2324

LAWS OF MARYLAND

Ch. 574

SECTION 2. AND BE IT FURTHER ENACTED, That this Act
shall take effect July 1, 1981.

Approved May 19, 1981.

CHAPTER 575

(Senate Bill 834)

AN ACT concerning

Vehicle Dealers - Mechanical Repair Contracts

FOR the purpose of establishing certain insurance
requirements for certain mechanical repair contracts
entered into by licensed vehicle dealers; defining a
certain term; and generally relating to the regulation
of vehicle dealers.

BY adding to

Article - Transportation
Section 15-311.1
Annotated Code of Maryland
(1977 Volume and 1980 Supplement)

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That section(s) of the Annotated Code of Maryland
be repealed, amended, or enacted to read as follows:

Article - Transportation

15-311.1.

(A) (1) FOR THE PURPOSES OF THIS SECTION, THE TERM
"MECHANICAL REPAIR CONTRACT" MEANS ANY AGREEMENT OR CONTRACT
BETWEEN A LICENSED VEHICLE DEALER AND A CUSTOMER BY WHICH
THE DEALER AGREES TO PERFORM OVER A FIXED PERIOD OF TIME,
FOR A SPECIFIC DURATION AND FOR A SPECIFIC IDENTIFIABLE
PRICE, SERVICES RELATING TO THE MAINTENANCE OR REPAIR OF A
MOTOR VEHICLE; PROVIDED THAT THE PURCHASE OF THE CONTRACT IS
OPTIONAL TO THE PURCHASER.

(2) THE TERM "MECHANICAL REPAIR CONTRACT"
INCLUDES, BUT IS NOT LIMITED TO, EXTENDED WARRANTIES AND
EXTENDED SERVICE CONTRACTS.

(B) (1) ANY LICENSED VEHICLE DEALER WHO OFFERS,
PROVIDES, OR SELLS MECHANICAL REPAIR CONTRACTS SHALL
MAINTAIN ADEQUATE INSURANCE RESERVES, AS DEFINED BY THE
INSURANCE COMMISSIONER, FOR EACH SUCH CONTRACT FOR THE
PROTECTION OF THE PURCHASING CONSUMER.