Bill Text: IN HB1172 | 2012 | Regular Session | Introduced
Bill Title: Portable electronics insurance.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2012-01-09 - First reading: referred to Committee on Insurance [HB1172 Detail]
Download: Indiana-2012-HB1172-Introduced.html
Citations Affected: IC 27-1-15.6; IC 27-1-15.9.
Synopsis: Portable electronics insurance. Specifies requirements
related to insurance covering portable electronic devices, including
limited lines producer licensing for vendors of the devices to sell,
solicit, or negotiate the insurance.
Effective: July 1, 2012.
January 9, 2012, read first time and referred to Committee on Insurance.
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in
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A BILL FOR AN ACT to amend the Indiana Code concerning
insurance.
(b) This chapter does not require an insurer to obtain an insurance producer license.
(c) The following are not required to be licensed as an insurance producer:
(1) An officer, director, or employee of an insurer or of an insurance producer, if the officer, director, or employee does not receive any commission on policies written or sold to insure risks that reside, are located, or are to be performed in Indiana, and if:
(A) the officer, director, or employee's activities are executive, administrative, managerial, clerical, or a combination of these, and are only indirectly related to the sale, solicitation, or negotiation of insurance;
(B) the officer, director, or employee's function relates to
underwriting, loss control, inspection, or the processing,
adjusting, investigating, or settling of a claim on a contract of
insurance; or
(C) the officer, director, or employee is acting in the capacity
of a special agent or agency supervisor assisting insurance
producers and the officer, director, or employee's activities are
limited to providing technical advice and assistance to
licensed insurance producers and do not include the sale,
solicitation, or negotiation of insurance.
(2) A person who secures and furnishes information for the
purpose of:
(A) group life insurance, group property and casualty
insurance, group annuities, or group or blanket accident and
sickness insurance;
(B) enrolling individuals under plans;
(C) issuing certificates under plans or otherwise assisting in
administering plans; or
(D) performing administrative services related to mass
marketed property and casualty insurance;
where no commission is paid to the person for the service.
(3) A person identified in clauses (A) through (C) who is not in
any manner compensated, directly or indirectly, by a company
issuing a contract, to the extent that the person is engaged in the
administration or operation of a program of employee benefits for
the employer's or association's employees, or for the employees of
a subsidiary or affiliate of the employer or association, that
involves the use of insurance issued by an insurer:
(A) An employer or association.
(B) An officer, director, or employee of an employer or
association.
(C) The trustees of an employee trust plan.
(4) An:
(A) employee of an insurer; or
(B) organization employed by insurers;
that is engaged in the inspection, rating, or classification of risks,
or in the supervision of the training of insurance producers, and
that is not individually engaged in the sale, solicitation, or
negotiation of insurance.
(5) A person whose activities in Indiana are limited to advertising,
without the intent to solicit insurance in Indiana, through
communications in printed publications or other forms of
electronic mass media whose distribution is not limited to
residents of Indiana, provided that the person does not sell, solicit,
or negotiate insurance that would insure risks residing, located, or
to be performed in Indiana.
(6) A person who is not a resident of Indiana and who sells,
solicits, or negotiates a contract of insurance for commercial
property and casualty risks to an insured with risks located in
more than one (1) state insured under that contract, provided that:
(A) the person is otherwise licensed as an insurance producer
to sell, solicit, or negotiate the insurance in the state where the
insured maintains its principal place of business; and
(B) the contract of insurance insures risks located in that state.
(7) A salaried full-time employee who counsels or advises the
employee's employer about the insurance interests of the
employer or of the subsidiaries or business affiliates of the
employer, provided that the employee does not sell or solicit
insurance or receive a commission.
(8) An officer, employee, or representative of a rental company
(as defined in IC 24-4-9-7) who negotiates or solicits insurance
incidental to and in connection with the rental of a motor vehicle.
(9) An individual who:
(A) furnishes only title insurance rate information at the
request of a consumer; and
(B) does not discuss the terms or conditions of a title insurance
policy.
(10) An employee or authorized representative of a vendor
that is licensed as a limited lines producer under this chapter
to sell, solicit, or negotiate portable electronics insurance
incidental to and in connection with portable electronics
transactions as described in IC 27-1-15.9.
