Bill Text: NY A06872 | 2019-2020 | General Assembly | Introduced
Bill Title: Relates to wireless communications equipment insurance for wireless communications equipment vendors; describes prerequisites for issuance of a limited license for wireless communications equipment vendors.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2020-01-08 - referred to insurance [A06872 Detail]
Download: New_York-2019-A06872-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 6872 2019-2020 Regular Sessions IN ASSEMBLY March 25, 2019 ___________ Introduced by M. of A. COOK -- read once and referred to the Committee on Insurance AN ACT to amend the insurance law, in relation to wireless communi- cations equipment insurance The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Section 2101 of the insurance law is amended by adding a 2 new subsection (z) to read as follows: 3 (z) For purposes of section two thousand one hundred thirty-one of 4 this article, with respect to wireless communications equipment insur- 5 ance: 6 (1) "Customer" means a person who purchases wireless communications 7 equipment or service; 8 (2) "Enrolled customer" means a customer who elects coverage under a 9 wireless communications equipment insurance policy issued to a vendor of 10 wireless communications equipment; 11 (3) "Location" means any physical location in the state of New York or 12 any website, call center site or similar location directed to residents 13 of the state of New York; 14 (4) "Wireless communications equipment" shall mean electronic devices 15 that are portable in nature and their accessories; 16 (5)(A) "Wireless communications equipment insurance" means insurance 17 providing coverage for the repair or replacement of wireless communi- 18 cations equipment which may provide coverage for wireless communications 19 equipment against any one or more of the following causes of loss: loss, 20 theft, inoperability due to mechanical failure, malfunction, damage or 21 other similar causes of loss. 22 (B) "Wireless communications equipment insurance" does not include: 23 (i) A service contract as that term is defined by article seventy-nine 24 of this chapter; EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD08054-01-9A. 6872 2 1 (ii) A policy of insurance covering a seller's or a manufacturer's 2 obligations under a warranty; or 3 (iii) A homeowners', renters', private passenger automobile, commer- 4 cial multi-peril, or similar policy. 5 (6) "Wireless communications equipment transaction" means: 6 (A) The sale or lease of wireless communications equipment by a vendor 7 to a customer; or 8 (B) The sale of a service related to the use of wireless communi- 9 cations equipment by a vendor to a customer. 10 (7) "Supervising entity" means a business entity that is a licensed 11 insurer or insurance producer that is authorized by an insurer to super- 12 vise the administration of a wireless communications equipment insurance 13 program. 14 (8) "Vendor" means a person in the business of engaging in wireless 15 communications equipment transactions directly or indirectly. 16 (9) "Wireless communications service" means telephonic and/or data 17 transmission service over a wireless network through wireless communi- 18 cations equipment. 19 § 2. Section 2131 of the insurance law, as amended by chapter 582 of 20 the laws of 2003, the section heading and subsections (a), (d), (e), 21 (f), (h) and (i) as amended by chapter 368 of the laws of 2010, and 22 subsection (g) as amended by chapter 426 of the laws of 2005, is amended 23 to read as follows: 24 § 2131. Limited license for rental vehicle companies, wireless commu- 25 nications equipment vendors and self-service storage companies. (a) The 26 superintendent may issue to a rental vehicle company, a wireless commu- 27 nications equipment vendor, a self-service storage company or to a fran- 28 chisee of a rental vehicle company, [a wireless communications equipment29vendor,] or a self-service storage company which has complied with the 30 requirements of this section, a limited license authorizing the licen- 31 see, known as a "limited licensee" for the purpose of this article, to 32 act as agent, with reference to the kinds of insurance specified in this 33 section, of any insurer authorized to write such kinds of insurance in 34 this state. 