Bill Text: MN HF2638 | 2011-2012 | 87th Legislature | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Portable electronics insurance sale regulated.
Spectrum: Slight Partisan Bill (Republican 6-2)
Status: (Passed) 2012-05-07 - Secretary of State Chapter 259 05/01/12 [HF2638 Detail]
Download: Minnesota-2011-HF2638-Introduced.html
Bill Title: Portable electronics insurance sale regulated.
Spectrum: Slight Partisan Bill (Republican 6-2)
Status: (Passed) 2012-05-07 - Secretary of State Chapter 259 05/01/12 [HF2638 Detail]
Download: Minnesota-2011-HF2638-Introduced.html
1.2relating to insurance; regulating sale of portable electronics insurance; amending
1.3Minnesota Statutes 2010, section 60K.381.
1.4BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.5 Section 1. Minnesota Statutes 2010, section 60K.381, is amended to read:
1.660K.381 SALE OF PORTABLE ELECTRONICS INSURANCE.
1.7 Subdivision 1. Definitions. For purposes of this section, the following terms have
1.8the following meanings:
1.9(a) "Customer" means a person who purchases portable electronics or services.
1.10(b) "Covered customer" means a customer who elects coverage under a portable
1.11electronics insurance policy issued to a vendor of portable electronics.
1.12(c) "Portable electronics" means electronic devices that are portable in nature, their
1.13accessories, and services related to the use of the device.
1.14(d)(1) "Portable electronics insurance" means insurance providing coverage for
1.15the repair or replacement of portable electronics, which may cover portable electronics
1.16against any one or more of the following causes of loss: loss, theft, mechanical failure,
1.17malfunction, damage, or other applicable perils.
1.18(2) "Portable electronics insurance" does not include:
1.19(i) a service contract governed by chapter 59B;
1.20(ii) a policy of insurance covering a seller's or a manufacturer's obligations under
1.21a warranty; or
1.22(iii) a homeowner's, renter's, private passenger automobile, commercial multiperil,
1.23or similar policy that covers loss or theft of portable electronics.
1.24(e) "Portable electronics transaction" means:
2.1(1) the sale or lease of portable electronics by a vendor to a customer; or
2.2(2) the sale of a service related to the use of portable electronics by a vendor to a
2.3customer.
2.4(f) "Supervisingagency entity" means a business entity that is a licensed insurer
2.5or insurance producer that is appointed by an insurer to supervise the administration of a
2.6portable electronics insurance program.
2.7(g) "Vendor" means a business entity in the business of engaging in portable
2.8electronics transactions, directly or indirectly.
2.9 Subd. 2. Licensure of vendors. (a) A vendor is required to hold a limited lines
2.10license issued under this section to sell or offer coverage under a policy of portable
2.11electronics insurance in connection with, and incidental to, a portable electronics
2.12transaction with a customer.
2.13(b) A limited lines license issued under this section shall authorize any employee or
2.14authorized representative of the vendor to sell or offer coverage under a policy of portable
2.15electronics insurance to a customer in connection with, and incidental to, a portable
2.16electronics transaction at each location at which the vendor engages in portable electronics
2.17transactions. The application for such a limited lines license shallset forth each location at
2.18which the vendor offers coverage under a policy of portable electronics insurance. The
2.19vendor shall notify the commissioner within 30 days of adding or eliminating such a
2.20location.:
2.21(1) provide the name, residence address, and other information required by the
2.22commissioner for an employee or officer of the vendor that is designated by the applicant
2.23as the person responsible for the vendor's compliance with the requirements of this
2.24chapter. However, if the vendor derives more than 50 percent of its revenue from the sale
2.25of portable electronics insurance, the information noted above must be provided for all
2.26officers, directors, and shareholders of record having beneficial ownership of ten percent or
2.27more of any class of securities of the vendor registered under the federal securities law; and
2.28(2) contain a statement by the applicant indicating whether it intends to offer
2.29portable electronics from more than ten locations in this state. For purposes of this section,
2.30a vendor offering coverage to customers through a Web site is deemed to be offering
2.31portable electronics insurance coverage from more than ten locations.
