This material is intended to inform organizations issuing service contracts in Vermont of the purpose and requirements of Title 8, Chapter 113, Subchapter 4. Service contract organizations are companies that issue contracts customarily requiring payment for the promise of future service, repair or replacement of consumer products.
The law addresses service contracts, extended warranties and similar agreements issued, sold or provided to consumers in Vermont. Under the law, the contracts are not defined as insurance and the sellers of the contracts are not considered insurance agents. The law requires service contract organizations to register with the Vermont Department of Financial Regulation. It also makes them responsible for key consumer protections. The protections include a.) establishing standards of financial stability, b.) requiring the use of contracts that contain mandatory provisions and disclosures and c.) establishing or prohibiting specific market conduct practices.