Senate File 487 - Introduced
SENATE FILE
BY COMMITTEE ON WAYS AND
MEANS
(SUCCESSOR TO SF 348)
(SUCCESSOR TO SSB
1156)
A BILL FOR
1 An Act regulating the sale of portable electronics insurance,
2 including requiring licensure, providing for fees and
3 penalties, and including effective date provisions.
4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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1 1 Section 1. NEW SECTION. 522E.1 Definitions.
1 2 As used in this chapter, unless the context otherwise
1 3 requires:
1 4 1. "Commissioner" means the commissioner of insurance.
1 5 2. "Consumer" means a person who purchases portable
1 6 electronics in a retail transaction.
1 7 3. "Endorsee" means an unlicensed employee or authorized
1 8 representative of a licensed portable electronics vendor.
1 9 4. "Enrollment" means the process of soliciting or accepting
1 10 enrollments or applications from a consumer under a portable
1 11 electronics insurance policy, which includes informing the
1 12 consumer of the availability of coverage, preparing and
1 13 delivery of the certificate of insurance or notice of proposed
1 14 insurance, or otherwise assisting the consumer in making an
1 15 informed decision whether or not to elect to purchase portable
1 16 electronics insurance.
1 17 5. "Free=trial offer" means an offer to a consumer under
1 18 which portable electronics insurance is provided free of charge
1 19 for a limited time period subsequent to which a charge is made
1 20 to the consumer for the insurance.
1 21 6. a. "License period" means all of that three=year period
1 22 beginning as described in paragraph "b", subparagraph (1) or
1 23 (2), as applicable, and ending the second succeeding year on
1 24 the last calendar day of the month in which the initial license
1 25 was issued.
1 26 b. A license period shall be determined for each person as
1 27 follows:
1 28 (1) Upon initial licensing, the license period shall start
1 29 on the date the license is issued.
1 30 (2) For a subsequent license, the license period shall
1 31 start on the first day following the month in which the initial
1 32 license was issued.
1 33 c. A license shall be renewed on or before the expiration
1 34 date of the license period.
1 35 7. a. "Portable electronics" means any of the following
2 1 devices:
2 2 (1) Personal, self=contained, easily carried by an
2 3 individual, battery=operated electronic communication, viewing,
2 4 listening, recording, gaming, computing, or global positioning
2 5 devices, including cell or satellite phones, pagers, personal
2 6 global positioning satellite units, portable computers,
2 7 portable audio listening, video viewing or recording devices,
2 8 digital cameras, video camcorders, portable gaming systems,
2 9 docking stations, and automatic answering devices, including
2 10 their accessories and service related to the use of the
2 11 devices.
2 12 (2) Any other electronic device that is portable in nature
2 13 that the commissioner approves.
2 14 b. "Portable electronics" does not include
2 15 telecommunications switching equipment, transmission
2 16 wires, cell site transceiver equipment, or other equipment
2 17 and systems used by telecommunications companies to provide
2 18 telecommunications service to consumers.
2 19 8. a. "Portable electronics insurance" means a contract
2 20 providing coverage for the repair or replacement of portable
2 21 electronics against any one or more of the following causes of
2 22 loss: loss, theft, mechanical failure, malfunction, damage, or
2 23 other applicable perils.
2 24 b. "Portable electronics insurance" does not include any of
2 25 the following:
2 26 (1) A service contract or extended warranty providing
2 27 coverage limited to the repair, replacement, or maintenance of
2 28 property for the operational or structural failure of property
2 29 due to a defect in materials, workmanship, accidental damage
2 30 from handling, power surges, or normal wear and tear.
2 31 (2) A policy of insurance covering a seller's or a
2 32 manufacturer's obligations under a warranty.
2 33 (3) A homeowner's, renter's, private passenger automobile,
2 34 commercial multiperil, or similar policy.
2 35 9. "Portable electronics insurance license" means a document
3 1 issued by the commissioner pursuant to this chapter authorizing
3 2 a portable electronics vendor to offer or sell portable
3 3 electronics insurance in this state.
