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) 2019-03-25 - 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.
                                                                   LBD08054-01-9

        A. 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 equipment
    29  vendor,]  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-
    48  ance issued to cover the loss, theft, mechanical failure, or malfunction
    49  of, 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, that
    54  said  insurance  shall  not  extend  to  wireless  services  or  service
    55  contracts governed by article seventy-nine of this chapter]; or

        A. 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 not

        A. 6872                             6
     1  be required to treat premiums collected from consumers [purchasing  such
     2  insurance  when  renting  motor vehicles, purchasing or leasing wireless
     3  communications 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, [wireless
     8  communications 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, [purchase
    13  or 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"
    42  shall mean wireless handsets, pagers, personal digital assistants, wire-
    43  less telephones or  wireless  telephone  batteries  and  other  wireless
    44  devices  and accessories related to such devices that are used to access
    45  wireless  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.
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