Bill Text: IA SF487 | 2015-2016 | 86th General Assembly | Enrolled
Bill Title: A bill for an act regulating the sale of portable electronics insurance, including requiring licensure, providing for fees and penalties, and including effective date provisions. (Formerly SSB 1156 and SF 348.) Effective 1-1-16.
Spectrum: Committee Bill
Status: (Passed) 2015-05-01 - Signed by Governor. S.J. 962. [SF487 Detail]
Download: Iowa-2015-SF487-Enrolled.html
Senate File 487 - Enrolled
SENATE FILE
BY COMMITTEE ON WAYS AND
MEANS
(SUCCESSOR TO SF 348)
(SUCCESSOR TO SSB
1156)
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A BILL FOR
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Senate File 487
AN ACT
REGULATING THE SALE OF PORTABLE ELECTRONICS INSURANCE,
INCLUDING REQUIRING LICENSURE, PROVIDING FOR FEES AND
PENALTIES, AND INCLUDING EFFECTIVE DATE PROVISIONS.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
Section 1. NEW SECTION. 522E.1 Definitions.
As used in this chapter, unless the context otherwise
requires:
1. "Commissioner" means the commissioner of insurance.
2. "Consumer" means a person who purchases portable
electronics in a retail transaction.
3. "Endorsee" means an unlicensed employee or authorized
representative of a licensed portable electronics vendor.
4. "Enrollment" means the process of soliciting or accepting
enrollments or applications from a consumer under a portable
electronics insurance policy, which includes informing the
consumer of the availability of coverage, preparing and
delivery of the certificate of insurance or notice of proposed
insurance, or otherwise assisting the consumer in making an
informed decision whether or not to elect to purchase portable
electronics insurance.
5. "Free=trial offer" means an offer to a consumer under
which portable electronics insurance is provided free of charge
for a limited time period subsequent to which a charge is made
to the consumer for the insurance.
6. a. "License period" means all of that three=year period
beginning as described in paragraph "b", subparagraph (1) or
(2), as applicable, and ending the second succeeding year on
the last calendar day of the month in which the initial license
was issued.
b. A license period shall be determined for each person as
follows:
(1) Upon initial licensing, the license period shall start
on the date the license is issued.
(2) For a subsequent license, the license period shall
start on the first day following the month in which the initial
license was issued.
c. A license shall be renewed on or before the expiration
date of the license period.
7. a. "Portable electronics" means any of the following
devices:
(1) Personal, self=contained, easily carried by an
individual, battery=operated electronic communication, viewing,
listening, recording, gaming, computing, or global positioning
devices, including cell or satellite phones, pagers, personal
global positioning satellite units, portable computers,
portable audio listening, video viewing or recording devices,
digital cameras, video camcorders, portable gaming systems,
docking stations, and automatic answering devices, including
their accessories and service related to the use of the
devices.
(2) Any other electronic device that is portable in nature
that the commissioner approves.
b. "Portable electronics" does not include
telecommunications switching equipment, transmission
wires, cell site transceiver equipment, or other equipment
and systems used by telecommunications companies to provide
telecommunications service to consumers.
8. a. "Portable electronics insurance" means a contract
providing coverage for the repair or replacement of portable
electronics against any one or more of the following causes of
loss: loss, theft, mechanical failure, malfunction, damage, or
other applicable perils.
b. "Portable electronics insurance" does not include any of
the following:
(1) A service contract or extended warranty providing
coverage limited to the repair, replacement, or maintenance of
property for the operational or structural failure of property
due to a defect in materials, workmanship, accidental damage
from handling, power surges, or normal wear and tear.
(2) A policy of insurance covering a seller's or a
manufacturer's obligations under a warranty.
(3) A homeowner's, renter's, private passenger automobile,
commercial multiperil, or similar policy.
9. "Portable electronics insurance license" means a document
issued by the commissioner pursuant to this chapter authorizing
a portable electronics vendor to offer or sell portable
electronics insurance in this state.
10. "Portable electronics vendor" means any person in the
business, directly or indirectly, of selling, reselling,
soliciting, or leasing portable electronics, their accessories,
and related services to consumers.
Sec. 2. NEW SECTION. 522E.2 Licensure required.
A person shall not offer or sell any form of portable
electronics insurance in this state unless the person is
licensed as an insurance producer pursuant to chapter 522B,
is issued a portable electronics insurance license pursuant
to this chapter, or is an endorsee who is in compliance with
section 522E.6.
Sec. 3. NEW SECTION. 522E.3 Portable electronics insurance
license.
A portable electronics vendor that applies for a license
and complies with the requirements of this chapter shall
be issued a portable electronics insurance license by the
commissioner that authorizes the licensee and the licensee's
endorsees to offer or sell portable electronics insurance to
a consumer in connection with, and incidental to, the sale of
portable electronics or the sale and provision of accessories
or services related to the use of portable electronics.