3 4 10. "Portable electronics vendor" means any person in the
3 5 business, directly or indirectly, of selling, reselling,
3 6 soliciting, or leasing portable electronics, their accessories,
3 7 and related services to consumers.
3 8 Sec. 2. NEW SECTION. 522E.2 Licensure required.
3 9 A person shall not offer or sell any form of portable
3 10 electronics insurance in this state unless the person is
3 11 licensed as an insurance producer pursuant to chapter 522B,
3 12 is issued a portable electronics insurance license pursuant
3 13 to this chapter, or is an endorsee who is in compliance with
3 14 section 522E.6.
3 15 Sec. 3. NEW SECTION. 522E.3 Portable electronics insurance
3 16 license.
3 17 A portable electronics vendor that applies for a license
3 18 and complies with the requirements of this chapter shall
3 19 be issued a portable electronics insurance license by the
3 20 commissioner that authorizes the licensee and the licensee's
3 21 endorsees to offer or sell portable electronics insurance to
3 22 a consumer in connection with, and incidental to, the sale of
3 23 portable electronics or the sale and provision of accessories
3 24 or services related to the use of portable electronics.
3 25 Sec. 4. NEW SECTION. 522E.4 Application and fees.
3 26 1. A portable electronics vendor applying for a portable
3 27 electronics insurance license under this chapter shall submit
3 28 all of the following to the commissioner:
3 29 a. A written application for licensure, signed by the
3 30 applicant or an officer of the applicant, in the form
3 31 prescribed by the commissioner.
3 32 b. A certificate by the insurer that is to be named in
3 33 the portable electronics insurance license, stating that the
3 34 insurer is satisfied that the named applicant is trustworthy
3 35 and competent to act as a portable electronics insurance
4 1 licensee limited to this purpose and that the insurer will
4 2 appoint the applicant to act as its agent to transact the kind
4 3 or kinds of insurance that are permitted by this chapter if the
4 4 portable electronics insurance license applied for is issued by
4 5 the commissioner. The certification shall be subscribed by an
4 6 officer or managing agent of the insurer on a form prescribed
4 7 by the commissioner.
4 8 c. An application fee of the lesser of fifty dollars per
4 9 each endorsee at a location of the vendor or five hundred
4 10 dollars per location valid for a three=year period and, for
4 11 each three=year period thereafter, a renewal fee in the same
4 12 amount. A maximum fee of five thousand dollars shall apply
4 13 for licensure of a portable electronics vendor with multiple
4 14 locations. The fees collected shall be deposited as provided
4 15 in section 505.7.
4 16 2. Costs associated with any enforcement action against or
4 17 investigation of a portable electronics vendor licensed under
4 18 this chapter shall be paid for by the portable electronics
4 19 vendor.
4 20 Sec. 5. NEW SECTION. 522E.5 License renewal.
4 21 1. Not less than sixty days before a portable electronics
4 22 insurance license will expire, the commissioner may use an
4 23 electronic delivery method, including electronic mail or other
4 24 similar electronic method of delivery, to deliver, or may mail,
4 25 to the latest electronic mail or mailing address appearing in
4 26 the commissioner's records, an application to the licensee
4 27 to renew a portable electronics insurance license for the
4 28 appropriate succeeding license term. It is the licensee's
4 29 responsibility to renew the license, whether or not a renewal
4 30 notice is received.
4 31 2. The commissioner may accept a late renewal without
4 32 penalty, provided that the licensee's failure to comply is due
4 33 to a clerical error or inadvertence.
4 34 3. An application for renewal of a portable electronics
4 35 insurance license may be filed on or before the expiration
5 1 date of the license. An application for renewal of an expired
5 2 license may be filed after the expiration date and until that
5 3 same month and date of the next succeeding year.
5 4 4. The commissioner shall impose a penalty fee equal to
5 5 one=half of the renewal fee for the portable electronics
5 6 insurance license for any application for renewal that is filed
5 7 after the expiration date of the license.
5 8 Sec. 6. NEW SECTION. 522E.6 Endorsee requirements.
