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Regular Session, 2012
SENATE BILL NO. 167
BY SENATOR GARY SMITH
INSURANCE POLICIES. Provides for portable electronics insurance policies. (8/1/12)
AN ACT1
To enact R.S. 22:1431 through 1437, relative to portable electronics insurance; to provide2
definitions; to provide with respect to the vendors of portable electronic devices; to3
provide for the requirements for the sale of portable electronics insurance; to provide4
with respect to termination of portable electronics insurance; and to provide for5
related matters.6
Be it enacted by the Legislature of Louisiana:7
Section 1. R.S. 22:1431 through 1437 are hereby enacted to read as follows: 8
§1431. Definitions9
As used in this Subpart, the following terms shall have the following10
meanings:11
(1) "Commissioner" means the commissioner of insurance.12
(2) "Customer" means a person who purchases portable electronics or13
services.14
(3) "Department" means the department of insurance.15
(4) "Enrolled customer" means a customer who elects coverage under16
a portable electronics insurance policy issued to a vendor of portable17 SB NO. 167
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electronics.1
(5) "Location" means any physical location in the state of Louisiana or2
any website, call center site, or similar location directed to residents of the state3
of Louisiana.4
(6) "Portable electronics" means electronic devices that are portable in5
nature, their accessories, and services related to the use of the device.6
(7)(a) "Portable electronics insurance" means insurance providing7
coverage for the repairs or replacement of portable electronics which may8
provide coverage for portable electronics against any one or more of the9
following causes of loss: loss, theft, inoperability due to mechanical failure,10
malfunction, damage, or other similar causes of loss.11
(b) "Portable electronics insurance" does not include any of the12
following:13
(i) A service contract or extended warranty providing coverage limited14
to the repair, replacement, or maintenance of property for the operational or15
structural failure of such property due to a defect in materials, workmanship,16
accidental damage from handling power surges, or normal wear and tear.17
(ii) A policy of insurance covering a seller's or a manufacturer's18
obligations under a warranty.19
(iii) A homeowner's, renter's, private passenger automobile, commercial20
multi-peril, or similar policy.21
(8) "Portable electronics transaction" means any of the following:22
(a) The sale or lease of portable electronics by a vendor to a customer.23
(b) The sale of a service related to the use of portable electronics by a24
vender to a customer.25
(9) "Supervising entity" means a business entity that is a licensed26
insurer or insurance producer that is authorized by an insurer to supervise the27
administration of a portable electronics insurance program.28
(10) "Vendor" means a person in the business of engaging in portable29 SB NO. 167
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electronics transactions directly or indirectly.1
§1432. Licensure of vendors2
Notwithstanding any other provision of law to the contrary, the following3
requirements apply to the licensure of vendors of portable electronic devices:4
(1) A vendor is required to hold a limited lines license to sell or offer5
coverage under a policy of portable electronics insurance.6
(2) A limited lines license issued pursuant to this Section shall authorize7
any employee or authorized representative of the vendor to sell or offer8
coverage under a policy of portable electronics insurance to a customer at each9
location at which the vendor engages in portable electronics transactions.10
(3) The supervising entity shall maintain a registry of vendor locations11
which are authorized to sell or solicit portable electronics insurance coverage12
in this state. Upon request by the commissioner and with ten days' notice to the13
supervising entity, the registry shall be open to inspection and examination by14
the commissioner during regular business hours of the supervising entity.15
(4) Notwithstanding any other provision of law to the contrary, a license16
issued pursuant to this Subpart shall authorize the licensee and its employees17
or authorized representatives to engage in those activities that are permitted in18
this Subpart.19
§1433. Requirements for sale of portable electronics insurance20
A. At every location where portable electronics insurance is offered to21
customers, brochures or other written materials shall be made available to a22
prospective customer which:23
(1) Disclose that portable electronics insurance may provide a24
duplication of coverage already provided by a customer's homeowner's25
insurance policy, renter's insurance policy, or other source of coverage.26
(2) State that the enrollment by the customer in a portable electronics27
insurance program is not required in order to purchase or lease portable28
electronics or services.29 SB NO. 167
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(3) Summarize the material terms of the insurance coverage, including:1
(a) The identity of the insurer.2
(b) The identity of the supervising entity.3
(c) The amount of any applicable deductible and how it is to be paid.4
(d) The benefits of the coverage.5
(e) The key terms and conditions of coverage such as whether portable6
electronics may be repaired or replaced with similar make and model7
reconditioned or non-original manufacturer parts or equipment.8
(4) Contain a summary of the process for filing a claim, including a9