Sec. 4. NEW SECTION. 522E.4 Application and fees.
1. A portable electronics vendor applying for a portable
electronics insurance license under this chapter shall submit
all of the following to the commissioner:
a. A written application for licensure, signed by the
applicant or an officer of the applicant, in the form
prescribed by the commissioner.
b. A certificate by the insurer that is to be named in
the portable electronics insurance license, stating that the
insurer is satisfied that the named applicant is trustworthy
and competent to act as a portable electronics insurance
licensee limited to this purpose and that the insurer will
appoint the applicant to act as its agent to transact the kind
or kinds of insurance that are permitted by this chapter if the
portable electronics insurance license applied for is issued by
the commissioner. The certification shall be subscribed by an
officer or managing agent of the insurer on a form prescribed
by the commissioner.
c. An application fee of the lesser of fifty dollars per
each endorsee at a location of the vendor or five hundred
dollars per location valid for a three=year period and, for
each three=year period thereafter, a renewal fee in the same
amount. A maximum fee of five thousand dollars shall apply
for licensure of a portable electronics vendor with multiple
locations. The fees collected shall be deposited as provided
in section 505.7.
2. Costs associated with any enforcement action against or
investigation of a portable electronics vendor licensed under
this chapter shall be paid for by the portable electronics
vendor.
Sec. 5. NEW SECTION. 522E.5 License renewal.
1. Not less than sixty days before a portable electronics
insurance license will expire, the commissioner may use an
electronic delivery method, including electronic mail or other
similar electronic method of delivery, to deliver, or may mail,
to the latest electronic mail or mailing address appearing in
the commissioner's records, an application to the licensee
to renew a portable electronics insurance license for the
appropriate succeeding license term. It is the licensee's
responsibility to renew the license, whether or not a renewal
notice is received.
2. The commissioner may accept a late renewal without
penalty, provided that the licensee's failure to comply is due
to a clerical error or inadvertence.
3. An application for renewal of a portable electronics
insurance license may be filed on or before the expiration
date of the license. An application for renewal of an expired
license may be filed after the expiration date and until that
same month and date of the next succeeding year.
4. The commissioner shall impose a penalty fee equal to
one=half of the renewal fee for the portable electronics
insurance license for any application for renewal that is filed
after the expiration date of the license.
Sec. 6. NEW SECTION. 522E.6 Endorsee requirements.
An endorsee of a portable electronics vendor that has been
issued a portable electronics insurance license pursuant to
this chapter may sell or offer insurance products under the
authority of the vendor's portable electronics insurance
license if all of the following conditions have been met:
1. The endorsee is eighteen years of age or older.
2. The portable electronics vendor, at the time of
submission of an application for a portable electronics
insurance license pursuant to section 522E.4, includes a list
of all locations in this state at which the vendor intends
to offer coverage under a policy of portable electronics
insurance. The list shall be maintained by the portable
electronics vendor in a form prescribed by, or format
acceptable to, the commissioner, shall be updated annually,
and shall be made available to the commissioner for review and
inspection upon request.
3. The portable electronics vendor provides for the
training of its endorsees under a program developed by a
licensed property and casualty insurance producer prior to
allowing its endorsees to offer or sell portable electronics
insurance. The training shall meet the following minimum
standards:
a. Each endorsee shall receive instruction about the
applicable kinds or types of portable electronics insurance
authorized for sale to prospective consumers in this state as
provided in section 522E.9, subsection 5.
b. Each endorsee shall receive training about ethical sales
practices.
c. Each endorsee shall receive training about the
disclosures to be given to prospective consumers pursuant to
section 522E.9.
d. The retraining of endorsees shall be conducted whenever
there is a material change in the insurance products sold that
requires modification of the training materials, but in no
event less frequently than every three years for each endorsee.
e. The portable electronics vendor shall maintain a list
of its endorsees who have completed the required training, and
make the list available to the commissioner upon request.
Sec. 7. NEW SECTION. 522E.7 Endorsee conduct.
An endorsee may act on behalf of and under the supervision of
a licensed portable electronics vendor in matters relating to
transacting portable electronics insurance under that vendor's
license. The conduct of an endorsee acting within the scope of
the endorsee's employment or agency shall be deemed the conduct
of the licensed portable electronics vendor for purposes of
this chapter.
Sec. 8. NEW SECTION. 522E.8 Violations and penalties.