5 9 An endorsee of a portable electronics vendor that has been
5 10 issued a portable electronics insurance license pursuant to
5 11 this chapter may sell or offer insurance products under the
5 12 authority of the vendor's portable electronics insurance
5 13 license if all of the following conditions have been met:
5 14 1. The endorsee is eighteen years of age or older.
5 15 2. The portable electronics vendor, at the time of
5 16 submission of an application for a portable electronics
5 17 insurance license pursuant to section 522E.4, includes a list
5 18 of all locations in this state at which the vendor intends
5 19 to offer coverage under a policy of portable electronics
5 20 insurance. The list shall be maintained by the portable
5 21 electronics vendor in a form prescribed by, or format
5 22 acceptable to, the commissioner, shall be updated annually,
5 23 and shall be made available to the commissioner for review and
5 24 inspection upon request.
5 25 3. The portable electronics vendor provides for the
5 26 training of its endorsees under a program developed by a
5 27 licensed property and casualty insurance producer prior to
5 28 allowing its endorsees to offer or sell portable electronics
5 29 insurance. The training shall meet the following minimum
5 30 standards:
5 31 a. Each endorsee shall receive instruction about the
5 32 applicable kinds or types of portable electronics insurance
5 33 authorized for sale to prospective consumers in this state as
5 34 provided in section 522E.9, subsection 5.
5 35 b. Each endorsee shall receive training about ethical sales
6 1 practices.
6 2 c. Each endorsee shall receive training about the
6 3 disclosures to be given to prospective consumers pursuant to
6 4 section 522E.9.
6 5 d. The retraining of endorsees shall be conducted whenever
6 6 there is a material change in the insurance products sold that
6 7 requires modification of the training materials, but in no
6 8 event less frequently than every three years for each endorsee.
6 9 e. The portable electronics vendor shall maintain a list
6 10 of its endorsees who have completed the required training, and
6 11 make the list available to the commissioner upon request.
6 12 Sec. 7. NEW SECTION. 522E.7 Endorsee conduct.
6 13 An endorsee may act on behalf of and under the supervision of
6 14 a licensed portable electronics vendor in matters relating to
6 15 transacting portable electronics insurance under that vendor's
6 16 license. The conduct of an endorsee acting within the scope of
6 17 the endorsee's employment or agency shall be deemed the conduct
6 18 of the licensed portable electronics vendor for purposes of
6 19 this chapter.
6 20 Sec. 8. NEW SECTION. 522E.8 Violations and penalties.
6 21 1. If a licensed portable electronics vendor or endorsee
6 22 violates any provision of this chapter or any other provision
6 23 of this title, the commissioner may do any of the following:
6 24 a. After notice and hearing, suspend or revoke the license
6 25 of the portable electronics vendor.
6 26 b. After notice and hearing, impose penalties on the
6 27 portable electronics vendor for its conduct or that of its
6 28 endorsees.
6 29 c. After notice and hearing, impose other penalties that the
6 30 commissioner deems necessary and convenient to carry out the
6 31 purposes of this chapter, including suspending the privilege
6 32 of transacting portable electronics insurance pursuant to
6 33 this chapter at specific business locations of the portable
6 34 electronics vendor where violations have occurred, imposing
6 35 penalties on the portable electronics vendor, and suspending or
7 1 revoking the ability of individual endorsees to act under the
7 2 vendor's license.
7 3 2. If any person sells insurance in connection with, or
7 4 incidental to, the sale of portable electronics or the sale
7 5 or provision of accessories or services related thereto, or
7 6 holds oneself or an organization out as a licensed portable
7 7 electronics vendor without obtaining the license required
7 8 by this chapter, or as being an insurance producer licensed
7 9 pursuant to chapter 522B without obtaining that license, the
7 10 commissioner may issue a cease and desist order.
7 11 Sec. 9. NEW SECTION. 522E.9 Requirements at time of sale.
