Bill Text: NY S06612 | 2017-2018 | General Assembly | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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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 (Republican 1-0)

Status: (Vetoed) 2017-11-29 - VETOED MEMO.203 [S06612 Detail]

Download: New_York-2017-S06612-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________
                                          6612
                               2017-2018 Regular Sessions
                    IN SENATE
                                      June 7, 2017
                                       ___________
        Introduced  by  Sen.  SEWARD -- read twice and ordered printed, and when
          printed to be committed to the Committee on Rules
        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. Wireless communications  equipment  insur-
    22  ance  also  includes any agreement whereby a person or any legal entity,
    23  in exchange for consideration paid, agrees to  provide  for  the  future
    24  repair,  replacement  or provision of wireless communications equipment.
    25  It includes any arrangement that seeks to provide substantially  similar
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD13079-01-7
        S. 6612                             2
     1  benefits through other means including arrangements that confer benefits
     2  upon  consumers  that purchase, including installment sale purchases, or
     3  lease wireless communications equipment or wireless services, regardless
     4  of  whether  the  benefits  are  provided  directly or indirectly to the
     5  consumer, where the benefits include the repair or  replacement  of  the
     6  covered  device,  the  provision  of  a  loaner or rental device, or the
     7  payment of indemnification in the event of a loss of a  covered  device,
     8  and  where  the  benefits  are expressly or impliedly conditioned on the
     9  happening of some fortuitous event such as the loss, theft  or  physical
    10  damage  of the covered device, or is structured as a remedy in the event
    11  of such perils without expressly stating those perils as a condition  of
    12  coverage.
    13    (B) "Wireless communications equipment insurance" does not include:
    14    (i) A service contract as that term is defined by article seventy-nine
    15  of this chapter;
    16    (ii)  A  policy  of  insurance covering a seller's or a manufacturer's
    17  obligations under a warranty; or
    18    (iii) A homeowners', renters', private passenger  automobile,  commer-
    19  cial multi-peril, or similar policy.
    20    (6) "Wireless communications equipment transaction" means:
    21    (A) The sale or lease of wireless communications equipment by a vendor
    22  to a customer; or
    23    (B)  The  sale  of  a  service related to the use of wireless communi-
    24  cations equipment by a vendor to a customer.
    25    (7) "Supervising entity" means a business entity that  is  a  licensed
    26  insurer or insurance producer that is authorized by an insurer to super-
    27  vise the administration of a wireless communications equipment insurance
    28  program.
    29    (8)  "Vendor"  means  a person in the business of engaging in wireless
    30  communications equipment transactions directly or indirectly.
    31    (9) "Wireless communications service"  means  telephonic  and/or  data
    32  transmission  service  over a wireless network through wireless communi-
    33  cations equipment.
    34    § 2. Section 2131 of the insurance law, as amended by chapter  582  of
    35  the  laws  of  2003,  the section heading and subsections (a), (d), (e),
    36  (f), (h) and (i) as amended by chapter 368 of  the  laws  of  2010,  and
    37  subsection (g) as amended by chapter 426 of the laws of 2005, is amended
    38  to read as follows:
    39    §  2131. Limited license for rental vehicle companies, wireless commu-
    40  nications equipment vendors and self-service storage companies. (a)  The
    41  superintendent  may issue to a rental vehicle company, a wireless commu-
    42  nications equipment vendor, a self-service storage company or to a fran-
    43  chisee of a rental vehicle company, [a wireless communications equipment
    44  vendor,] or a self-service storage company which has complied  with  the
    45  requirements  of  this section, a limited license authorizing the licen-
    46  see, known as a "limited licensee" for the purpose of this  article,  to
    47  act as agent, with reference to the kinds of insurance specified in this
    48  section,  of  any insurer authorized to write such kinds of insurance in
    49  this state.