35 (b) [The] Except as contained in paragraph three of this subsection 36 regarding wireless communications equipment vendors, the prerequisites 37 for issuance of a limited license under this section shall be the filing 38 with the superintendent of the following: 39 (1) an application, signed by an officer of the applicant, for the 40 limited license in such form or forms, and supplements thereto, and 41 containing such information, as the superintendent may prescribe; [and] 42 (2) an appointment of a limited licensee by the appointing insurer, in 43 a format approved by the superintendent, no more than fifteen days after 44 the date the agency contract is executed or the first insurance contract 45 is submitted, whichever is later, stating that it has satisfied itself 46 that the named applicant is trustworthy and competent to act as its 47 insurance agent for this limited purpose and that the insurer will 48 appoint such applicant to act as the agent in reference to the doing of 49 such kind or kinds of insurance which are permitted by this section, if 50 the limited license applied for is issued by the superintendent. Such 51 appointment shall be subscribed by an officer or managing agent of such 52 insurer and affirmed as true under the penalties of perjury; 53 (3) the prerequisites for issuance of a limited license under this 54 section for a wireless communications equipment vendor shall be the 55 filing of a sworn application with the superintendent on forms 56 prescribed and furnished by the superintendent which shall:A. 6872 3 1 (A) provide the name, residence address, and other information 2 required by the superintendent for an employee or officer of the vendor 3 that is designated by the applicant as the person responsible for the 4 vendor's compliance with the requirements of this chapter. However, if 5 the vendor derives more than fifty percent of its revenue from the sale 6 of wireless communications equipment insurance the information noted 7 above shall be provided for all officers, directors, and shareholders of 8 record having beneficial ownership of ten percent or more of any class 9 of securities registered under the federal securities law; and 10 (B) the location of the applicant's home office; and 11 (4) any vendor engaging in wireless communications equipment insurance 12 transactions must obtain a license prior to offering wireless communi- 13 cations equipment insurance. 14 (c) In the event that any provision of this chapter is violated, the 15 superintendent may: 16 (1) revoke or suspend a limited license issued under this section in 17 accordance with the provisions of section two thousand one hundred ten 18 of this article; or 19 (2) after notice and hearing impose such other penalties, including 20 suspending the transaction of insurance at specific locations where 21 violations of this article have occurred, as the superintendent deems 22 necessary or convenient to carry out the purposes of this section. 23 (d) The rental vehicle company, wireless communications equipment 24 vendor, or self-service storage company, or franchisee licensed pursuant 25 to subsection (a) of this section may act as agent for an authorized 26 insurer only in connection with the rental of motor vehicles, the sale 27 or offering for sale of wireless communications equipment, or the rental 28 of storage space, respectively, and only with respect to the following 29 kinds of insurance: 30 (1) with respect to rental vehicle companies: 31 (A) excess liability insurance that provides coverage to the rental 32 car company or franchisee and renters and other authorized drivers of 33 rental vehicles, in excess of the standard liability limits provided by 34 the rental vehicle company in its rental agreement, for liability aris- 35 ing from the negligent operation of the rental vehicle; 36 (B) accident and health insurance that provides coverage to renters 37 and other vehicle occupants, in excess to the standard first party bene- 38 fits provided pursuant to article fifty-one of this chapter, for acci- 39 dental death and/or dismemberment and for medical expenses resulting 40 from an accident that occurs during the rental period; 41 (C) personal effects insurance that provides coverage to renters and 42 other vehicle occupants for the loss of, or damage to, personal effects 43 that occurs during the rental period; 44 (D) any other coverage which the superintendent may approve as mean- 45 ingful and appropriate in connection with the rental of motor vehicles; 46 or 47 (2) with respect to wireless communications equipment vendors, [insur-48ance issued to cover the loss, theft, mechanical failure, or malfunction49of, or damage to, wireless communications equipment offered] wireless 50 communications equipment insurance as either an individual policy issued 51 to the consumer or as a group or master commercial inland marine policy 52 under which certificates or other evidence of coverage are issued to 53 individual consumers who enroll in the program[, provided however, that54said insurance shall not extend to wireless services or service55contracts governed by article seventy-nine of this chapter]; orA. 6872 4 1 (3) with respect to self-service storage companies, the following 2 coverages offered as either an individual policy issued to the consumer 3 or as a group policy: 4 (A) personal effects insurance that provides coverage to renters of 5 storage spaces at the self-service storage company's facility for the 6 loss of, or damage to, personal property stored at the facility, where 7 the loss or damage occurs at the same facility during the rental period; 8 (B) any other coverage that the superintendent may approve as meaning- 9 ful and appropriate in connection with the rental of storage space. 