Sec. 1304.159. CANCELLATION BY PROVIDER; REFUND. (a) A provider may cancel a service contract by mailing a written notice of cancellation to the service contract holder at the service contract holder's last known address according to the records of the provider. The provider must mail the notice before the fifth day preceding the effective date of the cancellation. The notice must state the effective date of the cancellation and the reason for the cancellation.
(b) The provider is not required to provide prior notice of cancellation if the service contract is canceled because of:
(1) nonpayment of the consideration for the contract;
(2) fraud or a material misrepresentation by the service contract holder to the provider or the provider's administrator; or
(3) a substantial breach of a duty by the service contract holder relating to the covered product or its use.
(c) A service contract holder whose contract is canceled by the provider in accordance with this section is entitled to a prorated refund of the purchase price of the contract reflecting the remaining term of the contract, based on mileage, time, or another reasonably applicable measure of the remaining term that must be disclosed in the contract, decreased by the amount of any claims paid under the contract. A provider who cancels a contract under this section may not impose a cancellation fee.
Added by Acts 2001, 77th Leg., ch. 1421, Sec. 3, eff. June 1, 2003.
Amended by:
Acts 2011, 82nd Leg., R.S., Ch. 1081 (S.B. 1169), Sec. 1.15, eff. September 1, 2011.
Acts 2011, 82nd Leg., R.S., Ch. 1081 (S.B. 1169), Sec. 1.16, eff. September 1, 2011.
Section: Previous 1304.152 1304.1521 1304.153 1304.1531 1304.154 1304.155 1304.156 1304.1581 1304.159 1304.160 1304.161 1304.201 1304.202 1304.203 1304.204 NextLast modified: September 28, 2016