    50    (b) [The] Except as contained in paragraph three  of  this  subsection
    51  regarding  wireless  communications equipment vendors, the prerequisites
    52  for issuance of a limited license under this section shall be the filing
    53  with the superintendent of the following:
    54    (1) an application, signed by an officer of  the  applicant,  for  the
    55  limited  license  in  such  form  or forms, and supplements thereto, and
    56  containing such information, as the superintendent may prescribe; [and]
        S. 6612                             3
     1    (2) an appointment of a limited licensee by the appointing insurer, in
     2  a format approved by the superintendent, no more than fifteen days after
     3  the date the agency contract is executed or the first insurance contract
     4  is submitted, whichever is later, stating that it has  satisfied  itself
     5  that  the  named  applicant  is  trustworthy and competent to act as its
     6  insurance agent for this limited  purpose  and  that  the  insurer  will
     7  appoint  such applicant to act as the agent in reference to the doing of
     8  such kind or kinds of insurance which are permitted by this section,  if
     9  the  limited  license  applied for is issued by the superintendent. Such
    10  appointment shall be subscribed by an officer or managing agent of  such
    11  insurer and affirmed as true under the penalties of perjury;
    12    (3)  the  prerequisites  for  issuance of a limited license under this
    13  section for a wireless communications  equipment  vendor  shall  be  the
    14  filing   of  a  sworn  application  with  the  superintendent  on  forms
    15  prescribed and furnished by the superintendent which shall:
    16    (A)  provide  the  name,  residence  address,  and  other  information
    17  required  by the superintendent for an employee or officer of the vendor
    18  that is designated by the applicant as the person  responsible  for  the
    19  vendor's  compliance  with the requirements of this chapter. However, if
    20  the vendor derives more than fifty percent of its revenue from the  sale
    21  of  wireless  communications  equipment  insurance the information noted
    22  above shall be provided for all officers, directors, and shareholders of
    23  record having beneficial ownership of ten percent or more of  any  class
    24  of securities registered under the federal securities law; and
    25    (B) the location of the applicant's home office; and
    26    (4) any vendor engaging in wireless communications equipment insurance
    27  transactions  must  obtain a license prior to offering wireless communi-
    28  cations equipment insurance.
    29    (c) In the event that any provision of this chapter is  violated,  the
    30  superintendent may:
    31    (1)  revoke  or suspend a limited license issued under this section in
    32  accordance with the provisions of section two thousand one  hundred  ten
    33  of this article; or
    34    (2)  after  notice  and hearing impose such other penalties, including
    35  suspending the transaction of  insurance  at  specific  locations  where
    36  violations  of  this  article  have  occurred,  or require the vendor or
    37  license holder to identify and suspend or revoke the ability of individ-
    38  ual employees or authorized representatives to act under the license, as
    39  the superintendent deems  necessary  or  convenient  to  carry  out  the
    40  purposes of this section.
    41    (d)  The  rental  vehicle  company,  wireless communications equipment
    42  vendor, or self-service storage company, or franchisee licensed pursuant
    43  to subsection (a) of this section may act as  agent  for  an  authorized
    44  insurer  only  in connection with the rental of motor vehicles, the sale
    45  or offering for sale of wireless communications equipment, or the rental
    46  of storage space, respectively, and only with respect to  the  following
    47  kinds of insurance:
    48    (1) with respect to rental vehicle companies:
    49    (A)  excess  liability  insurance that provides coverage to the rental
    50  car company or franchisee and renters and other  authorized  drivers  of
    51  rental  vehicles, in excess of the standard liability limits provided by
    52  the rental vehicle company in its rental agreement, for liability  aris-
    53  ing from the negligent operation of the rental vehicle;
    54    (B)  accident  and  health insurance that provides coverage to renters
    55  and other vehicle occupants, in excess to the standard first party bene-
    56  fits provided pursuant to article fifty-one of this chapter,  for  acci-
        S. 6612                             4
     1  dental  death  and/or  dismemberment  and for medical expenses resulting
     2  from an accident that occurs during the rental period;