2.32(c) A vendor, or the supervising entity that is appointed to oversee the vendor's
2.33portable electronics insurance program, shall maintain a registry of locations which are
2.34authorized to sell or solicit portable electronics insurance coverage in this state. Upon
2.35request by the commissioner and within ten days' notice to the vendor or supervising
2.36entity, the registry must be made available for inspection by the commissioner.
3.1(d) Notwithstanding any other provision of law, a license issued pursuant to this
3.2section shall authorize the licensee and its employees or authorized representatives to
3.3engage only in those activities that are expressly permitted in this section.
3.4 Subd. 3. Requirements for sale of portable electronics insurance. (a) At every
3.5location where portable electronics insurance is offered to customers, brochures or other
3.6written materials must be made available to a prospective customer which:
3.7(1) disclose that portable electronics insurance may provide a duplication of
3.8coverage already provided by a customer's homeowner's insurance policy, renter's
3.9insurance policy, or other source of coverage;
3.10(2) state that the enrollment by the customer in a portable electronics insurance
3.11program is not required in order to purchase or lease portable electronics or services;
3.12(3) summarize the material terms of the insurance coverage, including:
3.13(i) the identity of the insurer;
3.14(ii) the identity of the supervisingagency entity;
3.15(iii) the amount of any applicable deductible and how it is to be paid;
3.16(iv) benefits of the coverage;
3.17(v) the terms for terminating or modifying coverage as set forth in the policy of
3.18portable electronics insurance; and
3.19(vi) any material exclusions, conditions, or other limitations of coverage including
3.20whether portable electronics may be repaired or replaced with similar make and model
3.21reconditioned or nonoriginal manufacturer parts or equipment;
3.22(4) describe the process for filing a claim, including a description of any
3.23requirements:
3.24(i) to return portable electronics and the maximum fee applicable in the event the
3.25customer fails to comply with any equipment return requirements; and
3.26(ii) any proof of loss requirements; and
3.27(5) state that the customer may cancel enrollment for coverage under a portable
3.28electronics insurance policy at any time and any unearned premium will be refunded or
3.29credited on a pro rata basis to the person paying the premium.
3.30(b) Portable electronics insurance may be offered on a month-to-month or other
3.31periodic basis as a group or master commercial inland marine policy issued to a vendor of
3.32portable electronics under which individual customers may elect to enroll for coverage.
3.33(c) Notwithstanding any other provision of Minnesota law regarding the termination
3.34or modification of coverage under a policy of insurance, the terms for the termination
3.35or modification of coverage under a policy of portable electronics insurance issued in
3.36compliance with this chapter shall be as set forth in the policy.
4.1(d) Eligibility and underwriting standards for customers electing to enroll in
4.2coverage shall be established for each portable electronics insurance program.
4.3 Subd. 4. Authority of vendors of portable electronics. (a) The employees and
4.4authorized representatives of vendors may sell or offer portable electronics insurance to
4.5customers and shall not be subject to licensure as an insurance producer under this chapter
4.6provided that:
4.7(1) the vendor obtains a limited lines license to authorize its employees or authorized
4.8representatives to sell or offer portable electronics insurance pursuant to this section;
4.9(2) the insurer issuing the portable electronics insurance either directly supervises
4.10or appoints a supervisingagency entity to supervise the administration of the program
4.11including development of a training program for employees and authorized representatives
4.12of the vendors. The training required by this subdivision shall comply with the following:
4.13(i) the training shall be delivered to all employees and authorized representatives of
4.14the vendors who sell or offer portable electronics insurance;
4.15(ii) the training may be provided in electronic form. However, if conducted in an
4.16electronic form, the supervisingagency entity shall implement a supplemental education
4.17programof in-person training regarding the portable electronics insurance product that is
4.18conducted by licensed employees of the supervisingagency to supplement the electronic
4.19training entity; and
4.20(iii) each employee and authorized representative shall receive basic instruction
4.21about the portable electronics insurance offered to customers and the disclosures required
4.22under subdivision 3; and
4.23(3) no employee or authorized representative of a vendor of portable electronics
4.24shall advertise, represent, or otherwise hold himself or herself out as a nonlimited lines
4.25licensed insurance producer.
