Bill Text: AZ SB1251 | 2012 | Fiftieth Legislature 2nd Regular | Chaptered
Bill Title: Portable electronics insurance
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2012-03-20 - Governor Signed [SB1251 Detail]
Download: Arizona-2012-SB1251-Chaptered.html
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Senate Engrossed |
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State of Arizona Senate Fiftieth Legislature Second Regular Session 2012
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CHAPTER 57
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SENATE BILL 1251 |
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AN ACT
Amending title 20, chapter 6, Arizona Revised Statutes, by adding article 17; relating to portable electronics insurance.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Title 20, chapter 6, Arizona Revised Statutes, is amended by adding article 17, to read:
ARTICLE 17. PORTABLE ELECTRONICS INSURANCE
20-1693. Definitions
In this article, unless the context otherwise requires:
1. "Customer" means a person who purchases portable electronics or services.
2. "Enrolled customer" means a customer who elects coverage under a portable electronics insurance policy issued to a vendor of portable electronics.
3. "Location" means any physical location in this state or any website, call center site or similar location directed to residents of this state.
4. "Portable electronics" means 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 devices, video viewing or recording devices, digital cameras, video camcorders, portable gaming systems, docking stations, automatic answering devices and other similar devices and the devices' accessories.
5. "Portable electronics insurance":
(a) Means insurance providing coverage for the repair or replacement of portable electronics that may provide coverage for portable electronics against Loss, theft or inoperability, or any combination thereof, due to mechanical failure, malfunction, damage or other similar causes of loss.
(b) Does not include:
(i) A service contract under chapter 4, article 11 of this title.
(ii) An insurance policy covering a seller's or manufacturer's obligations under a warranty.
(iii) A homeowner's, renter's, private passenger automobile, commercial multiperil or similar policy.
6. "Portable electronics transaction" means either:
(a) The sale or lease of portable electronics by a vendor to a customer.
(b) The sale of a service related to the use of portable electronics by a vendor to a customer.
7. "Supervising entity" means a business entity that is a licensed insurer or insurance producer and that is authorized by an insurer to supervise the administration of a portable electronics insurance policy.
8. "Vendor" means a person in the business of engaging in portable electronics transactions directly or indirectly.
20-1693.01. Licensure of vendors
A. The director may issue, and a vendor who intends to sell or offer insurance coverage under a portable electronics insurance policy is required to obtain, a limited lines license that authorizes the vendor to offer or sell insurance coverage under a portable electronics insurance policy.
B. A limited lines license issued under this section authorizes an employee or authorized representative of the vendor to sell or offer coverage under a portable electronics insurance policy to a customer at each location at which the vendor engages in portable electronics transactions.
C. An applicant for a portable electronics insurance license shall file with the director a written application that is in a form prescribed by the director and that is signed by the designated representative of the vendor who is the person responsible for the vendor's compliance with the requirements of this article. If the vendor derives more than fifty per cent of its revenue from the sale of portable electronics insurance the information in the written application shall be provided for all officers, directors and shareholders of record having beneficial ownership of ten per cent or more of any class of securities registered under the federal securities law.
D. A supervising entity shall maintain a registry of vendor locations that are authorized to sell or solicit portable electronics insurance coverage in this state. On the director's request, and with ten days notice to the supervising entity, the registry shall be open to inspection and examination by the director during regular business hours of the supervising entity.
E. Notwithstanding any other law, a license issued pursuant to this section authorizes the licensee and its employees or authorized representatives to engage in those activities that are permitted in this article.
20-1693.02. Portable electronics insurance; requirements; disclosures
A. At every location where portable electronics insurance is offered to customers, brochures or other written materials must be made available to a prospective customer that:
1. Disclose that portable electronics insurance may provide a duplication of coverage already provided by a customer's homeowner's insurance policy, renter's insurance policy or other source of coverage.
2. State that the enrollment by the customer in a portable electronics insurance policy is not required in order to purchase or lease portable electronics or services.
3. Summarize the material terms of the insurance coverage, including:
(a) The identity of the insurer.
(b) The identity of the supervising entity.
(c) The amount of any applicable deductible and how it is to be paid.
(d) Benefits of the coverage.
(e) Key terms and conditions of the coverage, including whether portable electronics may be repaired or replaced with similar make and model reconditioned or nonoriginal manufacturer parts or equipment.
4. Summarize the process for filing a claim, including a description of how to return portable electronics and the maximum fee applicable in the event the customer fails to comply with any equipment return requirements.
5. State that an enrolled customer may cancel enrollment for coverage under a portable electronics insurance policy at any time and the person paying the premium shall receive a refund or credit of any applicable unearned premium within sixty days.
B. Portable electronics insurance may be offered on a month to month or other periodic basis as a group or master commercial inland marine policy issued to a vendor of portable electronics for its enrolled customers.
C. Eligibility and underwriting standards for customers electing to enroll in coverage shall be established for each portable electronics insurance policy.
