Portable electronic device insurance.

WORKING DRAFT
2012
STATE OF
WYOMING
12LSO-0129

HOUSE BILL
NO.
HB0044

Portable electronic device insurance.

Sponsored by:

Representative(s) Illoway, Blikre, Moniz and Stubson and Senator(s) Emerich and Perkins

A BILL

for

AN ACT relating to
insurance; providing for licensure of vendors selling portable electronics insurance; providing requirements for portable electronics insurance policies; providing an exemption of insurance producer licensure;
and providing for an effective date.

Be It Enacted by the Legislature of the State of Wyoming:

Section 1.
W.S. 26
‑
51
‑
101 through 26
‑
51
‑
108 are created to read:

CHAPTER 51
PORTABLE ELECTRONICS LIMITED PRODUCER LICENSES

26
‑
51
‑
101.

Short title.

This chapter shall be known as the
"
Portable Electronics Limited Producer License Act
.
"

26
‑
51
‑
102.

Definitions.

(a)

For purposes of this act:

(i)

"
Customer
"
means a person who purchases portable electronics or services;

(ii)

"
Enrolled customer
"
means a customer who elects coverage under a portable electronics insurance policy issued to a vendor of portable electronics;

(iii)

"
Location
"
means any physical location in the state of Wyoming or any website, call center site or similar location directed to residents of the state of Wyoming;

(iv)

"
Portable electronics
"
means electronic devices that are portable in nature, their accessories and services related to the use of the device;

(v)

"
Portable electronics insurance
"
means insurance providing coverage for the repair or replacement of portable electronics which may provide coverage for portable electronics against any one (1) or more of the following causes of loss: loss, theft, inoperability due to mechanical failure, malfunction, damage or other similar causes of loss.
"
Portable electronics insurance
"
does not include a service contract governed by W.S. 26
‑
49
‑
101;

(vi)

"
Portable electronics transaction
"
means:

(A)

The sale or lease of portable electronics by a vendor to a customer; or

(B)

The sale of a service related to the use of portable electronics by a vendor to a customer.

(vii)

"
Supervising entity
"
means a business entity that is a licensed insurer or insurance producer that is appointed or authorized by an insurer to supervise the administration of a portable electronics insurance program;

(viii)

"
Vendor
"
means a person in the business of engaging in portable electronics transactions directly or indirectly.

26
‑
51
‑
103.

Licensure of vendors.

(a)

A vendor shall hold a limited lines license to sell or offer coverage under a policy of portable electronics insurance.

(b)

A portable electronics limited lines license issued under this chapter shall authorize any employee or authorized representative of the vendor to sell or offer coverage under a policy of portable electronics insurance to a customer at each location at which the vendor engages in portable electronics transactions.

(c)

The supervising entity shall maintain a registry of vendor locations which are authorized to sell or solicit portable electronics insurance coverage in this state. Upon request by the commissioner and with ten (10) days
written
notice to the supervising entity, the registry shall be open to inspection and examination by the
commissioner
during regular business hours of the supervising entity.

(
d
)

Notwithstanding any other provision of law, a license issued pursuant to this section shall authorize the licensee and its employees or authorized representatives to engage in those activities that are permitted in this section.

26
‑
51
‑
104.

Requirements for sale of portable electronics insurance.

(
a
)

At every location where portable electronics insurance is offered to customers, brochures or other written materials
shall
be made available to a prospective customer which:

(
i
)

D
isclose 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;

(ii
)

S
tate that the enrollment by the customer in a portable electronics insurance program is not required
in order to purchase or lease portable electronics or services;

(iii)

S
ummarize the material terms of the insurance coverage, including:

(A
)

T
he identity of the insurer;

(B)

T
he ide
ntity of the supervising entity;

(C)

The
amount of any applicable deductible and how it is to be paid;

(D)

B
enefits of the coverage; and

(E)

K
ey terms and conditions of coverage such as whether portable electronics may be repaired or replaced with similar make and model reconditioned or nonoriginal manufacturer parts or equipment.

(iv)

S
ummarize 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
;

(v
)

S
tate 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 of any applicable unearned premium.

(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 program.

26
‑
51
‑
105.

Authority of vendors of portable electronics.

(
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
provided that:

(i)

T
he vendor obtains a
portable electronics
limited lines license to authorize its employees or authorized representatives to sell or offer portable electronics insurance pursuant to this section;

(
ii
)

T
he insurer issuing the portable electronics insurance either directly supervises or appoints a supervising entity to supervise the administration of the program including development of a training program for employees and authorized representatives of the vendors.

The training required by this
paragraph
shall comply with the following:

(A
)

T
he training shall be delivered to employees and authori
zed representatives of a vendor
who are directly engaged in the activity of selling or offering
portable electronics insurance;

(
B
)

T
he training may be provided in electronic form. However, if conducted in an electronic form the supervising entity shall implement a supplemental
education program regarding the portable electronics insurance product that is conducted and overseen by licensed employees of the supervising entity; and

(
C
)

E
ach employee and authorized representative shall receive basic instruction about the portable electronics insurance offered to customers and the disclosures required under
W.S. 26
‑
51
‑
104.

(
iii
)

N
o employee or authorized representative of a vendor of portable electronics shall advertise, represent or otherwise hold himself out as a
nonportable
electronics
limited lines licensed insurance producer.

(
b
)

The charges for portable electronics insurance coverage may be billed and collected by the vendor of portable electronics. 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. Vendors billing and collecting such charges shall not be required to maintain such funds in a segregated account provided that the vendor is authorized by the insurer to hold such funds in an alternative manner and remits such amounts to the supervising entity within sixty (60) days of receipt.

All funds received by a vendor from an enrolled customer for the sale of portable electronics insurance shall be considered funds held in trust by the vendor in a fiduciary capacity for the benefit of the insurer.

