Bill Text: IA HSB520 | 2013-2014 | 85th General Assembly | Introduced
Bill Title: A study bill for regulating the sale of portable electronics insurance, including requiring licensure, and providing for fees and penalties.
Spectrum: Unknown
Status: (N/A - Dead) 2014-01-22 - In Commerce [HSB520 Detail]
Download: Iowa-2013-HSB520-Introduced.html
House
Study
Bill
520
-
Introduced
HOUSE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
COMMERCE
BILL
BY
CHAIRPERSON
COWNIE)
A
BILL
FOR
An
Act
regulating
the
sale
of
portable
electronics
insurance,
1
including
requiring
licensure,
and
providing
for
fees
and
2
penalties.
3
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
4
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H.F.
_____
Section
1.
NEW
SECTION
.
522E.1
Purpose.
1
The
purpose
of
this
chapter
is
to
provide
for
the
limited
2
licensing
of
vendors
when
a
vendor
sells
an
insurance
product
3
or
coverage
in
connection
with
and
incidental
to
the
sale
or
4
lease
of
a
portable
electronic
device.
5
Sec.
2.
NEW
SECTION
.
522E.2
Definitions.
6
As
used
in
this
chapter,
unless
the
context
otherwise
7
requires:
8
1.
“Commissioner”
means
the
commissioner
of
insurance.
9
2.
“Customer”
means
a
person
who
purchases
or
leases
10
portable
electronic
devices.
11
3.
“Limited
licensee”
means
a
vendor
who
is
authorized
to
12
offer
or
sell
portable
electronics
insurance
pursuant
to
this
13
chapter.
14
4.
“Location”
means
any
physical
location
in
this
state,
or
15
any
internet
site,
call
center
site,
or
similar
site
directed
16
to
residents
of
this
state.
17
5.
“Portable
electronic
device”
means
an
electronic
18
device
that
is
personal,
self-contained,
easily
carried
by
19
an
individual,
battery
operated,
and
used
for
communication,
20
viewing,
listening,
recording,
gaming,
computing,
or
global
21
positioning,
including
a
cell
or
satellite
phone,
pager,
22
personal
global
positioning
satellite
unit,
portable
computer,
23
portable
audio
listening,
video
viewing,
or
recording
device,
24
digital
camera,
video
camcorder,
portable
gaming
system,
25
docking
station,
automatic
answering
device,
or
any
other
26
similar
device,
or
an
accessory
or
service
related
to
the
27
use
of
such
a
device,
with
a
value
of
less
than
one
thousand
28
dollars
at
the
time
of
purchase
or
lease.
29
6.
a.
“Portable
electronics
insurance”
means
insurance
30
providing
coverage
for
the
repair
or
replacement
of
a
portable
31
electronic
device
which
may
include
coverage
against
any
one
or
32
more
of
the
following
causes
of
loss:
33
(1)
Property
loss.
34
(2)
Theft.
35
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(3)
Inoperability
due
to
mechanical
failure.
1
(4)
Malfunction.
2
(5)
Damage.
3
(6)
Other
similar
causes
of
loss.
4
b.
“Portable
electronics
insurance”
does
not
include
any
of
5
the
following:
6
(1)
A
service
contract
or
extended
warranty
providing
7
coverage
limited
to
the
repair,
replacement,
or
maintenance
8
of
property
for
the
operational
or
structural
failure
of
the
9
property
due
to
a
defect
in
materials,
workmanship,
accidental
10
damage
from
handling
power
surges,
or
normal
wear
and
tear.
11
(2)
A
policy
of
insurance
covering
a
seller’s
or
12
manufacturer’s
obligations
under
a
warranty.
13
(3)
A
homeowner’s,
renter’s,
private
passenger
automobile,
14
commercial
multiperil,
or
similar
insurance
policy.
15
7.
“Vendor”
means
a
person
who
is
directly
or
indirectly
16
engaged
in
the
business
of
selling
or
leasing
a
portable
17
electronic
device.
18
8.
“Vendor
employee”
means
any
employee
at
least
eighteen
19
years
of
age
who
is
employed
by
a
vendor.
20
Sec.
3.
NEW
SECTION
.
522E.3
Limited
licenses.
21
1.
Notwithstanding
the
provisions
of
chapter
522B,
the
22
commissioner
may
issue
a
limited
license
to
a
vendor
that
23
has
complied
with
the
requirements
of
this
chapter
and
18
24
U.S.C.
§1033.