4.26(b) The charges for portable electronics insurance coverage may be billed and
4.27collected by the vendor of portable electronics.If billed and collected by the vendor, the
4.28charges Any charge to the covered customer for coverage that is not included in the cost
4.29associated with the purchase or lease of portable electronics or services shall be separately
4.30itemized from the charges for the purchase or lease of portable electronics or services.
4.31If the portable electronics insurance coverage is included with the purchase or lease of
4.32portable electronics or related services, the vendor shall clearly and conspicuously disclose
4.33to the enrolled customer that the portable electronics insurance coverage is included
4.34with the portable electronics or related services, and shall provide the customer with
4.35the option of declining the coverage and purchasing the portable electronics or related
4.36services separately. Vendors billing and collecting such charges shall not be required to
5.1maintain such funds in a segregated account provided that the vendor is authorized by
5.2the insurer to hold such funds in an alternative manner and remits such amounts to the
5.3supervisingagency entity within 60 days of receipt. All funds received by a vendor from
5.4a customer for the sale of portable electronics insurance shall be considered funds held
5.5by the vendor in a fiduciary capacity for the benefit of the insurer. Vendors may receive
5.6compensation for billing and collection services.
5.7(c)(1) Whenever notice or correspondence with respect to a policy of portable
5.8electronics insurance is required pursuant to the policy or is otherwise required by law, the
5.9notice or correspondence may be sent either by mail or by electronic means in accordance
5.10with chapter 325L. If the notice or correspondence is mailed, it must be sent to the
5.11vendor at the vendor's mailing address specified for this purpose and to affected covered
5.12customers at their last known mailing addresses on file with the insurer. If the notice or
5.13correspondence is sent by electronic means, it must be sent to the vendor at the vendor's
5.14electronic mail address specified for such purpose and to affected covered customers at
5.15their last known electronic mail addresses as provided to the insurer or vendor, as the case
5.16may be. A covered customer's provision of an electronic mail address to the insurer or
5.17vendor, as the case may be, is deemed consent to receive notices and correspondence
5.18by electronic means as long as a disclosure is provided to the customer at the time the
5.19electronic mail address is provided indicating the same.
5.20(2) Notice or correspondence required by a policy of portable electronics insurance
5.21or otherwise required by law may be sent on behalf of an insurer or vendor, as the case
5.22may be, by the supervising entity appointed by the insurer.
5.23EFFECTIVE DATE.This section is effective January 1, 2013.
1.3Minnesota Statutes 2010, section 60K.381.
1.4BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.5 Section 1. Minnesota Statutes 2010, section 60K.381, is amended to read:
1.660K.381 SALE OF PORTABLE ELECTRONICS INSURANCE.
1.7 Subdivision 1. Definitions. For purposes of this section, the following terms have
1.8the following meanings:
1.9(a) "Customer" means a person who purchases portable electronics or services.
1.10(b) "Covered customer" means a customer who elects coverage under a portable
1.11electronics insurance policy issued to a vendor of portable electronics.
1.12(c) "Portable electronics" means electronic devices that are portable in nature, their
1.13accessories, and services related to the use of the device.
1.14(d)(1) "Portable electronics insurance" means insurance providing coverage for
1.15the repair or replacement of portable electronics, which may cover portable electronics
1.16against any one or more of the following causes of loss: loss, theft, mechanical failure,
1.17malfunction, damage, or other applicable perils.
1.18(2) "Portable electronics insurance" does not include:
1.19(i) a service contract governed by chapter 59B;
1.20(ii) a policy of insurance covering a seller's or a manufacturer's obligations under
1.21a warranty; or
1.22(iii) a homeowner's, renter's, private passenger automobile, commercial multiperil,
1.23or similar policy that covers loss or theft of portable electronics.
