Overview
Service Contract Providers must register with the Department of Financial Services to do business in New York. An entity may only do business in the name in which they are licensed.
To apply to register, provide the following to DFS:
- Prior approval. The names of all corporations, partnerships, limited liability companies and trade names must receive prior approval from the Department of Financial Services for use in New York. Name changes for entities must also receive prior approval. The name must first be submitted to the Department for consideration, and either approval or disapproval will be forwarded in writing, along with the appropriate application and instructions. See Trade Names and Name Changes section below for more detail.
After receiving Department approval, provide the following:
- Service Contract Provider Registration Application Form
- Copy of New York Department of State filing receipt (see more below)
- Registration Fee (see more below)
Default Contingency Plan Agreement (see more below) - Evidence of a Reimbursement Insurance Policy (see more below)
- Any other documentation required in Application form questions #10 and #11
Designated Administrator
If an Administrator is designated, attach an Administrator’s Acknowledgement of Obligations, as required in Question #8 of the Application, to your registration application.
Child Support Form
Persons four (4) months in arrears in child support or who have failed to comply with a summons, subpoena, or warrant relating to paternity or child support proceeding may be subject to suspension of their business, professional, driver, and/or recreational licenses and permits including, but not limited to, licenses pursuant to §11-0713 of the Environmental Law. Intentional submission of false statements for the purposes of frustrating/defeating lawful enforcement of support obligations is punishable under §175.35 of the Penal Law. Complete and submit a Child Support Obligation Form if applicable, as required in Question #9.
Registration Fee
The registration fee is for two years – March 1 to February 28 of odd years.
The fee is $500 for a registration issued in the first year of the two-year licensing period and $250 for a registration issued in the second year. Check must be made payable to the Superintendent of Financial Services.
Trade Names and Name Changes
The names of all corporations, partnerships, limited liability companies and trade names must receive prior approval from the Department of Financial Services for use in New York. Name changes for entities must also receive prior approval. Requests for name approval should be submitted by email to [email protected]. Approval or disapproval will be sent with additional instructions.
Note: The licensee can only do business in the name in which he/she or it is licensed.
Name changes for entities must include amended Department of State filing receipts or business certificates and the return of all licenses in the previous name.
Individual trade names
Residents
Residents must file with the county clerk’s office in the county in which your business address is located. After filing, we require a copy of the business certificate from the county clerk’s office.
Non-Residents
Non-residents must be currently licensed and in compliance in your declared home state.
Note: your license information must be included in the national producer database. If it is not, you must submit a currently dated certification from the state you have declared as your home state and in which your principle place of business or residence is located.
Entity trade names
Resident and non-residents must file with the New York State Department of State (DOS). After filing, we (DFS) need a copy of the DOS filing receipt or proof of filing the assumed name with DOS. Visit the Department of State website, call DOS at (518) 473-2492 or write to them at New York state Department of State, Division of Corporations, 41 state street, 2nd floor, Albany, NY 12231.
Corporations
Residents and Non-residents
Residents and Nonresidents must file with the New York State Department of State (DOS). After filing, we (DFS) need a copy of the DOS filing receipt or proof of filing with DOS. Visit the Department of State website, call DOS at (518) 473-2492, or write to them at New York State Department of State, Division of Corporations, 41 state street, 2nd floor, Albany, New York 12231. We also require a copy of your articles of incorporation or charter to be submitted with your application.
Non-Residents
Non-residents must be currently licensed in the corporate name and in compliance in the declared home state. Note: the license information for your entity and for each of the individuals named as sub-licensees on the licensing application must be included in the national producer database. If not, a currently dated certification must be submitted from the state you have declared as your home state and in which your principle place of business or residence is located.
Limited liability companies
Residents and non-residents must file with the New York State Department of State (DOS). After filing, we (DFS) need a copy of the DOS filing receipt or proof of filing with the Department of State. Visit the Department of State website, call DOS at (518) 473-2492, or write to them at New York state Department of State, Division of Corporations, 41 state street, 2nd floor, Albany, New York 12231. We also require a copy of your articles of organization to be submitted with your application.
Non-Residents
Non-residents must be currently licensed in the limited liability name and in compliance in the declared home state. Note: the license information for your entity and for each of the individuals named as sub-licensees on the licensing application must be included in the national producer database; if not, a currently dated certification must be submitted from the state you have declared as your home state and in which your principle place of business or residence is located.