     3    (C)  personal  effects insurance that provides coverage to renters and
     4  other vehicle occupants for the loss of, or damage to, personal  effects
     5  that occurs during the rental period;
     6    (D)  any  other coverage which the superintendent may approve as mean-
     7  ingful and appropriate in connection with the rental of motor  vehicles;
     8  or
     9    (2) with respect to wireless communications equipment vendors, [insur-
    10  ance issued to cover the loss, theft, mechanical failure, or malfunction
    11  of,  or  damage  to, wireless communications equipment offered] wireless
    12  communications equipment insurance as either an individual policy issued
    13  to the consumer or as a group or master commercial inland marine  policy
    14  under  which  certificates  or  other evidence of coverage are issued to
    15  individual consumers who enroll in the program[, provided however,  that
    16  said  insurance  shall  not  extend  to  wireless  services  or  service
    17  contracts governed by article seventy-nine of this chapter]; or
    18    (3) with respect to  self-service  storage  companies,  the  following
    19  coverages  offered as either an individual policy issued to the consumer
    20  or as a group policy:
    21    (A) personal effects insurance that provides coverage  to  renters  of
    22  storage  spaces  at  the self-service storage company's facility for the
    23  loss of, or damage to, personal property stored at the  facility,  where
    24  the loss or damage occurs at the same facility during the rental period;
    25    (B) any other coverage that the superintendent may approve as meaning-
    26  ful and appropriate in connection with the rental of storage space.
    27    (e) No insurance may be issued pursuant to this section unless:
    28    (1)  with  regard to the rental of vehicles only, the rental period of
    29  the rental agreement does not exceed thirty consecutive days; and
    30    (2) at every location where rental vehicle agreements, wireless commu-
    31  nications equipment agreements, or self-service storage  agreements  are
    32  executed,  brochures or other written materials are readily available to
    33  the prospective consumer that:
    34    (A) summarize, clearly and correctly, the material terms of  insurance
    35  coverage,  including  the  identity  of  the insurer and, with regard to
    36  wireless communications equipment insurance, the  agent  licensed  under
    37  subsection  (b)  of  section  two  thousand  one  hundred  three of this
    38  article, the identity of the  supervising  entity,  the  amount  of  any
    39  applicable  deductible  and how it is to be paid, benefits of the cover-
    40  age, and key terms and conditions of coverage such as  whether  wireless
    41  communications  equipment  may be repaired or replaced with similar make
    42  and model reconditioned or non-original manufacturer parts or equipment;
    43    (B) disclose that these policies may provide a duplication of coverage
    44  already provided by a renter's  personal  automobile  insurance  policy,
    45  homeowner's  insurance  policy,  personal liability insurance policy, or
    46  other source of coverage;
    47    (C) state that the purchase by the consumer of the kinds of  insurance
    48  specified in this section is not required in order to rent a vehicle, to
    49  purchase  or lease wireless communications equipment, or to rent storage
    50  space;
    51    (D) describe the process for filing a claim in the event the  consumer
    52  elects  to purchase coverage, and with regard to wireless communications
    53  equipment insurance, describe  how  to  return  wireless  communications
    54  equipment  and  the  maximum  fee  or  fees  applicable in the event the
    55  customer fails to comply with any equipment return requirements;
        S. 6612                             5
     1    (E) the price, deductible,  benefits,  exclusions  and  conditions  or
     2  other limitations of such policies;
     3    (F) disclose that the employee of the rental vehicle company, wireless
     4  communications equipment vendor or self-storage company is not qualified
     5  or  authorized  to  evaluate  the  adequacy  of the purchaser's existing
     6  coverages, unless otherwise licensed; [and]
     7    (G) notwithstanding any law, rule or regulation  a  wireless  communi-
     8  cations  equipment  insurance vendor shall state whether an employee may
     9  earn compensation under the vendor's limited lines  license  as  allowed
    10  under  subsection  (g) of this section and that part of the premium paid
    11  by the purchaser may be paid by the vendor to an administrator; and
    12    (H) state that the customer may cancel the insurance at any  time  and
    13  any unearned premium will be refunded in accordance with applicable law.
