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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. 22:821(B)(34) and 1431, and Part VIII-A of Chapter 5 of Title 22 of the2
Louisiana Revised Statutes of 1950, to be comprised of R.S. 22:1781.1 through3
1781.6, relative to portable electronics insurance; to provide definitions; to provide4
with respect to the vendors of portable electronic devices; to provide for the5
requirements for the sale of portable electronics insurance; to provide with respect6
to termination of portable electronics insurance; and to provide for related matters.7
Be it enacted by the Legislature of Louisiana:8
Section 1. R.S. 22:821(B)(34) and 1431, and Part VIII-A of Chapter 5 of Title 229
of the Louisiana Revised Statutes of 1950, to be comprised of R.S. 22:1781.1 through 1781.610
are hereby enacted to read as follows: 11
§821. Fees12
* * *13
B. The following fees and licenses shall be collected in advance by the14
commissioner of insurance:15
* * *16
(34) Portable Electronics Insurance Limited Lines License17 SB NO. 167
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(a) Initial license application......$2001
(b) Renewal...................................$1002
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§1431. Portable Electronics Insurance Policies4
A. Portable electronics insurance as defined in R.S. 22:1780.1(7) may be5
offered on a month-to-month or other periodic basis as a group or master6
commercial insurance policy issued to a vendor and defined in R.S. 22:1780.1(9)7
of portable electronics for its enrolled customers.8
B. Notwithstanding any other provision of law to the contrary, an insurer9
may terminate or otherwise change the terms and conditions of a policy of10
portable electronics insurance only upon providing the policyholder and11
enrolled customers with at least thirty days' written notice.12
C. If the insurer changes the terms and conditions of a policy, then the13
insurer shall provide the vendor policyholder with a revised policy or14
endorsement and each enrolled customer with a revised certificate,15
endorsement, updated brochure, or other evidence indicating a change in the16
terms and conditions has occurred and a summary of any material change.17
D. Notwithstanding Paragraph B of this Section, an insurer may18
terminate an enrolled customer's enrollment under a portable electronics19
insurance policy upon fifteen days' written notice for discovery of fraud or20
material misrepresentation in obtaining coverage or in the presentation of a21
claim thereunder.22
E. Notwithstanding Paragraph B of this Section, an insurer may23
immediately terminate an enrolled customer's enrollment under a portable24
electronics insurance policy: 25
(1) For nonpayment of premium. 26
(2) If the enrolled customer ceases to have an active service with the27
vendor of portable electronics.28
(3) If the enrolled customer exceeds the aggregate limit of liability under29 SB NO. 167
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the terms of the portable electronics insurance policy.1
F. If an enrolled customer exhausts the aggregate limit of liability under2
the terms of the portable electronics insurance policy, the insurer shall send3
notice of termination to the enrolled customer within thirty calendar days after4
exhaustion of the limit and shall terminate the enrollment of that customer. If5
notice is not timely sent, coverage shall, continue notwithstanding the6
exhaustion of the aggregate limit of liability until the insurer sends notice of7
termination to the enrolled customer.8
G. Where a portable electronics insurance policy is terminated by a9
vendor, the vendor shall mail or deliver written notice to each enrolled10
customer advising the enrolled customer of the termination of the policy and the11
effective date of termination. The written notice shall be mailed or delivered to12
the enrolled customer at least thirty days prior to the termination.13
H. All notices or correspondence required by this Section or otherwise14
required by law shall be in writing. Notices and correspondence may be sent15
either by mail or by electronic means as set forth in this Section. If the notice or16
correspondence is mailed, it shall be sent to the vendor or the enrolled customer17
at the mailing address on file with the insurer or vendor. The insurer or vendor18
of portable electronics shall maintain proof of mailing in a form authorized or19
accepted by the United States Postal Service or other commercial mail delivery20
service. If the notice or correspondence is sent electronically, it shall be sent to21
the vendor of portable electronics at the vendor's electronic mail address22
specified for such purpose and to its affected enrolled customers' last known23
electronic mail addresses as provided by each enrolled customer to the insurer24
or vendor of portable electronics. For purposes of this Section, an enrolled25
customer's provision of an electronic mail address to the insurer or vendor of26
portable electronics shall be deemed consent to receive notices and27
correspondence by electronic means. The insurer or vendor of portable28
electronics, shall maintain proof that the notice or correspondence was sent.29 SB NO. 167
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I. Notice or correspondence required by this Section or otherwise1
