Iowa Administrative Code › Agency 191 - Insurance Division › Regulated Industries › Chapter 103 - Residential and Motor Vehicle Service Contracts › Rule 191-103.6 - Prohibited Acts or Practices

Current through Register Vol. 47, No. 3, July 24, 2024
(1)
Defamation.
A service company is prohibited from, directly or
				indirectly, doing, or aiding, abetting or encouraging, the following: the
				making, publishing, disseminating, or circulating of any oral or written
				statement, or of any pamphlet, circular, article or literature which is false
				or maliciously critical as to the financial condition of any person and which
				is calculated to injure that person.
(2)
Boycott, coercion, and
				intimidation.
A service company is prohibited from entering into any
				agreement to commit, or by any concerted action committing, any act of boycott,
				coercion, or intimidation resulting in or tending to result in unreasonable
				restraint of, or monopoly in, the service contract industry.
(3)
False statements.
A
				service company is prohibited from knowingly filing with any supervisory or
				other public official, or knowingly making or causing directly or indirectly to
				be made, published, disseminated, circulated, delivered to any person, or
				placed before the public, any false material statement of fact as to the
				financial condition of a person.
(4)
False entries.
A service
				company is prohibited from knowingly making any false entry of a material fact
				in any book, report or statement of any person and from knowingly omitting to
				make a true entry of any material fact pertaining to the business of that
				person in any book, report or statement of that person.
(5)
Misrepresentation, false
				advertising, and unfair practices.
a. A service company shall not:
(1) Use in its name, contracts, or
				literature, any of the words "insurance," "casualty," "surety," "mutual," or
				any other words descriptive of the insurance, casualty or surety business or
				deceptively similar to the name or description of any insurance or surety
				corporation, or any other service company. This subparagraph does not apply to
				a service company also licensed as an insurance company.
(2) Represent or imply in any manner that the
				service company has been sponsored or recommended, or that the service
				company's abilities or qualifications have in any respect been passed upon, by
				the division or by the state of Iowa. Nothing in this subrule prohibits a
				statement, other than in a paid advertisement, that a person has received a
				license, if the statement is true in fact and if the effect of the license's
				issuance is not misrepresented.
(3)
				Without the written consent of the customer, knowingly charge for duplication
				of coverage or duties required by state or federal law, or duplication of a
				warranty expressly issued by a manufacturer or seller of a product or any
				implied warranty enforceable against the lessor, seller or manufacturer of a
				product.
(4) Make, permit or cause
				any false or misleading statements, either oral or written, in connection with
				the sale, offer to sell or advertisement of a service contract.
(5) Permit or cause the omission of any
				material statement that, under the circumstances, should have been made in
				connection with the sale, offer to sell, or advertisement of a service
				contract, in order that other statements also made in connection with the sale,
				offer to sell or advertisement of a service contract would not be
				misleading.
(6) Make, permit or
				cause any false or misleading statements, either oral or written, about the
				benefits or services available under the service contract.
(7) Make, permit or cause any statement or
				practice which has the effect of creating or maintaining a fraud.
(8) Cause, directly or indirectly, to be
				made, published, disseminated, circulated, or placed before the public in a
				newspaper, magazine or other publication, or in the form of a notice, circular,
				pamphlet, letter or poster, or over any radio or television station, or in any
				other way, an advertisement, announcement or statement containing any
				assertion, representation, or statement with respect to the service contract
				industry or with respect to any service company which is untrue, deceptive or
				misleading.
(9) Require the use of
				used parts in the repair of a motor vehicle covered by a motor vehicle service
				contract unless the service company has obtained prior written authorization by
				the vehicle owner or unless all of the following are true regarding any rebuilt
				parts:
1. The parts have been dismantled and
				reconstructed as necessary.
2. All
				of the internal and external parts have been cleaned and made free from rust
				and corrosion.
3. All impaired,
				defective, or substantially worn parts have been restored to a sound condition
				or replaced with new, rebuilt, or unimpaired used parts.
4. All rewinding or machining or other
				necessary operations have been performed.
5. The rebuilt parts have been put in working
				condition, using, as minimum standards, the manufacturer's performance
				specifications in existence when the parts were originally manufactured if
				those specifications are publicly available.