Section 2757.6 - Release of Escrow Account Funds to Assist Service Contractholders(a) The Director may direct the trustee to release funds held in the funded escrow account of a service contract seller under the following conditions: (1) The service contract seller petitions the Director, through the Bureau, to release funds in the account in order to pay for repair services required to meet obligations to service contractholders. Such a petition shall contain evidence that the service contract seller is unable to meet his or her obligations except through the use of funds in the escrow account. Such a petition shall include financial statements and an accompanying written narrative by an officer of the service contractor, signed under penalty of perjury, detailing the financial condition of the service contractor and why the service contractor is unable to meet its service contract obligations except by use of escrow funds. The petition shall present a plan for corrective action that details how the service contractor will correct the deficiency in its funded escrow account or will otherwise discharge its obligations to the service contract holders.
(2) A service contractholder or group of service contract holders petitions the Director, through the Bureau, to release funds in the account in order to pay for repair services required to meet obligations to service contractholders. Such petition shall set forth the efforts the service contractholders took to obtain repair service from the service contract seller (or obligor).(b) Upon receipt of a petition requesting the release of funds held in the funded escrow account of a service contract seller, the Director shall investigate the claims made in such petition and shall, within thirty (30) days, issue his or her decision on the petition. If the Director grants the petition, he or she may order appropriate action to protect the interests of service contractholders which includes, but, is not limited to:(1) The issuance of an interim order restricting the service contractor's ability to enter into new service contracts during the period when the Director has authorized the trustee to release funds from the escrow account to pay for repair services.(2) Requiring the service contractor to appoint a third party to process applications from service contract holders for escrow account funds to pay for covered repairs.Cal. Code Regs. Tit. 16, § 2757.6
1. New section filed 9-21-95; operative 10-21-95 (Register 95, No. 38). Note: Authority cited: Section 9814, Business and Professions Code. Reference: Sections 494, 9855.2, 9855.3 and 9863, Business and Professions Code.
1. New section filed 9-21-95; operative 10-21-95 (Register 95, No. 38).