(1) A person who is a ticket-selling producer of a common carrier and who will act only with reference to the issuance of insurance on personal effects carried as baggage, in connection with the transportation provided by such common carrier.
(2) A person who will only negotiate or solicit limited travel accident insurance in transportation terminals.
(3) A limited line credit insurance producer.
(4) A person who will only negotiate or solicit insurance under Class 2(j) of IC 27-1-5-1.
(5) Any person who will negotiate or solicit a kind of insurance that the commissioner finds does not require an examination to demonstrate professional competency.
(6) A person that will sell, solicit, or negotiate only portable electronics insurance as provided in IC 27-1-15.9.
Chapter 15.9. Portable Electronics Insurance
Sec. 1. The definitions in IC 27-1-15.6-2 apply throughout this chapter.
Sec. 2. As used in this chapter, "customer" means a person who purchases portable electronics.
Sec. 3. As used in this chapter, "insured customer" means a customer who purchases insurance under a portable electronics insurance policy that is issued to a vendor.
Sec. 4. As used in this chapter, "location" means:
(1) a geographic site in Indiana; or
(2) an Internet web site, a call center site, or a similar site;
that is intended to be used by Indiana residents to engage in portable electronics transactions.
Sec. 5. (a) As used in this chapter, "portable electronics" means electronic devices that are portable in nature.
(b) The term includes accessories, wireless services, and other services related to the use of a device described in subsection (a).
Sec. 6. (a) As used in this chapter, "portable electronics insurance" means insurance that provides coverage for the repair or replacement of portable electronics, including coverage for loss, theft, inoperability due to mechanical failure, malfunction, damage, or other similar causes of loss.
(b) The term does not include the following:
(1) A service contract or extended warranty that provides coverage for repair, replacement, or maintenance only to address operational or structural failure caused by:
(A) a defect in materials or workmanship;
(B) accidental damage from a power surge; or
(C) normal wear and tear.
(2) A policy of insurance that covers a seller's or manufacturer's obligations under a warranty.
(3) Any of the following:
(A) A homeowner's insurance policy.
(B) A renter's insurance policy.
(C) A private passenger automobile insurance policy.
(D) A commercial multi-peril insurance policy.
(E) An insurance policy that provides coverage similar to the insurance provided by a policy described in clauses (A) through (D).
Sec. 7. As used in this chapter, "portable electronics transaction" means the sale or lease of portable electronics.
Sec. 8. As used in this chapter, "supervising entity" means a business entity that:
(1) is an:
(A) insurer; or
(B) insurance producer;
that is licensed under this title; and
(2) issues, or is appointed by the insurer that issues, a portable electronics insurance policy that is sold, solicited, or negotiated by a vendor;
to supervise the activities of the vendor related to the portable electronics insurance policy.
Sec. 9. As used in this chapter, "vendor" means a business entity that directly or indirectly engages in portable electronics transactions.
Sec. 10. (a) A vendor shall not sell, solicit, or negotiate portable electronics insurance unless the vendor holds a limited lines license issued under IC 27-1-15.6 to sell, solicit, or negotiate portable electronics insurance.
(b) A limited lines license required by subsection (a) authorizes each of the following to sell, solicit, or negotiate portable electronics insurance to a customer at each of a vendor's locations:
(1) The vendor.
(2) Each of the vendor's employees or authorized representatives, regardless of whether the employee or authorized representative is individually licensed under IC 27-1-15.6, if the insurer that issues the portable electronics insurance directly supervises or appoints a supervising entity to supervise:
(A) the administration of the portable electronics insurance sold by the vendor; and
(B) a training program for the employees and authorized representatives.
(c) The following apply to a training program described in subsection (b):
(1) The training must be provided to any employee or
authorized representative who is directly engaged in the sale,
solicitation, or negotiation of portable electronics insurance.
(2) Initial training of an employee or authorized
representative:
(A) must be provided before the employee or authorized
representative engages in the sale, solicitation, or
negotiation of portable electronics insurance; and
(B) may be provided in electronic form.