    14    (3)  with  respect to wireless communications equipment insurance, the
    15  written materials required by paragraph two of this subsection shall not
    16  be subject to filing or approval requirements  with  the  superintendent
    17  pursuant to subsection (f) of this section.
    18    (4)  evidence  of coverage is provided to every consumer who elects to
    19  purchase such coverage.
    20    (f) Rates and forms for insurance under this section shall be  subject
    21  to   article  twenty-three  of  this  chapter.  Any  brochures  used  in
    22  connection with insurance under this section shall  be  filed  with  the
    23  superintendent  for  review  and  shall include disclosure of the claims
    24  filing process, premium, deductible amounts  and  limits  and  shall  be
    25  prominently  displayed  in  the brochure with at least twelve-point type
    26  bold headings.   Any such brochures shall also  be  subject  to  section
    27  three  thousand one hundred two of this chapter, provided, however, that
    28  any policy, certificate or other evidence of insurance coverage, whether
    29  or not contained in such brochure, shall not be subject to section three
    30  thousand one hundred two of this chapter, but  shall  be  written  in  a
    31  clear  and coherent manner and whenever practicable shall use words with
    32  common and everyday meaning to facilitate readability  and  to  aid  the
    33  policyholder in understanding the coverage provided.
    34    (g) Any limited license issued under this section shall also authorize
    35  any  salaried  employee  or  any  sales representative authorized by the
    36  licensee who, pursuant to subsection (h) of this section, is trained  to
    37  act  individually  on behalf, and under the supervision, of the licensee
    38  with respect to the  kinds  of  insurance  specified  in  this  section.
    39  Notwithstanding  any  other  provision  of  law, employees or authorized
    40  representatives of a vendor of wireless communications  equipment  shall
    41  not  be  compensated based primarily on the number of customers enrolled
    42  for wireless communications equipment insurance coverage but may receive
    43  compensation for activities under the limited  lines  license  which  is
    44  incidental to their overall compensation.
    45    (h) Each company or franchisee licensed pursuant to this section shall
    46  conduct  a training program, which shall be submitted to the superinten-
    47  dent for approval prior to use, and which shall meet the following mini-
    48  mum standards:
    49    (1) each trainee shall receive basic instruction about  the  kinds  of
    50  insurance  specified in this section offered for purchase by prospective
    51  renters of rental vehicles, purchasers or lessors of  wireless  communi-
    52  cations equipment, or renters of storage space;
    53    (2)  each  trainee shall be instructed with respect to the disclosures
    54  required under subsection (e) of this section and to  acknowledge  to  a
    55  prospective  renter of a rental vehicle, purchaser or lessor of wireless
    56  communications equipment, or renter of storage space  that  purchase  of
        S. 6612                             6
     1  any  such  insurance  specified in this section is not required in order
     2  for the consumer to rent a motor vehicle,  purchase  or  lease  wireless
     3  communications equipment, or rent storage space;
     4    (3)  each  trainee shall be instructed to acknowledge to a prospective
     5  consumer of the kinds of insurance specified in this  section  that  the
     6  consumer  may  have insurance policies that already provide the coverage
     7  being offered by the rental vehicle company, the wireless communications
     8  equipment vendor, or  self-service  storage  company  pursuant  to  this
     9  section; and
    10    (4)  with  regard  to  wireless communications equipment insurance and
    11  self-service storage company insurance, training materials may be devel-
    12  oped and provided by an agent licensed pursuant  to  subsection  (b)  of
    13  section two thousand one hundred three of this article.