20-1693.03. Portable electronics vendors; authority; charges for portable electronics insurance; accounting
A. The employees and authorized representatives of vendors may sell or offer portable electronics insurance to customers and shall not be subject to licensure as an insurance producer under this title or be subject to the continuing education requirements of this title if:
1. The vendor obtains a license to authorize its employees or authorized representatives to sell or offer portable electronics insurance pursuant to this article.
2. Each vendor or its designee provides a training program that gives the vendor's employees and authorized representatives basic instruction about coverage under a portable electronics insurance policy and the requirements of this article.
B. Notwithstanding any other law, a vendor of portable electronics or its employees or authorized representatives shall not:
1. Offer or sell insurance except in conjunction with and incidental to portable electronics transactions.
2. Advertise, represent or otherwise be portrayed as licensed insurers or insurance producers unless so licensed.
C. The vendor may bill and collect the charges for portable electronics insurance coverage. Any charge to the enrolled customer for coverage that is not included in the cost associated with the purchase or lease of portable electronics or related services shall be separately itemized on the enrolled customer's bill. If the portable electronics insurance coverage is included with the purchase or lease of portable electronics or related services, the vendor shall clearly and conspicuously disclose to the enrolled customer that the portable electronics insurance coverage is included with the portable electronics or related services. A Vendor that bills and collects charges for insurance coverage included with the purchase or lease of portable electronics or related services is not required to maintain those monies in a segregated account if the vendor is authorized by the insurer to hold those monies in an alternative manner and remits these monies to the supervising entity within sixty days of receipt. All monies received by a vendor from an enrolled customer for the sale of portable electronics insurance shall be considered monies held in trust by the vendor in a fiduciary capacity for the benefit of the insurer.
D. Vendors may receive compensation for billing and collection services.
20-1693.04. Suspension or revocation of license
If a vendor or its employee or authorized representative violates any provision of this article, the director may impose penalties pursuant to section 20‑295, including suspending the privilege of transacting portable electronics insurance pursuant to this article at the specific business location where violations have occurred.
20-1693.05. Termination of portable electronics insurance; notice
A. Notwithstanding any other law:
1. An insurer may terminate or otherwise change the terms and conditions of a portable electronics insurance policy only on providing the policyholder and enrolled customers with at least thirty days notice.
2. If the insurer changes the terms and conditions of a policy, the insurer shall provide the vendor policyholder with a revised policy or endorsement and each enrolled customer with a revised certificate, endorsement, updated brochure or other evidence indicating that a change in the terms and conditions has occurred and that includes a summary of the material changes.
B. Notwithstanding subsection A, paragraph 1 of this section:
1. An insurer may terminate a customer's enrollment under a portable electronics insurance policy with fifteen days' notice for discovery of fraud or material misrepresentation in obtaining coverage or in the presentation of a claim.
2. An insurer may immediately terminate a customer's enrollment under a portable electronics insurance policy for any of the following reasons:
(a) Nonpayment of premium.
(b) If the enrolled customer ceases to have an active service with the vendor.
(c) If an enrolled customer 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 customer within thirty calendar days after exhaustion of the limit. If notice is not timely sent, enrollment shall continue notwithstanding the aggregate limit of liability until the insurer sends notice of termination to the enrolled customer.
C. If a vendor terminates a portable electronics insurance policy, the vendor shall mail or deliver written notice to each enrolled customer advising the enrolled customer of the termination of the policy and the effective date of termination. The written notice shall be mailed or delivered to the enrolled customer at least thirty days before the termination.
D. If notice or correspondence with respect to a policy of portable electronics insurance is required pursuant to this section or is otherwise required by law, it shall be in writing and sent within the notice period, if any, specified in the statute or rule requiring the notice or correspondence. Notwithstanding any other law, notices and correspondence may be sent either by mail or by electronic means. If the notice or correspondence is mailed, it shall be sent to the vendor at the vendor's mailing address specified for such purpose and to its affected enrolled customers' last known mailing addresses on file with the insurer. The insurer or vendor shall maintain proof of mailing in a form authorized or accepted by the United States postal service or other commercial mail delivery service. If the notice or correspondence is sent by electronic means, it shall be sent to the vendor at the vendor's electronic mail address specified for such purpose and to its affected enrolled customers' last known electronic mail addresses as provided by each enrolled customer to the insurer or vendor, as applicable. For the purposes of this section, an enrolled customer's provision of an electronic mail address to the insurer or vendor is deemed to constitute consent to receive notices and correspondence by electronic means. The insurer or vendor, as applicable, shall maintain proof that the notice or correspondence was sent.
E. The supervising entity appointed by the insurer may send Notice or correspondence that is required by this section, or that is otherwise required by law, on behalf of an insurer or vendor.
20-1693.06. Application of existing laws
To the extent not inconsistent with this article, sections 20‑281, 20‑289 and 20‑289.01, section 20‑290, subsection A and sections 20‑291, 20‑292, 20‑295, 20‑296, 20‑297, 20‑299, 20‑301 and 20‑302 apply to the sale of portable electronics insurance.
APPROVED BY THE GOVERNOR MARCH 20, 2012.
FILED IN THE OFFICE OF THE SECRETARY OF STATE MARCH 22, 2012.