(3) Continuing training of an employee or authorized
representative:
(A) must be provided on a periodic basis; and
(B) may be provided in electronic or another form.
(4) The training must be developed and overseen by
employees of the supervising entity who are licensed as
insurance producers under IC 27-1-15.6 with the
qualifications described in IC 27-1-15.6-7(a)(3) and
IC 27-1-15.6-7(a)(4).
(5) The training must provide basic instruction concerning
the:
(A) portable electronics insurance offered to customers of
the vendor; and
(B) disclosures required by section 12 of this chapter.
(d) An employee or authorized representative of a vendor shall
not advertise, represent, or otherwise profess to be an insurance
producer other than a limited lines producer licensed under
IC 27-1-15.6.
Sec. 11. (a) A supervising entity shall:
(1) maintain a registry of locations described in section 10(b)
of this chapter; and
(2) make the registry available for examination by the
commissioner during the supervising entity's regular business
hours.
(b) The commissioner shall, at least ten (10) days before the
examination is conducted, provide to a supervising entity written
notice of an examination described in subsection (a).
Sec. 12. (a) A vendor shall, at each location where portable
electronics insurance is sold, solicited, or negotiated, make
available to customers written materials concerning the portable
electronics insurance.
(b) The written materials available under subsection (a) must do
all the following:
(1) Disclose that portable electronics insurance may duplicate
coverage already provided under a customer's homeowner's
insurance policy, renter's insurance policy, or other coverage.
(2) State that the customer may purchase or lease portable
electronics regardless of whether the customer also purchases
portable electronics insurance.
(3) Summarize the material terms of each portable electronics
insurance policy under which insurance is available from the
vendor, including all the following:
(A) The identity of the insurer that issues the portable
electronics insurance policy.
(B) The identity of any supervising entity.
(C) The amount of any applicable deductible and the
manner by which the deductible is paid.
(D) The benefits of the portable electronics insurance.
(E) The key terms and conditions, including whether
portable electronics may be repaired or replaced with:
(i) reconditioned; or
(ii) nonoriginal;
manufacturer equipment of a make or model that is
similar to the portable electronics.
(4) Summarize the process for filing a claim, including:
(A) a description of the manner by which to return
portable electronics; and
(B) the maximum fee applicable if the customer fails to
comply with any applicable equipment return
requirement.
(5) State that an insured customer may cancel the portable
electronics insurance at any time and the person who pays the
premium will receive a refund of unearned premium.
Sec. 13. Portable electronics insurance may be sold:
(1) for any period; and
(2) under:
(A) an individual policy; or
(B) a group or master policy issued to a vendor to provide
insurance for the vendor's customers.
Sec. 14. The:
(1) insurer that issues a portable electronics insurance policy;
or
(2) supervising entity that supervises a vendor with respect to
a portable electronics insurance policy;
shall establish eligibility and underwriting standards for each
portable electronics insurance policy that is sold, solicited, or
negotiated by a vendor.
Sec. 15. The following apply to charges for portable electronics
insurance:
(1) The charges may be billed and collected by the vendor.
(2) If the insurance cost is not included in the cost associated
with the purchase or lease of portable electronics, the
insurance cost must be separately itemized on the insured
customer's bill.
(3) If the insurance cost is included in the cost associated with
the purchase or lease of portable electronics, the vendor shall
clearly and conspicuously disclose to the insured customer
that the portable electronics insurance cost is included with
the cost of the portable electronics.
(4) A vendor that bills and collects the charges shall maintain
collected funds in a segregated account unless the:
(A) insurer that issues the portable electronics insurance
policy authorizes the vendor to hold the funds in an
alternative manner; and
(B) vendor remits the funds to the supervising entity less
than sixty (60) days after the vendor receives the funds.
(5) All funds received by the vendor from an insured customer
for the sale of portable electronics insurance are considered
to be funds held in trust by the vendor in a fiduciary capacity
for the benefit of the insurer.
(6) A vendor may receive from an insurer compensation for
billing and collection services.
Sec 16. (a) This section supplements and does not limit the
actions that may be taken by the commissioner for a violation
under IC 27-1-15.6.