The
limited
license
shall
authorize
the
limited
25
licensee
to
offer
or
sell
portable
electronics
insurance
26
in
connection
with
and
incidental
to
the
sale
or
lease
of
27
a
portable
electronic
device
with
a
value
of
less
than
one
28
thousand
dollars.
29
2.
As
a
prerequisite
for
issuance
of
a
limited
license
30
under
this
section,
a
vendor
shall
file
a
written
application
31
for
a
limited
license,
signed
by
an
officer
of
the
applicant,
32
with
the
commissioner.
The
application
shall
be
in
a
form
and
33
contain
information
as
prescribed
by
the
commissioner.
The
34
application
shall
include
a
list
of
all
locations
where
the
35
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_____
vendor
intends
to
conduct
business.
A
list
of
vendor
employees
1
authorized
by
the
vendor
to
offer
or
sell
portable
electronics
2
insurance
shall
also
be
provided
to
the
commissioner.
If
the
3
list
of
authorized
vendor
employees
is
amended,
an
updated
list
4
shall
be
provided
to
the
commissioner
within
thirty
business
5
days
from
the
date
of
the
amendment.
6
3.
If
a
provision
of
this
section
is
violated
by
a
7
limited
licensee,
the
commissioner
may,
after
notice
and
a
8
hearing,
revoke
or
suspend
a
limited
license
issued
under
this
9
section,
or
impose
any
other
penalties,
including
suspension
10
of
authorization
to
offer
or
sell
portable
electronics
11
insurance
at
specific
vendor
locations
where
violations
of
this
12
section
have
occurred,
as
the
commissioner
deems
necessary
or
13
convenient
to
carry
out
the
purposes
of
this
chapter.
14
4.
A
vendor
licensed
pursuant
to
this
section
may
offer
15
or
sell
portable
electronics
insurance
issued
by
an
insurance
16
carrier
authorized
to
do
business
in
this
state
only
in
17
connection
with
and
incidental
to
the
sale
or
lease
of
a
18
portable
electronic
device.
A
customer
shall
not
be
required
19
to
purchase
portable
electronics
insurance
in
order
to
buy
or
20
lease
a
portable
electronic
device.
21
5.
a.
Portable
electronics
insurance
offered
or
sold
by
22
a
limited
licensee
pursuant
to
this
section,
whether
at
the
23
vendor
location
or
by
preselection
of
coverage
in
a
master,
24
corporate,
group,
or
individual
agreement,
shall
include
25
coverage
of
all
of
the
following:
26
(1)
Loss
of
the
portable
electronic
device.
27
(2)
Theft
of
the
portable
electronic
device.
28
(3)
Inoperability
of
the
portable
electronic
device
due
to
29
mechanical
failure
of
the
device.
30
(4)
Malfunction
of
the
portable
electronic
device.
31
(5)
Any
other
similar
cause
of
loss.
32
b.
Portable
electronics
insurance
purchased
in
connection
33
with
and
incidental
to
the
sale
or
lease
of
a
portable
34
electronic
device
shall
be
considered
primary
coverage
over
35
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all
other
collectible
insurance
that
may
apply
to
the
portable
1
electronic
device.
2
c.
An
insurance
carrier
that
issues
portable
electronics
3
insurance
in
this
state
shall
file
premium
and
loss
ratio
data
4
for
the
preceding
year
with
the
commissioner
by
April
1
of
each
5
year.
The
insurance
carrier
shall
maintain
a
minimum
loss
6
ratio
of
eighty
percent.
7
6.
Portable
electronics
insurance
shall
only
be
offered
or
8
sold
by
a
limited
licensee
pursuant
to
this
section
if
all
of
9
the
following
apply:
10
a.
The
period
of
the
portable
electronics
insurance
11
agreement
does
not
exceed
twelve
months,
unless
the
customer
12
is
notified
prior
to
continuation
of
the
policy
beyond
that
13
period.
14
b.
At
every
vendor
location
where
a
portable
electronics
15
insurance
agreement
is
executed,
brochures
or
other
written
16
materials
are
readily
available
to
a
prospective
customer
that
17
include
all
of
the
following
information:
18
(1)
A
clear
and
accurate
summary
of
the
material
terms
19
of
the
portable
electronics
insurance
coverage
that
is
20
being
offered
to
the
customer,
including
the
identity
of
the
21
insurance
carrier.