10 (e) No insurance may be issued pursuant to this section unless: 11 (1) with regard to the rental of vehicles only, the rental period of 12 the rental agreement does not exceed thirty consecutive days; and 13 (2) at every location where rental vehicle agreements, wireless commu- 14 nications equipment agreements, or self-service storage agreements are 15 executed, brochures or other written materials are readily available to 16 the prospective consumer that: 17 (A) summarize, clearly and correctly, the material terms of insurance 18 coverage, including the identity of the insurer and, with regard to 19 wireless communications equipment insurance, the agent licensed under 20 subsection (b) of section two thousand one hundred three of this 21 article, the identity of the supervising entity, the amount of any 22 applicable deductible and how it is to be paid, benefits of the cover- 23 age, and key terms and conditions of coverage such as whether wireless 24 communications equipment may be repaired or replaced with similar make 25 and model reconditioned or non-original manufacturer parts or equipment; 26 (B) disclose that these policies may provide a duplication of coverage 27 already provided by a renter's personal automobile insurance policy, 28 homeowner's insurance policy, personal liability insurance policy, or 29 other source of coverage; 30 (C) state that the purchase by the consumer of the kinds of insurance 31 specified in this section is not required in order to rent a vehicle, to 32 purchase or lease wireless communications equipment, or to rent storage 33 space; 34 (D) describe the process for filing a claim in the event the consumer 35 elects to purchase coverage, and with regard to wireless communications 36 equipment insurance, describe how to return wireless communications 37 equipment and the maximum fee or fees applicable in the event the 38 customer fails to comply with any equipment return requirements; 39 (E) the price, deductible, benefits, exclusions and conditions or 40 other limitations of such policies; 41 (F) disclose that the employee of the rental vehicle company, wireless 42 communications equipment vendor or self-storage company is not qualified 43 or authorized to evaluate the adequacy of the purchaser's existing 44 coverages, unless otherwise licensed; [and] 45 (G) notwithstanding any law, rule or regulation a wireless communi- 46 cations equipment insurance vendor shall state whether an employee may 47 earn compensation under the vendor's limited lines license as allowed 48 under subsection (g) of this section and that part of the premium paid 49 by the purchaser may be paid by the vendor to an administrator; and 50 (H) state that the customer may cancel the insurance at any time and 51 any unearned premium will be refunded in accordance with applicable law. 52 (3) with respect to wireless communications equipment insurance, the 53 written materials required by paragraph two of this subsection shall not 54 be subject to filing or approval requirements with the superintendent 55 pursuant to subsection (f) of this section.A. 6872 5 1 (4) evidence of coverage is provided to every consumer who elects to 2 purchase such coverage. 3 (f) Rates and forms for insurance under this section shall be subject 4 to article twenty-three of this chapter. Any brochures used in 5 connection with insurance under this section shall be filed with the 6 superintendent for review and shall include disclosure of the claims 7 filing process, premium, deductible amounts and limits and shall be 8 prominently displayed in the brochure with at least twelve-point type 9 bold headings. Any such brochures shall also be subject to section 10 three thousand one hundred two of this chapter, provided, however, that 11 any policy, certificate or other evidence of insurance coverage, whether 12 or not contained in such brochure, shall not be subject to section three 13 thousand one hundred two of this chapter, but shall be written in a 14 clear and coherent manner and whenever practicable shall use words with 15 common and everyday meaning to facilitate readability and to aid the 16 policyholder in understanding the coverage provided. 17 (g) Any limited license issued under this section shall also authorize 18 any salaried employee or any sales representative authorized by the 19 licensee who, pursuant to subsection (h) of this section, is trained to 20 act individually on behalf, and under the supervision, of the licensee 21 with respect to the kinds of insurance specified in this section. 22 Notwithstanding any other provision of law, employees or authorized 23 representatives of a vendor of wireless communications equipment shall 24 not be compensated based on the number of customers enrolled for wire- 25 less communications equipment insurance coverage but may be eligible to 26 receive compensation for activities under the limited lines license 27 which is incidental to their overall compensation. 