description of how to return portable electronics and the maximum fee10
applicable in the event the customer fails to comply with any equipment return11
requirement.12
(5) Contain a statement that an enrolled customer may cancel13
enrollment for coverage under a portable electronics insurance policy at any14
time and the person paying the premium shall receive a refund of any15
applicable unearned premium.16
B. Portable electronics insurance may be offered on a month-to-month17
or other periodic basis as a group or master commercial inland marine policy18
issued to a vendor of portable electronics for its enrolled customers.19
C. Eligibility and underwriting standards for customers electing to20
enroll in coverage shall be established for each portable electronics insurance21
program.22
§1434. Authority of vendors of portable electronics23
A. An employee or authorized representative of a vendor may sell or24
offer portable electronics insurance to customers and shall not be subject to25
licensure as an insurance producer under this Subpart provided that:26
(1) The vendor obtains a limited lines license to authorize its employees27
or authorized representatives to sell or offer portable electronics insurance28
pursuant to this Subpart.29 SB NO. 167
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(2) The insurer issuing the portable electronics insurance either directly1
supervises or appoints a supervising entity to supervise the administration of2
the program including development of a training program for employees and3
authorized representatives of the vendors. The training required by this4
Paragraph shall comply with all of the following:5
(a) The training shall be delivered to employees and authorized6
representatives of vendors who are directly engaged in the activity of selling or7
offering portable electronics insurance.8
(b) The training may be provided in electronic form. However, if9
conducted in an electronic form, the supervising entity shall implement a10
supplemental education program regarding the portable electronics insurance11
product that is conducted and overseen by licensed employees of the supervising12
entity.13
(c) Each employee and authorized representative shall receive basic14
instruction about the portable electronics insurance offered to customers and15
the disclosures required under this Subpart.16
(d) No employee or authorized representative of a vendor of portable17
electronics shall advertise, represent, or otherwise hold himself or herself out18
as a non limited lines licensed insurance producer.19
B. Notwithstanding any other provision of law to the contrary,20
employees or authorized representatives of a vendor of portable electronics21
shall not be compensated based primarily on the number of customers enrolled22
for portable electronics insurance coverage but may receive compensation for23
activities under the limited lines license which is incidental to their overall24
compensation.25
C. The charges for portable electronics insurance coverage may be26
billed and collected by the vendor of portable electronics. Any charge to the27
enrolled customer for coverage that is not included in the cost associated with28
the purchase or lease of portable electronics or related services shall be29 SB NO. 167
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separately itemized on the enrolled customer's bill. If the portable electronics1
insurance coverage is included with the purchase or lease of portable electronics2
or related services, the vendor shall clearly and conspicuously disclose to the3
enrolled customer that the portable electronics insurance coverage is included4
with the portable electronics or related services. Vendors billing and collecting5
such charges shall not be required to maintain such funds in a segregated6
account provided that the vendor is authorized by the insurer to hold such7
funds in an alternative manner and remits such amounts to the supervising8
entity within sixty days of receipt. All funds received by a vendor from an9
enrolled customer for the sale of portable electronics insurance shall be10
considered funds held in trust by the vendor in a fiduciary capacity for the11
benefit of the insurer. Vendors may receive compensation for billing and12
collection services.13
§1435. Suspension or revocation of license14
If a vendor of portable electronics or its employee or authorized15
representative violates any provisions of this Section, the commissioner may16
take any of the following actions:17
(1) After notice and hearing, impose fines not to exceed five hundred18
dollars per violation or five thousand dollars in the aggregate for such conduct.19
(2) After notice and hearing, impose other penalties that the20
commissioner deems necessary and reasonable to carry out the purpose of this21
Subpart including:22
(a) Suspending the privilege of transacting portable electronics insurance23
pursuant to this Subpart at specific business locations where violations have24
occurred.25
(b) Suspending or revoking the ability of individual employees or26
authorized representatives to act under the license.27
§1436. Termination of portable electronics insurance28
A. Notwithstanding any other provision of law to the contrary, an29 SB NO. 167
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insurer may terminate or otherwise change the terms and conditions of a policy1
of portable electronics insurance only upon providing the policyholder and2
enrolled customers with at least thirty days' notice.3
B. If the insurer changes the terms and conditions, then the insurer shall4