1.24(e) "Portable electronics transaction" means:
2.1(1) the sale or lease of portable electronics by a vendor to a customer; or
2.2(2) the sale of a service related to the use of portable electronics by a vendor to a
2.3customer.
2.4(f) "Supervising
2.5or insurance producer that is appointed by an insurer to supervise the administration of a
2.6portable electronics insurance program.
2.7(g) "Vendor" means a business entity in the business of engaging in portable
2.8electronics transactions, directly or indirectly.
2.9 Subd. 2. Licensure of vendors. (a) A vendor is required to hold a limited lines
2.10license issued under this section to sell or offer coverage under a policy of portable
2.11electronics insurance in connection with, and incidental to, a portable electronics
2.12transaction with a customer.
2.13(b) A limited lines license issued under this section shall authorize any employee or
2.14authorized representative of the vendor to sell or offer coverage under a policy of portable
2.15electronics insurance to a customer in connection with, and incidental to, a portable
2.16electronics transaction at each location at which the vendor engages in portable electronics
2.17transactions. The application for such a limited lines license shall
2.18
2.19
2.20
2.21(1) provide the name, residence address, and other information required by the
2.22commissioner for an employee or officer of the vendor that is designated by the applicant
2.23as the person responsible for the vendor's compliance with the requirements of this
2.24chapter. However, if the vendor derives more than 50 percent of its revenue from the sale
2.25of portable electronics insurance, the information noted above must be provided for all
2.26officers, directors, and shareholders of record having beneficial ownership of ten percent or
2.27more of any class of securities of the vendor registered under the federal securities law; and
2.28(2) contain a statement by the applicant indicating whether it intends to offer
2.29portable electronics from more than ten locations in this state. For purposes of this section,
2.30a vendor offering coverage to customers through a Web site is deemed to be offering
2.31portable electronics insurance coverage from more than ten locations.
2.32(c) A vendor, or the supervising entity that is appointed to oversee the vendor's
2.33portable electronics insurance program, shall maintain a registry of locations which are
2.34authorized to sell or solicit portable electronics insurance coverage in this state. Upon
2.35request by the commissioner and within ten days' notice to the vendor or supervising
2.36entity, the registry must be made available for inspection by the commissioner.
3.1(d) Notwithstanding any other provision of law, a license issued pursuant to this
3.2section shall authorize the licensee and its employees or authorized representatives to
3.3engage only in those activities that are expressly permitted in this section.
3.4 Subd. 3. Requirements for sale of portable electronics insurance. (a) At every
3.5location where portable electronics insurance is offered to customers, brochures or other
3.6written materials must be made available to a prospective customer which:
3.7(1) disclose that portable electronics insurance may provide a duplication of
3.8coverage already provided by a customer's homeowner's insurance policy, renter's
3.9insurance policy, or other source of coverage;
3.10(2) state that the enrollment by the customer in a portable electronics insurance
3.11program is not required in order to purchase or lease portable electronics or services;
3.12(3) summarize the material terms of the insurance coverage, including:
3.13(i) the identity of the insurer;
3.14(ii) the identity of the supervising
3.15(iii) the amount of any applicable deductible and how it is to be paid;
3.16(iv) benefits of the coverage;
3.17(v) the terms for terminating or modifying coverage as set forth in the policy of
3.18portable electronics insurance; and
3.19(vi) any material exclusions, conditions, or other limitations of coverage including
3.20whether portable electronics may be repaired or replaced with similar make and model
3.21reconditioned or nonoriginal manufacturer parts or equipment;
3.22(4) describe the process for filing a claim, including a description of any
3.23requirements:
3.24(i) to return portable electronics and the maximum fee applicable in the event the
3.25customer fails to comply with any equipment return requirements; and
3.26(ii) any proof of loss requirements; and
3.27(5) state that the customer may cancel enrollment for coverage under a portable
3.28electronics insurance policy at any time and any unearned premium will be refunded or
3.29credited on a pro rata basis to the person paying the premium.
3.30(b) Portable electronics insurance may be offered on a month-to-month or other
3.31periodic basis as a group or master commercial inland marine policy issued to a vendor of
3.32portable electronics under which individual customers may elect to enroll for coverage.