28 (h) Each company or franchisee licensed pursuant to this section shall 29 conduct a training program, which shall be submitted to the superinten- 30 dent for approval prior to use, and which shall meet the following mini- 31 mum standards: 32 (1) each trainee shall receive basic instruction about the kinds of 33 insurance specified in this section offered for purchase by prospective 34 renters of rental vehicles, purchasers or lessors of wireless communi- 35 cations equipment, or renters of storage space; 36 (2) each trainee shall be instructed with respect to the disclosures 37 required under subsection (e) of this section and to acknowledge to a 38 prospective renter of a rental vehicle, purchaser or lessor of wireless 39 communications equipment, or renter of storage space that purchase of 40 any such insurance specified in this section is not required in order 41 for the consumer to rent a motor vehicle, purchase or lease wireless 42 communications equipment, or rent storage space; 43 (3) each trainee shall be instructed to acknowledge to a prospective 44 consumer of the kinds of insurance specified in this section that the 45 consumer may have insurance policies that already provide the coverage 46 being offered by the rental vehicle company, the wireless communications 47 equipment vendor, or self-service storage company pursuant to this 48 section; and 49 (4) with regard to wireless communications equipment insurance and 50 self-service storage company insurance, training materials may be devel- 51 oped and provided by an agent licensed pursuant to subsection (b) of 52 section two thousand one hundred three of this article. 53 (i) Limited licensees acting pursuant to and under the authority of 54 this section shall comply with all applicable provisions of this arti- 55 cle, except that notwithstanding section two thousand one hundred twenty 56 of this article, a limited licensee pursuant to this section shall notA. 6872 6 1 be required to treat premiums collected from consumers [purchasing such2insurance when renting motor vehicles, purchasing or leasing wireless3communications equipment,] or renting storage space as funds received in 4 a fiduciary capacity, provided that: 5 (1) the insurer represented by the limited licensee has consented in 6 writing, signed by the insurer's officer, that premiums need not be 7 segregated from funds received by the rental vehicle company, [wireless8communications equipment vendor,] or self-storage company on account of 9 vehicle rental, [wireless communications equipment purchase or lease,] 10 or storage space rental; [and] 11 (2) the charges for insurance coverage are itemized but not billed to 12 the consumer separately from the charges for rental vehicles, [purchase13or lease of wireless communications equipment,] or storage space rental; 14 and 15 (3) with respect to wireless communications equipment insurance premi- 16 ums, vendors billing and collecting such charges shall not be required 17 to maintain such funds in a segregated account provided that the vendor 18 is authorized by the insurer to hold such funds in an alternative manner 19 and remits such amounts to the supervising entity within sixty days of 20 receipt. All funds received by a vendor from an enrolled customer for 21 the sale of wireless communications equipment insurance shall be consid- 22 ered funds held in trust by the vendor in a fiduciary capacity for the 23 benefit of the insurer. Any charge to the enrolled customer for coverage 24 that is not included in the cost associated with the purchase or lease 25 of wireless communications equipment or related services shall be sepa- 26 rately itemized on the enrolled customer's bill. If the insurance cover- 27 age is included with the purchase or lease of wireless communications 28 equipment or related services the vendor shall clearly and conspicuously 29 disclose to the enrolled customer that the coverage is included with the 30 wireless communications equipment or related services. Vendors may 31 receive compensation for billing and collection services. 32 (j) No limited licensees under this section shall advertise, represent 33 or otherwise hold itself or any of its employees themselves out as 34 licensed insurance agents or brokers. 35 (k) The superintendent may issue a replacement for a currently in 36 force license which has been lost or destroyed. Before such replacement 37 license shall be issued, there shall be on file in the office of the 38 superintendent a written application for such replacement license, 39 affirming under penalty of perjury that the original license has been 40 lost or destroyed, together with a fee of fifteen dollars. 41 (l) [For purposes of this section "wireless communications equipment"42shall mean wireless handsets, pagers, personal digital assistants, wire-43less telephones or wireless telephone batteries and other wireless44devices and accessories related to such devices that are used to access45wireless communications services and includes wireless services] 46 Notwithstanding any law, rule, or regulation to the contrary, with 47 respect to wireless communications equipment insurance, the only disclo- 48 sures and materials required in the provision of such insurance shall be 49 the items required by this section. 