    14    (i)  Limited  licensees  acting pursuant to and under the authority of
    15  this section shall comply with all applicable provisions of  this  arti-
    16  cle, except that notwithstanding section two thousand one hundred twenty
    17  of  this  article, a limited licensee pursuant to this section shall not
    18  be required to treat premiums collected from consumers [purchasing  such
    19  insurance  when  renting  motor vehicles, purchasing or leasing wireless
    20  communications equipment,] or renting storage space as funds received in
    21  a fiduciary capacity, provided that:
    22    (1) the insurer represented by the limited licensee has  consented  in
    23  writing,  signed  by  the  insurer's  officer, that premiums need not be
    24  segregated from funds received by the rental vehicle company,  [wireless
    25  communications  equipment vendor,] or self-storage company on account of
    26  vehicle rental, [wireless communications equipment purchase  or  lease,]
    27  or storage space rental; [and]
    28    (2)  the charges for insurance coverage are itemized but not billed to
    29  the consumer separately from the charges for rental vehicles,  [purchase
    30  or lease of wireless communications equipment,] or storage space rental;
    31  and
    32    (3) with respect to wireless communications equipment insurance premi-
    33  ums,  vendors  billing and collecting such charges shall not be required
    34  to maintain such funds in a segregated account provided that the  vendor
    35  is authorized by the insurer to hold such funds in an alternative manner
    36  and  remits  such amounts to the supervising entity within sixty days of
    37  receipt. All funds received by a vendor from an  enrolled  customer  for
    38  the sale of wireless communications equipment insurance shall be consid-
    39  ered  funds  held in trust by the vendor in a fiduciary capacity for the
    40  benefit of the insurer. Any charge to the enrolled customer for coverage
    41  that is not included in the cost associated with the purchase  or  lease
    42  of  wireless communications equipment or related services shall be sepa-
    43  rately itemized on the enrolled customer's bill. If the insurance cover-
    44  age is included with the purchase or lease  of  wireless  communications
    45  equipment or related services the vendor shall clearly and conspicuously
    46  disclose to the enrolled customer that the coverage is included with the
    47  wireless  communications  equipment  or  related  services.  Vendors may
    48  receive compensation for billing and collection services.
    49    (j) No limited licensees under this section shall advertise, represent
    50  or otherwise hold itself or any  of  its  employees  themselves  out  as
    51  licensed insurance agents or brokers.
    52    (k)  The  superintendent  may  issue  a replacement for a currently in
    53  force license which has been lost or destroyed. Before such  replacement
    54  license  shall  be  issued,  there shall be on file in the office of the
    55  superintendent a  written  application  for  such  replacement  license,
        S. 6612                             7
     1  affirming  under  penalty  of perjury that the original license has been
     2  lost or destroyed, together with a fee of fifteen dollars.
     3    (l)  [For purposes of this section "wireless communications equipment"
     4  shall mean wireless handsets, pagers, personal digital assistants, wire-
     5  less telephones or  wireless  telephone  batteries  and  other  wireless
     6  devices  and accessories related to such devices that are used to access
     7  wireless  communications  services  and  includes   wireless   services]
     8  Notwithstanding  any  law,  rule,  or  regulation  to the contrary, with
     9  respect to wireless communications equipment insurance, the only disclo-
    10  sures and materials required in the provision of such insurance shall be
    11  the items required by this section.
    12    § 3. Section 3449 of the insurance law, as added by chapter 426 of the
    13  laws of 2005, is amended to read as follows:
    14    § 3449. Wireless communications equipment insurance policies.  (a)  In
    15  this  section,  the  term  "policy  of wireless communications equipment
    16  insurance" means an insurance policy  covering  the  kind  of  insurance
    17  described  in  subsection  [(1)] (z) of section two thousand one hundred
    18  [thirty-one] one of this chapter.
    19    (b) (1) A group policy, and certificates issued thereunder,  of  wire-
    20  less  communications  equipment  insurance  shall  not be subject to the
    21  provisions of section three thousand four hundred twenty-five  or  three
    22  thousand four hundred twenty-six of this article.