3.33(c) Notwithstanding any other provision of Minnesota law regarding the termination
3.34or modification of coverage under a policy of insurance, the terms for the termination
3.35or modification of coverage under a policy of portable electronics insurance issued in
3.36compliance with this chapter shall be as set forth in the policy.
4.1(d) Eligibility and underwriting standards for customers electing to enroll in
4.2coverage shall be established for each portable electronics insurance program.
4.3 Subd. 4. Authority of vendors of portable electronics. (a) The employees and
4.4authorized representatives of vendors may sell or offer portable electronics insurance to
4.5customers and shall not be subject to licensure as an insurance producer under this chapter
4.6provided that:
4.7(1) the vendor obtains a limited lines license to authorize its employees or authorized
4.8representatives to sell or offer portable electronics insurance pursuant to this section;
4.9(2) the insurer issuing the portable electronics insurance either directly supervises
4.10or appoints a supervising
4.11including development of a training program for employees and authorized representatives
4.12of the vendors. The training required by this subdivision shall comply with the following:
4.13(i) the training shall be delivered to all employees and authorized representatives of
4.14the vendors who sell or offer portable electronics insurance;
4.15(ii) the training may be provided in electronic form. However, if conducted in an
4.16electronic form, the supervising
4.17program
4.18conducted by licensed employees of the supervising
4.19
4.20(iii) each employee and authorized representative shall receive basic instruction
4.21about the portable electronics insurance offered to customers and the disclosures required
4.22under subdivision 3; and
4.23(3) no employee or authorized representative of a vendor of portable electronics
4.24shall advertise, represent, or otherwise hold himself or herself out as a nonlimited lines
4.25licensed insurance producer.
4.26(b) The charges for portable electronics insurance coverage may be billed and
4.27collected by the vendor of portable electronics.
4.28
4.29associated with the purchase or lease of portable electronics or services shall be separately
4.30itemized from the charges for the purchase or lease of portable electronics or services.
4.31If the portable electronics insurance coverage is included with the purchase or lease of
4.32portable electronics or related services, the vendor shall clearly and conspicuously disclose
4.33to the enrolled customer that the portable electronics insurance coverage is included
4.34with the portable electronics or related services, and shall provide the customer with
4.35the option of declining the coverage and purchasing the portable electronics or related
4.36services separately. Vendors billing and collecting such charges shall not be required to
5.1maintain such funds in a segregated account provided that the vendor is authorized by
5.2the insurer to hold such funds in an alternative manner and remits such amounts to the
5.3supervising
5.4a customer for the sale of portable electronics insurance shall be considered funds held
5.5by the vendor in a fiduciary capacity for the benefit of the insurer. Vendors may receive
5.6compensation for billing and collection services.
5.7(c)(1) Whenever notice or correspondence with respect to a policy of portable
5.8electronics insurance is required pursuant to the policy or is otherwise required by law, the
5.9notice or correspondence may be sent either by mail or by electronic means in accordance
5.10with chapter 325L. If the notice or correspondence is mailed, it must be sent to the
5.11vendor at the vendor's mailing address specified for this purpose and to affected covered
5.12customers at their last known mailing addresses on file with the insurer. If the notice or
5.13correspondence is sent by electronic means, it must be sent to the vendor at the vendor's
5.14electronic mail address specified for such purpose and to affected covered customers at
5.15their last known electronic mail addresses as provided to the insurer or vendor, as the case
5.16may be. A covered customer's provision of an electronic mail address to the insurer or
5.17vendor, as the case may be, is deemed consent to receive notices and correspondence
5.18by electronic means as long as a disclosure is provided to the customer at the time the
5.19electronic mail address is provided indicating the same.
5.20(2) Notice or correspondence required by a policy of portable electronics insurance
5.21or otherwise required by law may be sent on behalf of an insurer or vendor, as the case
5.22may be, by the supervising entity appointed by the insurer.
5.23EFFECTIVE DATE.This section is effective January 1, 2013.