50 § 3. Section 3449 of the insurance law, as added by chapter 426 of the 51 laws of 2005, is amended to read as follows: 52 § 3449. Wireless communications equipment insurance policies. (a) In 53 this section, the term "policy of wireless communications equipment 54 insurance" means an insurance policy covering the kind of insurance 55 described in subsection [(1)] (z) of section two thousand one hundred 56 [thirty-one] one of this chapter.A. 6872 7 1 (b) (1) A group policy, and certificates issued thereunder, of wire- 2 less communications equipment insurance shall not be subject to the 3 provisions of section three thousand four hundred twenty-five or three 4 thousand four hundred twenty-six of this article. 5 (2) An insurer shall not terminate or otherwise change the terms and 6 conditions of a group policy of wireless communications equipment insur- 7 ance, and certificates issued thereunder, except upon providing the 8 policyholder and certificate holders with at least [sixty] thirty days 9 notice. If the insurer changes the terms and conditions, then the insur- 10 er shall provide the policyholder with a letter notifying them of the 11 changes, a revised policy or endorsement and each certificate holder 12 with a revised certificate or endorsement, an updated brochure or 13 facsimile thereof, or other evidence indicating a change in the terms 14 and conditions has occurred, and an explanation of the changes. 15 (3) Notwithstanding paragraph two of this subsection, an insurer may 16 terminate a certificate upon fifteen days notice for: 17 (A) nonpayment of premium; or 18 (B) discovery of fraud or material misrepresentation in obtaining the 19 certificate or in the presentation of a claim thereunder. 20 (4) Notwithstanding paragraph two of this subsection, an insurer may 21 automatically terminate a certificate if the certificate holder: 22 (A) ceases to have active telecommunications service with the wireless 23 communications equipment vendor; or 24 (B) exhausts the aggregate limit of liability, if any, under the 25 certificate and the insurer sends notice of termination to the certif- 26 icate holder within fifteen business days after exhaustion of the limit. 27 However, if notice is not timely sent, coverage shall continue notwith- 28 standing the aggregate limit of liability until the insurer sends notice 29 of termination to the certificate holder. 30 (5) Notwithstanding the provisions of subparagraph (B) of paragraph 31 four of this subsection, upon the request of a certificate holder, the 32 certificate holder's coverage shall be eligible for reinstatement not 33 more than twelve months following the date of exhaustion of the coverage 34 limit in accordance with the terms of the policy and subject to the 35 enrollment criteria then applicable to prospective certificate holders 36 generally. 37 (6) Where the group policy is terminated by the policyholder, the 38 policyholder shall mail or deliver written notice to each certificate 39 holder advising the certificate holder of the termination of the group 40 policy and the effective date of termination. The written notice shall 41 be mailed or delivered to the certificate holder at least thirty days 42 prior to the termination. 43 (c) Whenever notice is required pursuant to this section, it shall be 44 in writing and mailed or delivered to the policyholder at the 45 policyholder's mailing address and to affected certificate holders at 46 the certificate holders' last known mailing addresses on file with the 47 insurer. Every notice of termination shall specify the reason or reasons 48 for termination. 49 (d) (1) Notwithstanding subsection (c) of this section, an insurer 50 shall not be required to give notice of termination to the certificate 51 holder if the insurer has been advised by either the policyholder or 52 another insurer that substantially similar coverage has been obtained 53 from the other insurer without lapse of coverage. 54 (2) A policyholder shall not be required to give notice of termination 55 to a certificate holder if substantially similar coverage has been 56 obtained from another insurer without lapse of coverage.A. 6872 8 1 (e) Notice or correspondence required by this section or otherwise 2 required by law may be sent on behalf of an insurer or vendor, as the 3 case may be, by the supervising entity appointed by the insurer. 4 (f) Notwithstanding any other provision of the law, wireless communi- 5 cations equipment insurance may be offered on a month to month or other 6 periodic basis as a group or master commercial inland marine policy 7 issued to a vendor of portable electronics for its enrolled customers. 8 (g) The superintendent may promulgate regulations regarding policies 9 of wireless communications equipment insurance, including, but not 10 limited to, regulations governing policy terms and conditions, and may 11 establish other reasonable limitations. 12 § 4. This act shall take effect on the one hundred twentieth day after 13 it shall have become a law.