7 12 A licensed portable electronics vendor shall not sell
7 13 portable electronics insurance pursuant to this chapter unless,
7 14 at the time of sale, or reasonably thereafter with respect to a
7 15 sale or enrollment occurring by telephone, all of the following
7 16 conditions are satisfied:
7 17 1. The portable electronics vendor provides brochures or
7 18 other written materials to the prospective consumer that do all
7 19 of the following:
7 20 a. Summarize the material terms and conditions of coverage
7 21 offered, including the identity of the insurer.
7 22 b. Describe the process for filing a claim, including a
7 23 toll=free telephone number to report a claim.
7 24 c. Disclose any additional information on the price,
7 25 benefits, exclusions, conditions, or other limitations of those
7 26 policies that the commissioner may, by rule, prescribe.
7 27 d. Provide the name, address, telephone number, and license
7 28 number of the portable electronics vendor or the property
7 29 and casualty insurance broker=agent appointed by the insurer
7 30 issuing portable electronics insurance coverage to the portable
7 31 electronics vendor.
7 32 2. The portable electronics vendor or its endorsees
7 33 make all of the following disclosures, which shall either
7 34 be acknowledged in writing by the consumer, be provided in
7 35 writing to the consumer, or, for sales made in person, shall
8 1 be displayed by clear and conspicuous signs that are posted at
8 2 every location where portable electronics insurance contracts
8 3 are executed, such as the counter where the consumer signs the
8 4 portable electronics insurance contract:
8 5 a. That the purchase by the consumer of the kinds of
8 6 insurance prescribed in this chapter is not required in order
8 7 to purchase portable electronics, accessories, or related
8 8 services.
8 9 b. That the insurance policies offered by the portable
8 10 electronics vendor may provide a duplication of coverage
8 11 already provided by other insurance policies covering the
8 12 consumer.
8 13 c. That the vendor or endorsee of the portable electronics
8 14 vendor is not qualified or authorized to evaluate the adequacy
8 15 of the consumer's existing insurance coverages, unless that
8 16 person is licensed pursuant to chapter 522B.
8 17 d. That the consumer may cancel the insurance at any time.
8 18 If the consumer cancels, any unearned premium will be refunded
8 19 in accordance with applicable law.
8 20 3. The material terms and conditions of coverage are
8 21 provided to every person who elects to purchase the coverage.
8 22 4. Costs for the insurance are separately itemized in any
8 23 billing statement for the insurance. However, if the portable
8 24 electronics insurance is included with the purchase or lease
8 25 of portable electronics and accessories or related services,
8 26 the portable electronics vendor shall clearly and conspicuously
8 27 disclose to the consumer that the insurance coverage is
8 28 included with the purchase of the portable electronics or
8 29 related services and shall disclose the stand=alone cost of the
8 30 premium for the same or similar insurance on the consumer's
8 31 bill and in any marketing materials made available at the point
8 32 of sale.
8 33 5. The portable electronics insurance is provided under
8 34 an individual policy issued to the consumer, or under a group
8 35 or master policy issued to an organization through a licensed
9 1 insurance producer or through a licensed portable electronics
9 2 vendor by an insurer authorized to transact the applicable
9 3 kinds or types of insurance in this state.
9 4 6. Portable electronics insurance shall not be sold through
9 5 a free=trial offer.
9 6 Sec. 10. NEW SECTION. 522E.10 Charges and collection of
9 7 moneys.
9 8 1. Charges for portable electronics insurance may be billed
9 9 and collected by a licensed portable electronics vendor. A
9 10 licensed vendor shall not be required to maintain those moneys
9 11 in a segregated account if the insurer represented by the
9 12 vendor has provided in writing that the moneys need not be
9 13 segregated from moneys received by the portable electronics
9 14 vendor on account of the sale or lease of portable electronics
9 15 or related services or accessories.
9 16 2. All moneys received by a licensed portable electronics
9 17 vendor from a consumer for the sale of portable electronics
9 18 insurance shall be considered moneys held in trust by the
9 19 portable electronics vendor in a fiduciary capacity for the
9 20 benefit of the insurer. A licensed portable electronics vendor
9 21 may receive compensation for billing and collection services.
9 22 Sec. 11. NEW SECTION. 522E.11 Other restrictions.
