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be remitted by check to the Administrator no later than the 15th
day of the following month, together with a remittance report
summarizing VSC sales during the month. After verification and
processing of the information contained in the remittance
reports, the Dealerships' payments were distributed
appropriately.
The Administrator Agreement provided for the refund of these
payments in the event that the VSC was canceled in accordance
with its terms. The "unearned" portions of: (1) Reserves
attributable to the canceled contract (exclusive of any
investment income), (2) the Fees, (3) the Premium, and (4) the
Commissions were refunded to the dealer, who then would forward
the combined amounts of these refunds, plus the "unearned"
portion of its profit on the sale to the purchaser.
The Dealerships' access to the reserves held in escrow was
strictly controlled. Under the Administrator Agreement, release
of reserves to a dealer required the approval of both Escrow
Trustees and was limited to the following circumstances:
1. When the dealer had performed repairs for a contract
holder, it was entitled to compensation at standard rates for
parts and labor.
2. When a VSC sold by the dealer was canceled in accordance
with its terms, the dealer was entitled to the return of the
amount it owed to the contract holder.
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Last modified: May 25, 2011