provide the vendor policyholder with a revised policy or endorsement and each5
enrolled customer with a revised certificate, endorsement, updated brochure,6
or other evidence indicating a change in the terms and conditions has occurred7
and a summary of any material change.8
C. Notwithstanding Subsection A of this Section, an insurer may9
terminate an enrolled customer's enrollment under a portable electronics10
insurance policy upon fifteen days' notice for discovery of fraud or material11
misrepresentation in obtaining coverage or in the presentation of a claim12
thereunder.13
D. Notwithstanding Subsection A of this Section, an insurer may14
immediately terminate an enrolled customer's enrollment under a portable15
electronics insurance policy:16
(1) For nonpayment of premium.17
(2) If the enrolled customer ceases to have an active service with the18
vendor of portable electronics.19
(3) If an enrolled customer exhausts the aggregate limit of liability, if20
any, under the terms of the portable electronics insurance policy and the insurer21
sends notice of termination to the enrolled customer within thirty calendar days22
after exhaustion of the limit. However, if notice is not timely sent, enrollment23
shall continue notwithstanding the aggregate limit of liability until the insurer24
sends notice of termination to the enrolled customer.25
E. Where a portable electronics insurance policy is terminated by a26
policyholder, the policyholder shall mail or deliver written notice to each27
enrolled customer advising the enrolled customer of the termination of the28
policy and the effective date of termination. The written notice shall be mailed29 SB NO. 167
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or delivered to the enrolled customer at least thirty days prior to the1
termination.2
F. Whenever notice or correspondence with respect to a policy of3
portable electronics insurance is required pursuant to this Section or is4
otherwise required by law, it shall be in writing and sent within the notice5
period, if any, specified within the statute or regulation requiring the notice or6
correspondence. Notwithstanding any other provision of law to the contrary,7
notices and correspondence may be sent either by mail or by electronic means8
as set forth in this Section. If the notice or correspondence is mailed, it shall be9
sent to the vendor of portable electronics at the vendor's mailing address on file10
with the insurer. The insurer or vendor of portable electronics shall maintain11
proof of mailing in a form authorized or accepted by the United States Postal12
Service or other commercial mail delivery service. If the notice or13
correspondence is sent electronically, it shall be sent to the vendor of portable14
electronics at the vendor's electronic mail address specified for such purpose15
and to its affected enrolled customers' last known electronic mail addresses or16
as provided by each enrolled customer to the insurer or vendor of portable17
electronics. For purposes of this Section, an enrolled customer's provision of an18
electronic mail address to the insurer or vendor of portable electronics shall be19
deemed consent to receive notices and correspondence by electronic means. The20
insurer or vendor of portable electronics, shall maintain proof that the notice21
or correspondence was sent.22
G. Notice or correspondence required by this Section or otherwise23
required by law may be sent on behalf of an insurer or vendor by the24
supervising entity appointed by the insurer.25
§1437. Application for license and fees26
A. A sworn application for a license pursuant to this Section shall be27
made to and filed with the commissioner on forms prescribed and furnished by28
the commissioner.29 SB NO. 167
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B. The application shall:1
(1) Provide the name, residence address, and other information required2
by the commissioner for an employee or officer of the vendor that is designated3
by the applicant as the person responsible for the vendor's compliance with the4
requirements of this Subpart. However, if the vendor derives more than fifty5
percent of its revenue from the sale of portable electronics insurance the6
information noted above shall be provided for all officers, directors, and7
shareholders of record having beneficial ownership of ten percent or more of8
any class of securities registered under the federal securities law.9
(2) Provide the location of the applicant's home office.10
C. Any vendor engaging in portable electronics insurance transactions11
on or before the effective date of this Subpart shall apply for licensure within12
ninety days of the application being made available by the commissioner.13
D. Initial licenses issued pursuant to this Section shall be valid for a14
period of twenty-four months and expire on December thirty-first of the15
renewal year assigned by the commissioner.16
E. Each vendor of portable electronics licensed under this Subpart shall17
pay to the department a fee as prescribed by the commissioner but in no event18
shall the fee exceed one thousand dollars for an initial portable electronics19
limited lines license and five hundred dollars for each renewal thereof.20
However, for a vendor that is engaged in portable electronics transactions at ten21
or fewer locations in the state, the fee shall not exceed one hundred dollars for22
an initial license and for each renewal thereof.23
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Cheryl Horne.
DIGEST
Provides for portable electronics insurance policies.
Effective August 1, 2012.
(Adds R.S. 22:1431 through 1437)