9 23 1. Under the authority of a portable electronics insurance
9 24 license, a portable electronics vendor shall not do any of the
9 25 following:
9 26 a. Offer to sell insurance except in conjunction with, and
9 27 incidental to, the business of selling portable electronics,
9 28 their accessories, or related services.
9 29 b. Advertise, represent, or otherwise portray itself or
9 30 its endorsees as licensed insurers or property and casualty
9 31 insurance broker=agents.
9 32 c. Pay an endorsee compensation based primarily on the
9 33 number of consumers electing coverage under the portable
9 34 electronics vendor's license. However, this chapter does
9 35 not prohibit the payment of compensation to an endorsee
10 1 of a portable electronics vendor for activities under the
10 2 vendor's license that is incidental to the endorsee's overall
10 3 compensation. The incidental compensation shall not exceed
10 4 fifteen dollars per transaction for portable electronics
10 5 insurance coverage.
10 6 2. Unless lawfully transacting the business of insurance
10 7 pursuant to a certificate of authority issued for the
10 8 appropriate class of insurance, a person obligated to perform
10 9 under a contract offered in or from this state that meets the
10 10 definition of portable electronics insurance shall be deemed to
10 11 be unlawfully transacting the business of insurance.
10 12 Sec. 12. NEW SECTION. 522E.12 Policy forms.
10 13 An insurer that provides insurance to be sold by a licensed
10 14 portable electronics vendor shall file a copy of the policy
10 15 form issued to a consumer, or of any policy or certificate
10 16 issued under a group or master policy to an organization
10 17 through an insurance producer licensed under chapter 522B
10 18 or through a licensed portable electronics vendor, with the
10 19 commissioner, who shall make the policy form available to the
10 20 public.
10 21 Sec. 13. NEW SECTION. 522E.13 Portable electronics
10 22 insurance policy changes.
10 23 1. An insurer may terminate a portable electronics
10 24 insurance policy or otherwise change the terms and conditions
10 25 of a portable electronics insurance policy only upon
10 26 providing the licensed portable electronics vendor that is
10 27 the policyholder and enrolled consumers with at least thirty
10 28 calendar days' written notice.
10 29 2. If the insurer changes the terms and conditions of a
10 30 policy of portable electronics insurance, the insurer shall
10 31 provide the licensed portable electronics vendor that is the
10 32 policyholder with a revised policy or endorsement and each
10 33 enrolled consumer with a revised certificate, endorsement,
10 34 updated brochure, or other evidence indicating that a change
10 35 in the terms and conditions of the policy has occurred and a
11 1 summary of those changes.
11 2 3. Notwithstanding subsection 1, an insurer may terminate
11 3 an enrolled consumer's enrollment under a portable electronics
11 4 insurance policy upon fifteen calendar days' notice for
11 5 discovery of fraud or material misrepresentation in obtaining
11 6 coverage or in the presentation of a claim under the policy.
11 7 4. Notwithstanding subsection 1, an insurer may immediately
11 8 terminate an enrolled consumer's enrollment under a portable
11 9 electronics insurance policy without prior notice for any of
11 10 the following reasons:
11 11 a. Nonpayment of premium.
11 12 b. If the enrolled consumer ceases to have an active service
11 13 with the licensed portable electronics vendor that is the
11 14 policyholder.
11 15 c. If the enrolled consumer exhausts the aggregate limit of
11 16 liability, if any, under the terms of the portable electronics
11 17 insurance policy and the insurer sends notice of termination
11 18 to the enrolled consumer within thirty calendar days after
11 19 exhaustion of the limit. However, if notice is not sent within
11 20 thirty calendar days, enrollment shall continue notwithstanding
11 21 the aggregate limit of liability until thirty calendar days
11 22 from the date the insurer sends notice of termination to the
11 23 enrolled consumer.