Partnerships
Residents
Residents must file with the county clerk’s office in the county in which your business address is located. After filing, we require a copy of the business certificate from the county clerk’s office.
Non-residents
Non-residents must be currently licensed in the partnership name and in compliance in the declared home state. Note: the license information for your entity and for each of the individuals named as sub-licensees on the licensing application must be included in the national producer database. If not, a currently dated certification must be submitted from the state you have declared as your home state and in which your principle place of business or residence is located.
Limited partnerships
Residents and non-residents
Residents and non-residents must file with the New York State Department of State (DOS). After filing, we (DFS) need a copy of the DOS filing receipt or proof of filing with DOS. Visit the Department of State website, call DOS at (518) 473-2492, or write to them at New York State Department of State, Division of Corporations, 41 state street, 2nd floor, Albany, New York 12231.
Non-Residents
Non-residents must be currently licensed in the limited partnership name and in compliance in the declared home state.
Note: the license information for your entity and for each of the individuals named as sub-licensees on the licensing application must be included in the national producer database. if not, a currently dated certification must be submitted from the state you have declared as your home state and in which your principle place of business or residence is located.
Note: The licensee can only do business in the name in which he/she or it is licensed.
Name changes for entities must include amended filing receipts or business certificates and the return of all licenses in the previous name.
Default Contingency Plan
Every application for registration as a provider under section 7907 of the Insurance Law that has elected to assure its obligations to contract holders by a funded reserve account and financial security or by net worth qualification, must provide a form of default contingency plan agreement to the DFS that provides:
- For the appointment of a claims trustee that is acceptable to the superintendent and who is registered as a provider, in the event of a provider’s default in performance as specified in sections 390.10;
- That the appointment shall be made within 15 days of the provider’s default; (e) and 390.11(c) of this Part;
- That the superintendent may make the appointment in the event the provider fails to make an appointment within the time specified by subdivision (b) of this section or if the appointed trustee fails to serve or resigns;
- For the trustee to administer all claims outstanding and which may arise after the provider’s default;
- For the trustee to receive from the superintendent the funded reserve account, any securities deposited with the superintendent as financial security, and, in the case of a provider that met the net worth qualification, all funds that said provider shall have allocated upon its books of account to obligations to contract holders arising from service contracts marketed, issued, sold or offered for sale, made or offered to be made, or administered in this State on and after January 15, 1998;
- For the trustee to apply all funds received pursuant to subdivision (e) of this section exclusively to the payment of claims arising from service contracts issued by the provider;
- For the trustee to have the power to bring actions or proceedings against the provider to obtain the funds provided for by subdivision (e) of this section and any additional funds that may be necessary for the payment of claims and expenses arising from service contracts issued by the provider
- That all funds received by the trustee pursuant to the default contingency plan shall be treated as trust funds and shall not be used for any purpose except as specified above.
Evidence of Reimbursement Policy
A service contract provider that elects to meet the requirements of section 7903(c)(1) of the Insurance Law as the means to assure the faithful performance of its obligations under service contracts outstanding in this state shall provide the Superintendent with evidence that appropriate coverage is in effect, in the form of a certificate from an insurer authorized to write service contract reimbursement insurance in New York.
The certificate shall be provided at the time of initial application for registration as a service provider, at the time of renewal, and at the time of any changes to the policy of the items specified in this section, other than the dates of the policy.
The certificate should specify:
- The name of the insurer.
- The name of the insured.
- Which service contracts are covered by the policy.
- The effective dates of the policy.
- The applicable policy limits, if any.
- The applicable deductibles, if any.
- That the insurance policy provides for direct coverage to the covered contract holders if the provider fails to pay or provide service on a claim within 60 days after proof of loss has been filed with the provider.
- That the termination of the insurance policy shall not affect or reduce the insurer’s obligations to, or responsibility for, direct coverage to contract holders whose service contracts were made during the term of the policy and were covered under the policy.
- That the insurance policy provides that the revocation, or other termination of the provider’s registration, for any reason, shall be construed to be a default by the provider and that the insurer will provide for direct coverage to the covered contract holders without having to wait 60 days.
- That the insurance policy provides that the suspension of the provider’s registration for more than 60 days shall be construed to be a default by the provider and that the insurer will provide for direct coverage to the covered contract holders without having to wait 60 days, until such time as the provider is permitted to resume business.
- That the coverage provided under the policy conforms with all of the requirements of article 79 of the Insurance Law and this Part.