1. If a licensed portable electronics vendor or endorsee
violates any provision of this chapter or any other provision
of this title, the commissioner may do any of the following:
a. After notice and hearing, suspend or revoke the license
of the portable electronics vendor.
b. After notice and hearing, impose penalties on the
portable electronics vendor for its conduct or that of its
endorsees.
c. After notice and hearing, impose other penalties that the
commissioner deems necessary and convenient to carry out the
purposes of this chapter, including suspending the privilege
of transacting portable electronics insurance pursuant to
this chapter at specific business locations of the portable
electronics vendor where violations have occurred, imposing
penalties on the portable electronics vendor, and suspending or
revoking the ability of individual endorsees to act under the
vendor's license.
2. If any person sells insurance in connection with, or
incidental to, the sale of portable electronics or the sale
or provision of accessories or services related thereto, or
holds oneself or an organization out as a licensed portable
electronics vendor without obtaining the license required
by this chapter, or as being an insurance producer licensed
pursuant to chapter 522B without obtaining that license, the
commissioner may issue a cease and desist order.
Sec. 9. NEW SECTION. 522E.9 Requirements at time of sale.
A licensed portable electronics vendor shall not sell
portable electronics insurance pursuant to this chapter unless,
at the time of sale, or reasonably thereafter with respect to a
sale or enrollment occurring by telephone, all of the following
conditions are satisfied:
1. The portable electronics vendor provides brochures or
other written materials to the prospective consumer that do all
of the following:
a. Summarize the material terms and conditions of coverage
offered, including the identity of the insurer.
b. Describe the process for filing a claim, including a
toll=free telephone number to report a claim.
c. Disclose any additional information on the price,
benefits, exclusions, conditions, or other limitations of those
policies that the commissioner may, by rule, prescribe.
d. Provide the name, address, telephone number, and license
number of the portable electronics vendor or the property
and casualty insurance broker=agent appointed by the insurer
issuing portable electronics insurance coverage to the portable
electronics vendor.
2. The portable electronics vendor or its endorsees
make all of the following disclosures, which shall either
be acknowledged in writing by the consumer, be provided in
writing to the consumer, or, for sales made in person, shall
be displayed by clear and conspicuous signs that are posted at
every location where portable electronics insurance contracts
are executed, such as the counter where the consumer signs the
portable electronics insurance contract:
a. That the purchase by the consumer of the kinds of
insurance prescribed in this chapter is not required in order
to purchase portable electronics, accessories, or related
services.
b. That the insurance policies offered by the portable
electronics vendor may provide a duplication of coverage
already provided by other insurance policies covering the
consumer.
c. That the vendor or endorsee of the portable electronics
vendor is not qualified or authorized to evaluate the adequacy
of the consumer's existing insurance coverages, unless that
person is licensed pursuant to chapter 522B.
d. That the consumer may cancel the insurance at any time.
If the consumer cancels, any unearned premium will be refunded
in accordance with applicable law.
3. The material terms and conditions of coverage are
provided to every person who elects to purchase the coverage.
4. Costs for the insurance are separately itemized in any
billing statement for the insurance. However, if the portable
electronics insurance is included with the purchase or lease
of portable electronics and accessories or related services,
the portable electronics vendor shall clearly and conspicuously
disclose to the consumer that the insurance coverage is
included with the purchase of the portable electronics or
related services and shall disclose the stand=alone cost of
the premium for the same or similar insurance, if any, on the
consumer's bill and in any marketing materials made available
at the point of sale.
5. The portable electronics insurance is provided under
an individual policy issued to the consumer, or under a group
or master policy issued to an organization through a licensed
insurance producer or through a licensed portable electronics
vendor by an insurer authorized to transact the applicable
kinds or types of insurance in this state.
6. Portable electronics insurance shall not be sold through
a free=trial offer.
Sec. 10. NEW SECTION. 522E.10 Charges and collection of
moneys.
1. Charges for portable electronics insurance may be billed
and collected by a licensed portable electronics vendor. A
licensed vendor shall not be required to maintain those moneys
in a segregated account if the insurer represented by the
vendor has provided in writing that the moneys need not be
segregated from moneys received by the portable electronics
vendor on account of the sale or lease of portable electronics
or related services or accessories.
2. All moneys received by a licensed portable electronics
vendor from a consumer for the sale of portable electronics
insurance shall be considered moneys held in trust by the
portable electronics vendor in a fiduciary capacity for the
benefit of the insurer. A licensed portable electronics vendor
may receive compensation for billing and collection services.
Sec. 11. NEW SECTION. 522E.11 Other restrictions.