11 24 5. If a portable electronics insurance policy is terminated
11 25 by the licensed portable electronics vendor that is the
11 26 policyholder, the portable electronics vendor shall mail or
11 27 deliver a written notice to each enrolled consumer advising
11 28 the enrolled consumer of the termination of the policy and the
11 29 effective date of termination. The written notice shall be
11 30 mailed or delivered by the portable electronics vendor to the
11 31 enrolled consumer at least thirty calendar days prior to the
11 32 termination. However, if the notice is not sent within thirty
11 33 calendar days, enrollment shall continue until thirty calendar
11 34 days from the date the portable electronics vendor sends notice
11 35 of termination to the enrolled consumer or until a new portable
12 1 electronics insurance policy is in effect.
12 2 6. Whenever notice or correspondence with respect to a
12 3 policy of portable electronics insurance is required pursuant
12 4 to this section, it shall be in writing and sent within the
12 5 notice period required pursuant to this section. Notices
12 6 and correspondence shall be sent to the licensed portable
12 7 electronics vendor that is the policyholder at the portable
12 8 electronics vendor's mailing address specified for that purpose
12 9 and to its affected enrolled consumers' last known mailing
12 10 addresses on file with the insurer or the portable electronics
12 11 vendor. The insurer or portable electronics vendor shall
12 12 maintain proof that the notice or correspondence was sent for
12 13 not less than three years after that notice or correspondence
12 14 was sent.
12 15 Sec. 14. NEW SECTION. 522E.14 Rules.
12 16 The commissioner may adopt rules pursuant to chapter 17A to
12 17 implement and administer this chapter.
12 18 Sec. 15. NEW SECTION. 522E.15 Other law.
12 19 Nothing in this chapter regulating the sale of portable
12 20 electronics insurance shall be construed to impair or impede
12 21 the application of any other law regulating the sale of
12 22 portable electronics insurance.
12 23 Sec. 16. EFFECTIVE DATE. This Act takes effect January 1,
12 24 2016.
12 25 EXPLANATION
12 26 The inclusion of this explanation does not constitute agreement with
12 27 the explanation's substance by the members of the general assembly.
12 28 This bill creates new Code chapter 522E for the purpose
12 29 of regulating the sale of portable electronics insurance,
12 30 including requiring licensure of portable electronics vendors
12 31 to offer or sell portable electronics insurance, and providing
12 32 for fees and penalties.
12 33 New Code chapter 522E defines "portable electronics" as
12 34 devices that are personal, self=contained, easily carried by
12 35 an individual, battery operated, and used for a variety of
13 1 specified purposes, and accessories or services related to
13 2 the use of such devices. "Portable electronics insurance" is
13 3 a contract providing coverage for the repair or replacement
13 4 of portable electronics. Such insurance does not include a
13 5 service contract or extended warranty or insurance covering
13 6 a seller's or manufacturer's obligations under a warranty.
13 7 A "portable electronics insurance license" issued by the
13 8 commissioner of insurance authorizes a portable electronics
13 9 vendor to offer or sell portable electronics insurance. A
13 10 "portable electronics vendor" is a person in the business,
13 11 directly or indirectly, of selling, reselling, soliciting, or
13 12 leasing portable electronics, their accessories, and related
13 13 services to consumers.
13 14 Persons are prohibited from offering or selling portable
13 15 electronics insurance unless they are licensed as insurance
13 16 producers under Code chapter 522B, are issued a portable
13 17 electronics insurance license pursuant to the provisions of the
13 18 bill, or are endorsees in compliance with the provisions of the
13 19 bill. A portable electronics insurance license issued by the
13 20 commissioner of insurance authorizes a portable electronics
13 21 vendor and its endorsees, i.e., unlicensed employees or
13 22 authorized representatives of the vendor, to offer or sell
13 23 portable electronics insurance to consumers in connection with,
13 24 and incidental to, the sale of portable electronics or the sale
13 25 and provision of accessories or services related to the use of
13 26 portable electronics.
13 27 A portable electronics vendor must file an application for a
13 28 license to sell portable electronics insurance that includes a
13 29 certificate by the insurer that the vendor is trustworthy and
13 30 competent, and is accompanied by a fee of $50 for each endorsee
13 31 at a location of the vendor, or $500 per location, whichever
13 32 amount is less, with a maximum fee of $5,000 for vendors with
13 33 multiple locations. The bill also contains provisions for
13 34 renewal of the license.