FAQs and Selected Opinions
Mergers of Service Contract Providers
If two registered service contract providers plan to merge, what agreements have to be submitted to the Department of Financial Services?
What type of notice should be sent to the service contract holders of the non-surviving provider, if the claims process, telephone numbers, and addresses for contacting the service contract provider remain unchanged?
Is the service contract reimbursement insurer of the non-surviving service contract provider required to confirm that the service contract reimbursement coverage currently in effect will remain in effect until the expiration of all obligations under the provider’s issued service contracts?
Service Contract Providers and Risk Retention Groups
Can a risk retention group underwrite the obligations of a service contract provider?
Can a service contract provider like Alpha seek to "reinsure" 100% of the service contract risk?
Are the persons marketing service contracts that are backed up by insurance policies required to have an insurance license?
Licensing/Registration Requirements for Service Contract Providers
Must a person who is obligated under an agreement to perform repair, replacement or maintenance of property, or indemnification for repair, replacement or maintenance, due to a defect in materials or workmanship or wear and tear, and who is not the manufacturer or seller of the property or product to be serviced, obtain a license or certification from the Department?
Must a service contract provider file rates and forms for service contracts with the Department?
Must a person be licensed or certified by or registered with the Department to adjust claims and perform other customer services on behalf of service contract providers?
Must a service contract provider purchase service contract reimbursement insurance coverage to insure its obligations arising from the service contracts it sells?
After a service contract provider satisfies all of its obligations under a service contract, may such provider receive from the service contract reimbursement insurer a return of some of the premiums paid?
Warranties and Maintenance Agreements
Warranties covering defects in materials or workmanship made by manufacturers, sellers, or distributors of the product that is covered are very similar to service contracts but generally do not constitute either service contracts or insurance contracts.
Currently Registered Service Contract Providers
A service contract provider is any person or entity who sells or administers a service contract, and who is contractually obligated to provide service under the service contract. A provider must first register with and obtain approval from the Superintendent of Financial Services prior to selling any service contracts in New York. The applicant must provide acceptable proof of financial responsibility to meet its service contract obligations as required under the Insurance Law.
Use our online Service Provider Application to check your registration or to confirm that a Service Contract Provider is registered with DFS:
Windshield/Dent Repair Fee Filings
A provider who sells windshield repair service contracts or paintless dent repair service contracts is required to file the amount of the provider fee (the total amount of money and other consideration charged to the consumer for the service contract) for these contracts with the Superintendent at least 30 days prior to the effective date of the initial fee, or at least 30 days before the effective date of a change in the provider fee. The provider fee charged to a consumer for a windshield repair service contract or a paintless dent repair service contract may not exceed the amount filed with the Superintendent. Providers are not required to file their provider fees with the Superintendent for any other type of service contract.
A provider fee filing is not required for such a service contract where an authorized insurer is the service contract holder and the service contract is being utilized by the insurer as the mechanism providing for the repair of a damaged vehicle that is insured by the insurer. However, a provider whose service contract obligations are insured under a service contract reimbursement insurance policy is not exempt from the provider fee filing on that basis alone.
The provider fee is the total purchase price or consideration that is paid by the service contract holder for the service contract and every service contract must specify the “total purchase price.” The total purchase price is the actual total purchase price or consideration that the holder pays for the service contract; not the amount of money that the seller of the service contract remits to the provider for the provider’s windshield repair or paintless dent repair service contracts. These types of service contracts may not be sold to holders, either by the provider or anyone else who sells the service contract on the provider’s behalf, for any price other than for the amount of the provider fee that has been filed with the Superintendent.
A service contract provider that includes windshield repair or paintless dent repair services in a service contract that also provides other services (i.e. vehicle service or residential appliances and systems) must file the total purchase price for the entire service contract with the Superintendent unless the windshield repair or paintless dent repair services in the service contract are sold for a separately stated charge as an optional addition to the contract, in which case the provider may file the amount of that separately stated charge instead.
A registered provider that is required to file the amount of the provider fee with the Superintendent, or file a change in the filed provider fee, must do so electronically using the NAIC’s System for Electronic Rate and Form Filings (SERFF) system. Information on how to proceed using SERFF is available at www.serff.com.
When making service contract provider fee filing submissions in SERFF, a provider should utilize the Type of Insurance code (TOI) 33.0004 (Service Contracts). A provider must specify in its filing, for each service contract form, the name of the service contract form that appears on the service contract, a brief description of the services that are provided under the service contract and the amount of the provider fee for each service contract that they sell in New York.