required by law may be sent on behalf of an insurer or vendor by a person2
licensed as an insurance producer in this state or any other person with whom3
the insurer or vendor contracts to perform such services on their behalf.4
* * *5
PART VIII-A Portable Electronics Insurance6
§1781.1. Definitions7
As used in this Part, the following terms shall have the following8
meanings:9
(1) "Commissioner" means the commissioner of insurance.10
(2) "Customer" means a person who purchases portable electronics or11
services.12
(3) "Department" means the department of insurance.13
(4) "Enrolled customer" means a customer who elects coverage under14
a portable electronics insurance policy issued to a vendor of portable15
electronics.16
(5) "Location" means any physical location in the state of Louisiana or17
any website, call center site, or similar location directed to residents of the state18
of Louisiana.19
(6) "Portable electronics" means electronic devices that are portable in20
nature, their accessories, and services related to the use of the device.21
(7)(a) "Portable electronics insurance" means insurance providing22
coverage for the repairs or replacement of portable electronics which may23
provide coverage for portable electronics against any one or more of the24
following causes of loss: loss, theft, inoperability due to mechanical failure,25
malfunction, damage, or other similar causes of loss.26
(b) "Portable electronics insurance" does not include any of the27
following:28
(i) A service contract or extended warranty providing coverage limited29 SB NO. 167
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to the repair, replacement, or maintenance of property for the operational or1
structural failure of such property due to a defect in materials, workmanship,2
accidental damage from handling, power surges, or normal wear and tear.3
(ii) A policy of insurance covering a seller's or a manufacturer's4
obligations under a warranty.5
(iii) A homeowner's, renter's, private passenger automobile, commercial6
multi-peril, or similar policy.7
(8) "Portable electronics transaction" means any of the following:8
(a) The sale or lease of portable electronics by a vendor to a customer.9
(b) The sale of a service related to the use of portable electronics by a10
vender to a customer.11
(9) "Vendor" means a person in the business of engaging in portable12
electronics transactions directly or indirectly.13
§1781.2. Licensure of vendors14
Notwithstanding any other provision of law to the contrary, the following15
requirements apply to the licensure of vendors of portable electronic devices:16
(1) A vendor is required to hold a limited lines license to sell or offer17
coverage under a policy of portable electronics insurance.18
(2) A limited lines license issued pursuant to this Section shall authorize19
any employee or authorized representative of the vendor to sell or offer20
coverage under a policy of portable electronics insurance to a customer at each21
location at which the vendor engages in portable electronics transactions. The22
vendor shall be responsible for the conduct and actions related to the sale or23
offering of portable electronics insurance of all employees and authorized24
representatives and any payment of the premium for portable electronic25
insurance to an employee or authorized representative shall be deemed payment26
to the vendor.27
(3) In connection with a vendor's application for licensure and upon28
license renewal, the vendor shall provide a list to the commissioner of all29 SB NO. 167
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locations in the state at which it offers coverage.1
§1781.3. Requirements for sale of portable electronics insurance2
A. In conjunction with and at the time of the sale of every portable3
electronics insurance policy, the vendor shall present brochures or other written4
materials to a prospective customer which:5
(1) Disclose that portable electronics insurance may provide a6
duplication of coverage already provided by a customer's homeowner's7
insurance policy, renter's insurance policy, or other source of coverage.8
(2) State that the enrollment by the customer in a portable electronics9
insurance program is not required in order to purchase or lease portable10
electronics or services.11
(3) Summarize the material terms of the insurance coverage, including:12
(a) The identity of the insurer.13
(b) The amount of any applicable deductible and how it is to be paid.14
(c) The benefits of the coverage.15
(d) The key terms and conditions of coverage such as whether portable16
electronics may be repaired or replaced with similar make and model17
reconditioned or non-original manufacturer parts or equipment.18
(4) Contain a summary of the process for filing a claim, including a19
description of how to return portable electronics and the maximum fee20
applicable in the event the customer fails to comply with any equipment return21
requirement.22
(5) Contain a statement that an enrolled customer may cancel23
enrollment for coverage under a portable electronics insurance policy at any24
time and the person paying the premium shall receive a refund or credit of any25
applicable unearned premium.26
B. Eligibility and underwriting standards for customers electing to27
enroll in coverage shall be established for each portable electronics insurance28