22
(2)
A
disclosure
that
the
portable
electronics
insurance
23
coverage
being
offered
by
the
vendor
may
provide
a
duplication
24
of
coverage
that
is
already
provided
by
the
customer’s
25
personal
automobile
insurance
policy,
homeowner’s
insurance
26
policy,
business
property
insurance
policy,
or
other
source
of
27
coverage.
28
(3)
A
statement
that
the
customer
is
not
required
to
29
purchase
portable
electronics
insurance
coverage
offered
30
pursuant
to
this
section
in
order
to
purchase
or
lease
a
31
portable
electronic
device.
32
(4)
A
description
of
the
process
for
filing
a
claim
under
33
the
portable
electronics
insurance
in
the
event
of
a
claim.
34
c.
Evidence
of
coverage
is
provided
in
the
insurance
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agreement
to
every
customer
who
purchases
portable
electronics
1
insurance,
that
includes
all
of
the
following
information:
2
(1)
The
material
terms
or
a
description
of
the
material
3
terms
of
the
portable
electronics
insurance
coverage.
4
(2)
A
description
of
the
process
for
filing
a
claim
under
5
the
portable
electronics
insurance.
6
(3)
A
description
of
the
process
for
canceling
the
portable
7
electronics
insurance
coverage.
8
(4)
The
identity
of
and
contact
information
for
the
9
insurance
carrier
that
issues
the
portable
electronics
10
insurance
coverage.
11
d.
A
fee,
compensation,
or
commission
is
not
paid
to
12
a
vendor
employee
by
a
vendor
based
solely
on
the
sale
of
13
portable
electronics
insurance
by
the
vendor
employee
under
a
14
limited
license
issued
pursuant
to
this
section.
15
7.
A
limited
license
issued
under
this
section
authorizes
16
a
vendor
employee
of
a
limited
licensee
to
act
individually
17
on
behalf,
and
under
the
supervision,
of
the
limited
licensee
18
with
respect
to
the
offer
and
sale
of
portable
electronics
19
insurance,
subject
to
the
requirements
of
subsection
8.
20
8.
In
order
to
offer
and
sell
portable
electronics
21
insurance,
a
vendor
employee
of
a
limited
licensee
must
22
successfully
complete
a
training
program,
pass
an
examination
23
covering
the
portable
electronics
insurance
products
offered
24
for
sale
by
the
limited
licensee
in
connection
with
and
25
incidental
to
the
sale
or
lease
of
a
portable
electronic
device
26
by
the
limited
licensee,
and
obtain
an
individual
license
27
pursuant
to
this
subsection.
28
a.
The
training
program
and
examination
shall
be
approved
29
and
administered
by
the
commissioner
or
by
a
vendor
approved
30
by
the
commissioner
pursuant
to
section
522E.6.
The
training
31
materials
shall,
at
a
minimum,
contain
instructions
on
the
32
types
of
portable
electronics
insurance
offered,
ethical
sales
33
practices,
and
required
disclosures
to
prospective
customers.
34
b.
A
vendor
employee
of
a
limited
licensee
shall
file
an
35
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application
with
the
commissioner
for
an
individual
license.
1
An
application
shall
be
deemed
approved
unless
the
commissioner
2
notifies
the
limited
licensee
of
the
denial
or
rejection
of
the
3
application
within
thirty
days
of
receiving
the
application.
4
An
application
shall
not
include
requirements
greater
in
scope
5
than
described
in
this
section.
6
9.
A
limited
licensee
shall
treat
moneys
collected
from
7
customers
purchasing
portable
electronics
insurance
when
buying
8
or
leasing
a
portable
electronic
device
as
moneys
received
in
a
9
fiduciary
capacity.
The
offer
or
sale
of
portable
electronics
10
insurance
not
in
conjunction
with
the
purchase
or
lease
of
a
11
portable
electronic
device
is
prohibited.
12
10.
A
limited
licensee
shall
not
advertise,
represent,
or
13
otherwise
hold
out
itself
or
any
of
its
employees
as
licensed
14
insurers,
insurance
producers,
or
insurance
brokers.
15
11.
A
limited
licensee
shall
not
engage
in
this
state
in
any
16
of
the
following:
17
a.
A
trade
practice
defined
in
chapter
507B
as,
or
18
determined
pursuant
to
section
507B.6
to
be,
an
unfair
method
19
of
competition
or
an
unfair
or
deceptive
act
or
practice
in
the
20
business
of
insurance.
21
b.
An
illegal
sales
practice
or
unfair
trade
practice
22
as
defined
in
rules
adopted
pursuant
to
chapter
17A
by
the
23
commissioner.
