event of noncompliance thereof by the provider.
(7) Premium.— Means the payment made by a provider to an insurer for a reimbursement insurance policy.
(8) Provider.— Means any natural or juridical person, resident or nonresident in Puerto Rico, that is bound under a service contract.
(9) Non-original replacements.— Means replacement parts not manufactured for or by the original manufacturer of the product.
(10) Insurance against mechanical failures.— Means a policy or contract issued by an authorized insurer whereby he/she is bound to repair, replace or maintain, or to compensate for said repair, replacement or maintenance, in the event that specific goods covered by said insurance suffer operating or structural failure due to defects in the materials or labor, or caused by the normal wear and tear of said goods.
(11) Contract holder.— Means the person who acquires a service contract or that is the holder of said contract.
History —Ins. Code, added as § 21.250 on Sept. 8, 2000, No. 392, § 3.