    23    (2)  An  insurer shall not terminate or otherwise change the terms and
    24  conditions of a group policy of wireless communications equipment insur-
    25  ance, and certificates issued  thereunder,  except  upon  providing  the
    26  policyholder  and  certificate holders with at least [sixty] thirty days
    27  notice. If the insurer changes the terms and conditions, then the insur-
    28  er shall provide the policyholder with a letter notifying  them  of  the
    29  changes,  a  revised  policy  or endorsement and each certificate holder
    30  with a revised  certificate  or  endorsement,  an  updated  brochure  or
    31  facsimile  thereof,  or  other evidence indicating a change in the terms
    32  and conditions has occurred, and an explanation of the changes.
    33    (3) Notwithstanding paragraph two of this subsection, an  insurer  may
    34  terminate a certificate upon fifteen days notice for[:
    35    (A) nonpayment of premium; or
    36    (B)] discovery of fraud or material misrepresentation in obtaining the
    37  certificate or in the presentation of a claim thereunder.
    38    (4)  Notwithstanding  paragraph two of this subsection, an insurer may
    39  automatically terminate a certificate if the certificate holder:
    40    (A) ceases to have active telecommunications service with the wireless
    41  communications equipment vendor; [or]
    42    (B) nonpayment of premium; or
    43    (C) exhausts the aggregate limit  of  liability,  if  any,  under  the
    44  certificate  and  the insurer sends notice of termination to the certif-
    45  icate holder within [fifteen] thirty business days after  exhaustion  of
    46  the limit. However, if notice is not timely sent, coverage shall contin-
    47  ue  notwithstanding  the  aggregate limit of liability until the insurer
    48  sends notice of termination to the certificate holder.
    49    (5) Notwithstanding the provisions of subparagraph [(B)] (C) of  para-
    50  graph four of this subsection, upon the request of a certificate holder,
    51  the  certificate  holder's  coverage shall be eligible for reinstatement
    52  not more than twelve months following the  date  of  exhaustion  of  the
    53  coverage limit in accordance with the terms of the policy and subject to
    54  the enrollment criteria then applicable to prospective certificate hold-
    55  ers generally.
        S. 6612                             8
     1    (6)  Where  the  group  policy  is terminated by the policyholder, the
     2  policyholder shall mail or deliver written notice  to  each  certificate
     3  holder  advising  the certificate holder of the termination of the group
     4  policy and the effective date of termination. The written  notice  shall
     5  be  mailed  or  delivered to the certificate holder at least thirty days
     6  prior to the termination.
     7    (c) Whenever notice is required pursuant to this section, it shall  be
     8  in   writing  and  mailed  or  delivered  to  the  policyholder  at  the
     9  policyholder's mailing address and to affected  certificate  holders  at
    10  the  certificate  holders' last known mailing addresses on file with the
    11  insurer. Every notice of termination shall specify the reason or reasons
    12  for termination.
    13    (d) (1) Notwithstanding subsection (c) of  this  section,  an  insurer
    14  shall  not  be required to give notice of termination to the certificate
    15  holder if the insurer has been advised by  either  the  policyholder  or
    16  another  insurer  that  substantially similar coverage has been obtained
    17  from the other insurer without lapse of coverage.
    18    (2) A policyholder shall not be required to give notice of termination
    19  to a certificate holder  if  substantially  similar  coverage  has  been
    20  obtained from another insurer without lapse of coverage.
    21    (e)  Notice  or  correspondence  required by this section or otherwise
    22  required by law may be sent on behalf of an insurer or  vendor,  as  the
    23  case may be, by the supervising entity appointed by the insurer.
    24    (f)  Notwithstanding any other provision of the law, wireless communi-
    25  cations equipment insurance may be offered on a month to month or  other
    26  periodic  basis  as  a  group  or master commercial inland marine policy
    27  issued to a vendor of portable electronics for its enrolled customers.
    28    (g) The superintendent may promulgate regulations  regarding  policies
    29  of  wireless  communications  equipment  insurance,  including,  but not
    30  limited to, regulations governing policy terms and conditions,  and  may
    31  establish other reasonable limitations.
    32    § 4. This act shall take effect on the one hundred twentieth day after
    33  it shall have become a law.