24
12.
A
limited
licensee
shall
not
do
any
of
the
following:
25
a.
Answer
technical
questions
about
the
benefits,
26
exclusions,
or
conditions
of
the
portable
electronics
insurance
27
coverage
offered.
28
b.
Evaluate
the
adequacy
of
a
prospective
customer’s
29
existing
insurance
coverage.
30
13.
A
vendor
employee’s
individual
license,
authorization,
31
or
certification
to
offer
or
sell
portable
electronics
32
insurance
products
under
this
chapter
shall
expire
when
the
33
vendor
employee’s
employment
with
the
vendor
terminates.
34
Sec.
4.
NEW
SECTION
.
522E.4
Term
of
limited
license.
35
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A
limited
license
issued
pursuant
to
this
chapter
is
valid
1
for
three
years
and
may
be
renewed
without
examination
if
the
2
renewal
application
is
received
in
a
timely
manner.
3
Sec.
5.
NEW
SECTION
.
522E.5
Fees.
4
The
fee
for
a
vendor
employee
individual
license
shall
5
be
fifty
dollars
per
vendor
employee.
In
no
case
shall
any
6
combined
fees
exceed
one
thousand
dollars
in
any
calendar
year
7
for
any
one
vendor,
limited
license
or
licensee,
or
renewal
8
license.
The
fees
collected
under
this
section
shall
be
9
deposited
as
provided
in
section
505.7.
10
Sec.
6.
NEW
SECTION
.
522E.6
Vendor
qualifications.
11
The
commissioner
may
approve
a
vendor
that
meets
the
12
requirements
of
this
section
as
a
qualified
vendor
to
13
administer
the
requirements
of
section
522E.3,
subsection
8.
14
A
qualified
vendor
shall
have
at
least
two
years
teaching
15
experience
relating
to
the
topic
of
the
products
described
16
in
this
chapter.
If
a
qualified
vendor
is
available,
the
17
commissioner
shall
utilize
the
qualified
vendor
closest
in
18
proximity
to
where
the
vendor
employee
is
employed
to
meet
the
19
requirements
in
section
522E.3,
subsection
8.
20
Sec.
7.
NEW
SECTION
.
522E.7
Rules.
21
The
commissioner
shall
adopt
rules
necessary
for
the
22
administration
of
this
chapter
pursuant
to
chapter
17A.
23
EXPLANATION
24
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
25
the
explanation’s
substance
by
the
members
of
the
general
assembly.
26
This
bill
creates
new
Code
chapter
522E
for
the
purpose
27
of
regulating
the
sale
of
portable
electronics
insurance,
28
including
requiring
licensure,
and
providing
for
fees
and
29
penalties.
30
New
Code
chapter
522E
defines
“portable
electronic
device”
31
as
an
electronic
device
that
is
personal,
self-contained,
32
easily
carried
by
an
individual,
battery
operated,
and
used
for
33
a
variety
of
specified
purposes,
and
accessories
or
services
34
related
to
such
a
device,
with
a
value
of
less
than
$1,000
at
35
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_____
the
time
of
purchase
or
lease.
“Portable
electronic
insurance”
1
is
insurance
providing
coverage
for
the
repair
or
replacement
2
of
a
portable
electronic
device.
Such
insurance
does
not
3
include
a
service
contract
or
extended
warranty.
4
The
bill
allows
the
commissioner
of
insurance
to
issue
a
5
limited
license
to
a
vendor
of
portable
electronic
devices
that
6
authorizes
the
vendor
to
offer
or
sell
portable
electronics
7
insurance
in
connection
with
and
incidental
to
the
sale
or
8
lease
of
a
portable
electronic
device
with
a
value
of
less
than
9
$1,000.
10
A
vendor
must
file
a
written
application
for
a
limited
11
license
to
sell
such
insurance
that
includes
a
list
of
all
12
locations
where
the
vendor
intends
to
conduct
business
and
13
a
list
of
all
vendor
employees
that
will
offer
or
sell
the
14
insurance.
Sale
of
portable
electronics
insurance
is
allowed
15
only
in
connection
with
and
incidental
to
the
sale
or
lease
of
16
a
portable
electronic
device.
A
customer
cannot
be
required
to
17
purchase
such
insurance
in
order
to
buy
a
portable
electronic
18
device.
