Revision: Dec. 14, 2021, 12:53 p.m.
SB 206 - AS INTRODUCED
2022 SESSION
22-2927
11/04
SENATE BILL 206
AN ACT relative to consumer guaranty contracts.
SPONSORS: Sen. French, Dist 7; Sen. Gannon, Dist 23; Sen. Carson, Dist 14; Sen. Avard, Dist 12; Sen. Soucy, Dist 18; Sen. Reagan, Dist 17; Sen. Cavanaugh, Dist 16; Rep. Hunt, Ches. 11; Rep. Potucek, Rock. 6
COMMITTEE: Commerce
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ANALYSIS
This bill excludes prepaid legal services contracts from the definition of "consumer guaranty contract" and prohibits certain consumer guaranty contract acts and terms.
This bill is a request of the insurance department.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
22-2927
11/04
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Twenty Two
AN ACT relative to consumer guaranty contracts.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Consumer Guaranty Contracts; Definitions; Consumer Guaranty Contract. Amend RSA 415-C:1, III(c)(6)-(7) to read as follows:
(6) Warranties, service contracts, and maintenance agreements sold or offered for sale to persons other than consumers. [This provision does not apply to prepaid legal contracts, which may be offered to any governmental corporation, unit, agency, or department, or to any employer or association of employers, a labor union or other similar employee organization, including the trustees of a fund established by such labor union or employee organization. The term "employee" and " employees" shall have the same meaning as are given to such terms for the purpose of writing group life insurance in this state.]
(7) Debt cancellation or debt suspension contracts between a creditor and a borrower for the cancellation or suspension of the debt.
(8) Prepaid legal contracts.
2 New Subparagraph; Consumer Guaranty Contracts; Prohibited Acts. Amend RSA 415-C:7, I by inserting after subparagraph (h) the following new subparagraph:
(i) Fail to refund all unearned premium to the contract holder at the time of cancellation. Contract fees are earned pro-rata over the length of the contract.
3 Consumer Guaranty Contracts; Prohibited Terms. Amend RSA 415-C:7, III(c)-(d) to read as follows:
(c) The consumer does not have the right to bring an action to enforce the terms of the contract or otherwise challenge the denial of a claim which the consumer believes is wrongful. Consumer guaranty contracts may include provisions requiring the parties to submit to alternative dispute resolution, including a provision requiring binding arbitration that would expressly limit the right of the consumer to bring an action in a court of law, if such provision complies with and does not impede the rights of the consumer as provided under RSA 542. All arbitration provisions shall state that they are subject to RSA 542; [or]
(d) Any civil action or alternative dispute resolution procedure brought in connection with the consumer guaranty contract shall be brought in the courts of a jurisdiction other than New Hampshire[.]; or
(e) The obligor shall have the right to deny a claim based upon a prior authorization unless the obligor is able to show that not requesting prior authorization substantially prejudiced the obligor's ability to adjust the claim.
4 Repeal. The following are repealed:
I. RSA 415-C:1, II(b)(2), relative to the definition of consumer guaranty contracts as it relates to prepaid legal services contracts.
II. RSA 415-C:1, IX, relative to the definition of prepaid legal services contract.
5 Effective Date. This act shall take effect 60 days after its passage.