(b) If a vendor or an employee or authorized representative of
a vendor violates this chapter, the commissioner may do any of the
following:
(1) After notice and hearing, impose on the vendor a civil
penalty of not less than fifty dollars ($50) and not more than
ten thousand dollars ($10,000).
(2) After notice and hearing, impose other penalties that the
commissioner considers necessary and reasonable, including:
(A) suspending the privilege of transacting portable
electronics insurance under this chapter at specific
locations where violations have occurred; and
(B) suspending or revoking the ability of an individual
employee or authorized representative to act under the
vendor's limited lines producer license.
Sec. 17. (a) To the extent that this section conflicts with any
other provision of IC 27 that applies to an insurer, this section is
controlling.
(b) The following apply to an insurer that issues a portable
electronics insurance policy:
(1) Except as provided in subdivisions (3) and (4), an insurer
shall provide written notice to a vendor and an insured
customer at least thirty (30) days before terminating or
otherwise changing the terms and conditions of a portable
electronics insurance policy.
(2) An insurer that changes the terms and conditions as
described in subdivision (1) shall provide to the vendor and
insured customer:
(A) a revised policy, endorsement, or certificate;
(B) an updated brochure; or
(C) other evidence of the change;
including a summary of material changes.
(3) If an insurer discovers fraud or material
misrepresentation by an insured customer in:
(A) obtaining portable electronics insurance; or
(B) presenting a claim under the portable electronics
insurance;
the insurer may, not less than fifteen (15) days after providing
written notice to the insured customer, terminate the insured
customer's portable electronics insurance.
(4) An insurer may immediately terminate an insured
customer's portable electronics insurance for the following
reasons:
(A) Nonpayment of premiums.
(B) The insured customer no longer has active service with
the vendor.
(C) The:
(i) insured customer has exhausted any aggregate limit
of liability under the terms of the portable electronics
insurance policy; and
(ii) insurer has sent written notice of the termination to
the insured customer.
(5) If portable electronics insurance is terminated by a
vendor, the vendor shall, at least thirty (30) days before the
effective date of the termination, deliver written notice of the
termination, including notice of the effective date of the
termination, to each insured customer.
(6) Written notice required by this chapter may be delivered
as follows:
(A) By United States mail to:
(i) a vendor at the mailing address specified by the
vendor for delivery of written notice; and
(ii) an insured customer at the insured customer's last
known mailing address;
that is on file with the insurer.
(B) By electronic mail to:
(i) a vendor at the vendor's electronic mail address
specified by the vendor for delivery of written notice; or
(ii) an insured customer at the insured customer's last
known electronic mail address provided by the insured
customer to the insurer or vendor.
An insured customer's provision of an electronic mail address
to an insurer or a vendor is considered to be consent from the
insured customer to receive written notices by electronic mail.
An insurer and a vendor shall maintain proof that a written
notice sent by electronic mail was sent.
(7) A written notice required by this chapter that is delivered
by a supervising entity appointed by an insurer on behalf of
the insurer or vendor is considered to have been delivered by
the insurer or vendor.
Sec. 18. (a) A vendor shall apply for a limited lines producer
license required by this chapter by filing a sworn application for
the license with the commissioner on forms prescribed and
furnished by the commissioner.
(b) An application filed under subsection (a) must include the
following information:
(1) Except as provided in subdivision (2), the name, residence
address, and other information required by the commissioner
for an employee or officer of the vendor who is designated by
the vendor as the individual who is responsible for the
vendor's compliance with this chapter.
(2) If the vendor derives more than fifty percent (50%) of the
vendor's revenue from the sale of portable electronics
insurance, the name, residence address, and other information
required by the commissioner for each officer, director, and
shareholder of record that has beneficial ownership of at least
ten percent (10%) of any class of securities registered by the
vendor under federal securities law.
(3) The physical address of the vendor's home office.
(b) A vendor that sold, solicited, or negotiated portable electronics insurance on June 30, 2012, shall not sell, solicit, or negotiate portable electronics insurance after October 31, 2012, unless the vendor has, before November 1, 2012, obtained a limited lines license as required by IC 27-1-15.9, as added by this act.
(c) This SECTION expires January 1, 2014.
