4-114-103. Definitions.

4-114-103. Definitions. As used in this chapter: (1) “Administrator” means the person who is responsible for the administration of a service contract; (2) “Consumer” means an individual who buys other than for purposes of resale any tangible personal property that is distributed in commerce and that is normally used for personal, family, or household purposes and not for business or resale purposes; (3) “Maintenance agreement” means a contract of limited duration that provides for scheduled maintenance only; (4) “Manufacturer” means a person that: (A) Manufactures or produces property and sells the property under its own name or label; (B) Is a wholly owned subsidiary of the person that manufactures or produces that property; (C) Is a corporation that owns one hundred percent (100%) of the person that manufactures or produces the property; (D) Does not manufacture or produce the property, but the property is sold under its trade name label; (E) Manufactures or produces the property, and the property is sold under the trade name or label of another person; or (F) Does not manufacture or produce the property but licenses the use of its trade name or label under a written contract with another person that sells the property under the licensor's trade name or label; (5) “Mechanical breakdown insurance” means a policy, a contract, or an agreement issued by an authorized insurer that provides for the repair, replacement, or maintenance of property or indemnification for repair, replacement, or service for the operations or structural failure of the property due to a defect in materials or workmanship or to normal wear and tear; (6) “Nonoriginal manufacturer's parts” means replacement parts not made for or by the original manufacturer of the property, commonly referred to as “after market parts”; (7) “Person” means an individual, a partnership, a corporation, an incorporated or unincorporated association, a joint stock company, a reciprocal, a syndicate, or any similar entity or combination of entities acting in concert; (8) “Premium” means the consideration paid to an insurer for a reimbursement insurance policy; (9) “Provider” means a person that is contractually obligated to the service contract holder under the terms of the service contract; (10) “Provider fee” means the consideration paid for a service contract; (11) “Reimbursement insurance policy” means a policy of insurance issued to a provider to either: (A) Provide reimbursement to the provider under the terms of the insured service contracts issued or sold by the provider; or (B) In the event of the provider's nonperformance, to pay on behalf of the provider all covered contractual obligations incurred by the provider under the terms of the insured service contracts issued or sold by the provider; (12)(A) “Service contract” means a contract or an agreement for a separately stated consideration and for a specific duration to perform the service, repair, replacement, or maintenance of property or indemnification for service, repair, replacement, or maintenance for the operational or structural failure of property due to a defect in materials, workmanship, or normal wear and tear, with or without additional provision for incidental payment of indemnity under limited circumstances, including without limitation unavailability of parts, obsolescence, food spoilage, rental, or shipping. (B) “Service contract” does not include mechanical breakdown insurance or maintenance agreements. (C) A service contract may provide for the repair, replacement, or maintenance of property for damage resulting from power surges or accidental damage from handling. (D) A service contract is not insurance in this state or otherwise regulated under the Arkansas Insurance Code; (13) “Service contract holder” means a person that is the purchaser or holder of a service contract; and (14) “Warranty” means a warranty made solely by the manufacturer, importer, or seller of property or services without charge that: (A) Is not negotiated or separated from the sale of the product; (B) Is incidental to the sale of the product; and (C) Guarantees indemnity for defective parts, mechanical breakdown, or electrical breakdown and labor or other remedial measures, such as repair or replacement of the property or repetition of services.