1. Under the authority of a portable electronics insurance
license, a portable electronics vendor shall not do any of the
following:
a. Offer to sell insurance except in conjunction with, and
incidental to, the business of selling portable electronics,
their accessories, or related services.
b. Advertise, represent, or otherwise portray itself or
its endorsees as licensed insurers or property and casualty
insurance broker=agents.
c. Pay an endorsee compensation based primarily on the
number of consumers electing coverage under the portable
electronics vendor's license. However, this chapter does
not prohibit the payment of compensation to an endorsee
of a portable electronics vendor for activities under the
vendor's license that is incidental to the endorsee's overall
compensation. The incidental compensation shall not exceed
fifteen dollars per transaction for portable electronics
insurance coverage.
2. Unless lawfully transacting the business of insurance
pursuant to a certificate of authority issued for the
appropriate class of insurance, a person obligated to perform
under a contract offered in or from this state that meets the
definition of portable electronics insurance shall be deemed to
be unlawfully transacting the business of insurance.
Sec. 12. NEW SECTION. 522E.12 Policy forms.
An insurer that provides insurance to be sold by a licensed
portable electronics vendor shall file a copy of the policy
form issued to a consumer, or of any policy or certificate
issued under a group or master policy to an organization
through an insurance producer licensed under chapter 522B
or through a licensed portable electronics vendor, with the
commissioner, who shall make the policy form available to the
public.
Sec. 13. NEW SECTION. 522E.13 Portable electronics
insurance policy changes.
1. An insurer may terminate a portable electronics
insurance policy or otherwise change the terms and conditions
of a portable electronics insurance policy only upon
providing the licensed portable electronics vendor that is
the policyholder and enrolled consumers with at least thirty
calendar days' written notice.
2. If the insurer changes the terms and conditions of a
policy of portable electronics insurance, the insurer shall
provide the licensed portable electronics vendor that is the
policyholder with a revised policy or endorsement and each
enrolled consumer with a revised certificate, endorsement,
updated brochure, or other evidence indicating that a change
in the terms and conditions of the policy has occurred and a
summary of those changes.
3. Notwithstanding subsection 1, an insurer may terminate
an enrolled consumer's enrollment under a portable electronics
insurance policy upon fifteen calendar days' notice for
discovery of fraud or material misrepresentation in obtaining
coverage or in the presentation of a claim under the policy.
4. Notwithstanding subsection 1, an insurer may immediately
terminate an enrolled consumer's enrollment under a portable
electronics insurance policy without prior notice for any of
the following reasons:
a. Nonpayment of premium.
b. If the enrolled consumer ceases to have an active service
with the licensed portable electronics vendor that is the
policyholder.
c. If the enrolled consumer exhausts the aggregate limit of
liability, if any, under the terms of the portable electronics
insurance policy and the insurer sends notice of termination
to the enrolled consumer within thirty calendar days after
exhaustion of the limit. However, if notice is not sent within
thirty calendar days, enrollment shall continue notwithstanding
the aggregate limit of liability until thirty calendar days
from the date the insurer sends notice of termination to the
enrolled consumer.
5. If a portable electronics insurance policy is terminated
by the licensed portable electronics vendor that is the
policyholder, the portable electronics vendor shall mail or
deliver a written notice to each enrolled consumer advising
the enrolled consumer of the termination of the policy and the
effective date of termination. The written notice shall be
mailed or delivered by the portable electronics vendor to the
enrolled consumer at least thirty calendar days prior to the
termination. However, if the notice is not sent within thirty
calendar days, enrollment shall continue until thirty calendar
days from the date the portable electronics vendor sends notice
of termination to the enrolled consumer or until a new portable
electronics insurance policy is in effect.
6. Whenever notice or correspondence with respect to a
policy of portable electronics insurance is required pursuant
to this section, it shall be in writing and sent within the
notice period required pursuant to this section. Notices
and correspondence shall be sent to the licensed portable
electronics vendor that is the policyholder at the portable
electronics vendor's mailing address specified for that purpose
and to its affected enrolled consumers' last known mailing
addresses on file with the insurer or the portable electronics
vendor. The insurer or portable electronics vendor shall
maintain proof that the notice or correspondence was sent for
not less than three years after that notice or correspondence
was sent.
Sec. 14. NEW SECTION. 522E.14 Rules.
The commissioner may adopt rules pursuant to chapter 17A to
implement and administer this chapter.
Sec. 15. NEW SECTION. 522E.15 Other law.
Nothing in this chapter regulating the sale of portable
electronics insurance shall be construed to impair or impede
the application of any other law regulating the sale of
portable electronics insurance.
Sec. 16. EFFECTIVE DATE. This Act takes effect January 1,
2016.
PAM JOCHUM
President of the Senate
KRAIG PAULSEN
Speaker of the House
I hereby certify that this bill originated in the Senate and
is known as Senate File 487, Eighty=sixth General Assembly.
MICHAEL E. MARSHALL
Secretary of the Senate
Approved , 2015
TERRY E. BRANSTAD
Governor
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