19
If
the
bill’s
provisions
are
violated
by
a
limited
licensee,
20
the
commissioner
may,
after
notice
and
a
hearing,
revoke
21
or
suspend
the
limited
license,
or
impose
other
penalties,
22
including
suspension
of
authorization
to
sell
the
insurance
at
23
specific
vendor
locations
where
violations
have
occurred.
24
Portable
electronics
insurance
sold
pursuant
to
a
limited
25
license
must
include
specified
coverage
and
meet
specified
26
disclosure
requirements.
The
term
of
the
insurance
cannot
27
exceed
12
months
unless
the
customer
is
notified
prior
to
28
continuation
of
the
policy.
An
insurance
carrier
that
issues
29
portable
electronics
insurance
in
the
state
must
file
premium
30
and
loss
ratio
data
with
the
commissioner
each
year
and
31
maintain
a
minimum
loss
ratio
of
80
percent.
A
vendor
cannot
32
pay
a
fee,
compensation,
or
commission
to
a
vendor
employee
33
based
solely
on
the
sale
of
portable
electronics
insurance
by
34
the
employee.
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A
limited
license
issued
pursuant
to
the
bill’s
provisions
1
authorizes
a
vendor
employee
to
act
individually
on
behalf,
2
and
under
the
supervision,
of
the
limited
licensee,
to
offer
3
and
sell
portable
electronics
insurance
if
the
employee
also
4
obtains
an
individual
license.
In
order
to
obtain
a
license,
a
5
vendor
employee
must
successfully
complete
a
training
program
6
and
examination.
The
training
program
and
examination
must
be
7
approved
and
administered
by
the
commissioner
and
must
contain
8
instructions
on
the
types
of
portable
electronics
insurance
9
offered,
ethical
sales
practices,
and
required
disclosures
10
to
prospective
customers.
However,
the
commissioner
may
11
approve
a
qualified
vendor
to
perform
such
duties.
A
vendor
12
employee
must
file
an
application
with
the
commissioner
for
the
13
license
and
the
application
is
deemed
approved
if
not
denied
or
14
rejected
within
30
days
of
its
receipt.
15
A
limited
licensee
is
required
to
treat
moneys
collected
16
from
customers
purchasing
portable
electronics
insurance
as
17
moneys
received
in
a
fiduciary
capacity.
The
offer
or
sale
18
of
portable
electronics
insurance
not
in
conjunction
with
19
the
purchase
or
lease
of
a
portable
electronic
device
is
20
prohibited.
A
limited
licensee
is
prohibited
from
advertising,
21
representing,
or
holding
out
itself
or
any
of
its
employees
as
22
licensed
insurers,
insurance
producers,
or
insurance
brokers.
23
A
limited
licensee
is
prohibited
from
engaging
in
a
trade
24
practice
that
is
defined
in
Code
chapter
507B
as,
or
determined
25
pursuant
to
Code
section
507B.6
to
be,
an
unfair
method
of
26
competition
or
an
unfair
or
deceptive
act
or
practice
in
the
27
business
of
insurance,
or
an
illegal
sales
practice
or
unfair
28
trade
practice
as
defined
in
rules
adopted
by
the
commissioner
29
pursuant
to
Code
chapter
17A.
30
A
limited
licensee
is
prohibited
from
answering
technical
31
questions
about
the
portable
electronics
insurance
offered
or
32
evaluating
the
adequacy
of
a
prospective
customer’s
existing
33
insurance
coverage.
34
A
limited
license
is
valid
for
three
years
and
may
be
renewed
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_____
without
examination
if
application
is
timely
made.
The
fee
1
for
a
vendor
employee
individual
license
is
$50
per
vendor
2
employee
but
combined
fees
cannot
exceed
$1,000
in
any
calendar
3
year
for
one
vendor,
limited
license
or
licensee,
or
renewal
4
license.
The
license
fees
collected
are
to
be
deposited
in
the
5
department
of
commerce
revolving
fund
pursuant
to
Code
section
6
505.7.
7
The
commissioner
is
required
to
select
qualified
vendors
8
closest
in
proximity
to
where
a
vendor
employee
is
employed
to
9
meet
the
training
and
examination
requirements
for
the
employee
10
to
obtain
an
individual
license.
A
vendor
must
have
at
least
11
two
years
teaching
experience
relating
to
the
topics
of
the
12
products
described
in
the
new
Code
chapter
to
be
utilized
as
a
13
qualified
vendor.
14
The
commissioner
shall
adopt
rules
necessary
for
the
15
administration
of
the
new
Code
chapter
pursuant
to
Code
chapter
16
17A.
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