Vendors may receive compensation for billing and collection services.

26
‑
51
‑
106.

Suspension or
r
evocation of
l
icense
.

(
a
)

If a vendor of portable electronics or its employee or authorized representative violates any provision of this section, the commissioner may do any of the following:

(i
)

After notice and hearing, impose
a civil
penalty
not to exceed
five hundred dollars (
$500
.00)
per
violation or
five thousand dollars (
$5,000
.00)
in
the aggregate for such conduct;

(
ii
)

After notice and hearing, impose other penalties that the commissioner deems necessary and reasonable to carry out the pur
pose of this article, including:

(
A
)

S
uspending the privilege of transacting portable electronics insurance pursuant to this section at specific business locations wher
e violations have occurred; and

(
B
)

S
uspending or revoking the ability of individual employees or authorized representatives to act under the license.

26
‑
51
‑
107.

Termination of portable
e
lectronics
i
nsurance
.

(
a
)

An insurer may terminate or otherwise change the terms and conditions of a policy of portable electronics insurance only upon providing the policyholder and enrolled customers with at least thirty (30) days
written notice.

(
b
)

If the insurer changes the terms and conditions, then the insurer shall provide the vendor policyholder with a revised policy or endorsement
,
and each enrolled customer with a revised certificate, endo
rsement, updated brochure
or other evidence indicating a change in the terms and conditions has occurred an
d a summary of material changes.

(
c
)

Notwithstanding
subsection (a)
of this section, an insurer may terminate an enrolled customer
'
s enrollment under a portable electronics insurance policy upon fifteen (15) days
written
notice for discovery of fraud or material misrepresentation in obtaining coverage or in the presentation of a claim thereunder.

(
d
)

Notwithstanding
subsection (a)
of this section, an insurer may immediately terminate an enrolled customer
'
s enrollment under a portable electronics insurance policy:

(
i
)

For nonpayment of premium;

(ii)

I
f the enrolled customer ceases to have an active service with the vendor of portable electronics; or

(iii)

I
f 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 (30) calendar days after exhaustion of the limit. However, 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.

(
e
)

Where a portable electronics insurance policy is terminated by a policyholder, the policyholder 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 (30) days prior to the termination.

(
f
)

Whenever 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 within the statute or regulation
requiring the notice or correspondence. Notwithstanding any other provision of law, notices and correspondence may be sent either by mail or by electronic means as set forth in this
subsection
. If the notice or correspondence is mailed, it shall be sent to the vendor of portable electronics 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 of portable electronics, as the case may be, shall maintain proof of mailing in a form authorized or accepted by the United States
p
ostal
s
ervice or other commercial mail delivery service. If the notice or correspondence is sent by electronic means, it shall be sent to the vendor of portable electronics at the vendor
'
s electronic mail address specified for such purpose and to its affected enrolled customers
'
last known electronic mail address as provided by each enrolled customer to the insurer or vendor of portable electronics, as the case may be. For purposes of this
subsection
, an enrolled customer
'
s provision of an electronic mail address to the insurer or vendor of portable electronics, as the case may be, shall be deemed
to have
consent
ed
to receive notices and correspondence by electronic means. The insurer or
vendor of portable electronics, as the case may be, shall maintain proof that the notice or correspondence was sent.

(
g
)

Notice or correspondence required by this section or otherwise required by law may be sent on behalf of an insurer or vendor, as the case may be, by the supervising entity appointed by the insurer.

26
‑
51
‑
108.

A
pplication for
l
icense and
f
ees.

(a)

A sworn application for a license under this chapter shall be made to and filed with the commissioner on forms prescribed and furnished by the commissioner.

(b)

The application shall:

(i)

Provide the name, residence address and other information required by the commissioner for an employee or officer of the vendor that is designated by the applicant as the person responsible for the vendor
'
s compliance with the requirements of this chapter. However, if the vendor derives more than fifty percent (50%) of its revenue from the sale of portable electronics insurance the information noted above shall be provided for all officers,
directors and any shareholder of record having beneficial ownership of ten percent (10%) or more of any class of securities registered under the federal securities law; and

(ii)

Provide t
he location of the applicant
'
s home office.

(c)

Any vendor engaging in portable electronics insurance transactions on or before July 1, 2012
shall
apply for licensure within ninety (90) days of the application being made available by the commissioner. Any applicant commencing operations after July 1, 2012 shall obtain a license prior to offering portable electronics insurance.

(d)

Initial licenses issued pursuant to this chapter shall be valid for a period of
no more than
twenty-four (24) months and
shall
expire on December 1 of the renewal year assigned by the commissioner.

(e)

Each vendor of portable electronics licensed under this chapter shall pay to the commissioner a fee as prescribed by the
commissioner
but in no event shall the fee exceed
one thousand dollars (
$1,000
.00)
for an initial
portable electronics limited lines license and
five hundred dollars (
$500
.00)
for each renewal thereof. However, for a vendor that is engaged in portable electronics transactions at ten
(10)
or fewer locations in the state the fee shall not exceed
one hundred dollars (
$100
.00)
for an initial license and for each renewal thereof.

Section 2.
W.S. 26
‑
49
‑
101(d)(ii)
, (iii)
and by creating a new paragraph (iv) is amended to read:

26
‑
49
‑
101.

Scope and purposes.

(d)

This article does not apply to:

(ii)

To mechanical breakdown insurance organizations who maintain a license pursuant to W.S. 26
‑
37
‑
106;

or

(iii)

To motor club services regulated pursuant to the Motor Club Services Act
;
.

or

(iv)

Portable electronics limited lines
vendors
licensed pursuant to chapter 51 of this code
.

Section
3
.
This act is effective July 1, 2012.

(END)

1
HB0044