Important Changes to Consumer Guaranty Contract Law

The State of New Hampshire Insurance Department 21 South Fruit Street, Suite 14 Concord, NH 03301 David J. Bettencourt Keith E. Nyhan Commissioner Deputy Commissioner BULLETIN Docket #INS 24-068-AB TO: Obligors, Administrators, Sellers and All Other Consumer Guaranty Contract Stakeholders FROM: Commissioner David J. Bettencourt DATE: November 15, 2024 – Amended November 25, 2024 RE: Important Changes to Consumer Guaranty Contract Law In New Hampshire, the sale of consumer guaranty contracts – i.e., service contracts for home, automobiles, or other products – is governed by RSA 415-C. Prompted by numerous consumer complaints related to these types of products, the New Hampshire Insurance Department (NHID) worked with industry professionals and the New Hampshire legislature to pass changes to the law regulating entities selling, marketing, or administering service contracts. The changes to the law, outlined in Senate Bill 515 (https://www.gencourt.state.nh.us/bill_Status/pdf.aspx?id=32035&q=billVersion), seek to provide clarity, fairness, and compliance in consumer guaranty contracts, and become effective on January 1, 2025. Significant changes include: • New Registration Requirements: RSA 415-C:3 now requires obligors to annually submit detailed information regarding administrators and sellers with which they do business, allowing the NHID to better ensure compliance with all the substantive standards in RSA 415-C. The obligor registration forms are available on NHID’s website at https://www.insurance.nh.gov/companies/applications. • Required Filings: Obligors will now be required to file all service contract language with NHID through the System for Electronic Rates & Forms Filing (SERFF). See Senate Bill 515 (https://www.gencourt.state.nh.us/bill_Status/pdf.aspx?id=32035&q=billVer sion). If the Commissioner finds the terms of the contracts to be contrary to Telephone 603-271-2261 • Fax 603-271-1406 • TDD Access: Relay NH 1-800-735-2964 nh.gov/insurance the public interest, inequitable, misleading, deceptive, or violative of law, he may require those terms to be changed, or the form to be withdrawn. SERFF is now accepting filings in advance of the January 1, 2025, deadline. Obligors shall only file forms that will be issued to New Hampshire residents on and after January 1, 2025. There are no NHID form filing fees associated with these SERFF filings. • Enhanced Marketing Standards: In addition to the previous prohibitions on deceptive or fraudulent practices, individuals and entities marketing consumer guaranty contracts are prohibited from using pressure tactics, unbranded materials, and any practice which specifically targets senior citizens. These changes will better protect New Hampshire consumers from unscrupulous entities in this market. All entities selling, marketing, or administering these products must comply with these – and other – changes to the law, effective January 1, 2025. As always, the Department is ready to assist our stakeholders with any questions they may have as they implement these changes to their businesses. Please direct any questions on this issue to consumerguarantycontracts@ins.nh.gov. 2