13 35 An endorsee of a licensed vendor may sell or offer portable
14 1 electronics insurance under the authority of the vendor's
14 2 license if the endorsee is at least 18 years old; the vendor
14 3 supplies a list with its license application of all locations
14 4 at which insurance will be offered; the vendor provides for
14 5 training of its endorsees about portable electronics insurance,
14 6 ethical sales practices, required disclosures to prospective
14 7 purchasers, and retraining about new products at least every
14 8 three years; and the vendor maintains a list of endorsees who
14 9 have completed training.
14 10 If the bill's provisions are violated by a licensed vendor or
14 11 an endorsee, the commissioner may, after notice and a hearing,
14 12 revoke or suspend the license, or impose other penalties
14 13 including suspending authorization to sell the insurance at
14 14 specific business locations where violations have occurred, and
14 15 suspend or revoke the ability of individual endorsees to act
14 16 under the vendor's license.
14 17 The commissioner may issue a cease and desist order against
14 18 a person who sells insurance in connection with, or incidental
14 19 to, the sale of portable electronics, or related accessories
14 20 or services without obtaining the license required by the bill
14 21 or being licensed as an insurance producer under Code chapter
14 22 522B.
14 23 A licensed portable electronics vendor is prohibited from
14 24 selling portable electronics insurance unless at the time of
14 25 sale or enrollment in the insurance or within a reasonable
14 26 time after a telephone transaction, the vendor makes specified
14 27 disclosures and provides written information to the prospective
14 28 customer that includes material terms and conditions of
14 29 coverage; describes the claims process; discloses additional
14 30 information about the policy; and provides information about
14 31 the vendor.
14 32 Costs for the insurance must be separately itemized in any
14 33 billing statement for the insurance, or, if the insurance is
14 34 included with the purchase or lease of portable electronics
14 35 and accessories or related services, the stand=alone cost for
15 1 similar insurance must be disclosed on the consumer's bill and
15 2 in marketing materials available at the point of sale.
15 3 The sale of portable electronics insurance to a customer
15 4 through a "free=trial offer" is prohibited.
15 5 Charges for portable electronics insurance may be billed
15 6 and collected by a licensed portable electronics vendor. The
15 7 vendor is not required to segregate those moneys if the insurer
15 8 provides that such segregation is not necessary, but such
15 9 moneys are considered moneys held in trust by the vendor in a
15 10 fiduciary capacity for the benefit of the insurer. Vendors may
15 11 receive compensation for billing and collection services.
15 12 A licensed portable electronics vendor is prohibited from
15 13 offering to sell insurance except in conjunction with and
15 14 incidental to the business of selling portable electronics and
15 15 related services and accessories; advertising or representing
15 16 itself or its endorsees as licensed insurers or property and
15 17 casualty broker=agents; paying an endorsee compensation based
15 18 primarily on the number of customers that purchase portable
15 19 electronics insurance, except that incidental compensation for
15 20 such transactions is allowed; or transacting the business of
15 21 any insurance other than portable electronics insurance.
15 22 An insurer that issues portable electronics insurance must
15 23 file a copy of the policy forms used with the commissioner, who
15 24 shall make the forms available to the public.
15 25 The bill specifies termination and notice provisions for
15 26 portable electronics insurance.
15 27 Whenever notice or correspondence related to notice is
15 28 required, the notice must be in writing and sent within the
15 29 required notice period. Notices and correspondence must be
15 30 sent to the licensed vendor that is the policyholder at the
15 31 mailing address specified for that purpose and to the last
15 32 known mailing addresses on file for affected consumers. The
15 33 insurer or the vendor shall maintain proof that the notice or
15 34 correspondence was sent for not less than three years.
15 35 The commissioner of insurance may adopt rules to implement
16 1 and administer new Code chapter 522E.
16 2 Nothing in new Code chapter 522E regulating the sale of
16 3 portable electronics insurance shall be construed to impair or
16 4 impede the application of any other law regulating the sale of
16 5 such insurance.
16 6 New Code chapter 522E takes effect January 1, 2016.
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