program.29 SB NO. 167
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§1781.4. Authority of vendors of portable electronics1
A. An employee or authorized representative of a vendor may sell or2
offer portable electronics insurance to customers and shall not be subject to3
licensure as an insurance producer under this Part provided that:4
(1) The vendor obtains a limited lines license to authorize its employees5
or authorized representatives to sell or offer portable electronics insurance6
pursuant to this Part.7
(2) The vendor shall develop a training program for employees and8
authorized representatives of the vendor. The training required by this Section9
shall comply with all of the following:10
(a) The training shall be delivered to employees and authorized11
representatives of vendors who are directly engaged in the activity of selling or12
offering portable electronics insurance prior to the engagement in any sale or13
offer of portable electronics insurance to any customer by the employee or14
authorized representative.15
(b) The training may be provided in electronic form.16
(c) The training shall include instruction about the portable electronics17
insurance offered to customers and the disclosures required under this Part.18
B. Notwithstanding any other provision of law to the contrary,19
employees or authorized representatives of a vendor of portable electronics20
shall not be compensated based primarily on the number of customers enrolled21
for portable electronics insurance coverage but may receive compensation for22
activities under the limited lines license which is incidental to their overall23
compensation.24
C. The charges for portable electronics insurance coverage may be25
billed and collected by the vendor of portable electronics. Any charge to the26
enrolled customer for coverage that is not included in the cost associated with27
the purchase or lease of portable electronics or related services shall be28
separately itemized on the enrolled customer's bill. If the portable electronics29 SB NO. 167
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insurance coverage is included with the purchase or lease of portable electronics1
or related services, the vendor shall clearly and conspicuously disclose to the2
enrolled customer that the portable electronics insurance coverage is included3
with the portable electronics or related services. Vendors billing and collecting4
such charges shall not be required to maintain such funds in a segregated5
account provided that the vendor is authorized by the insurer to hold such6
funds in an alternative manner and remits such amounts to the supervising7
entity within sixty days of receipt. All funds received by a vendor from an8
enrolled customer for the sale of portable electronics insurance shall be9
considered funds held in trust by the vendor in a fiduciary capacity for the10
benefit of the insurer. Vendors may receive compensation for billing and11
collection services.12
§1781.5. Suspension or revocation of license13
If a vendor of portable electronics or its employee or authorized14
representative violates any provision of this Part or any other applicable15
provision of this Title, the commissioner may, after notice and opportunity for16
a hearing, take any one or more of the following actions:17
(1) Impose fines not to exceed five hundred dollars per violation or five18
thousand dollars in the aggregate for such conduct.19
(2) Suspend or revoke the limited lines license of the vendor.20
(3) Suspend the privilege of transacting portable electronics insurance21
at specific business locations where violations have occurred.22
(4) Suspend or revoke the ability of individual employees or authorized23
representatives to act under the license of the vendor.24
§1781.6. Application for license and fees25
A. An application for a license pursuant to this Part shall be made to and26
filed with the commissioner on forms prescribed and furnished by the27
commissioner and shall include the legal name of the applicant, the address of28
the home office of the applicant, the name and identifying information for all29 SB NO. 167
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officers, all directors and all persons who own directly or indirectly ten percent1
or more of the applicant and such other information as the commissioner may2
reasonably require; provided, however, that any applicant whose stock is3
publicly traded and registered under the federal securities laws or that is4
licensed pursuant to the Federal Communications Act of 1934, or any affiliate5
or subsidiary thereof, may, in lieu of providing the information for all officers,6
all directors and all persons who own directly or indirectly ten percent or more7
of the applicant, designate a single officer as the designated responsible person8
for the activities of the vendor pursuant to the limited lines portable electronics9
insurance license.10
B. The application shall be accompanied by the fee pursuant to R.S.11
22:821(34).12
C. Any vendor engaging in portable electronics insurance transactions13
on or before the effective date of this Part shall apply for licensure within ninety14
days of the application being made available by the commissioner.15
D. Every license issued pursuant to this Part shall expire on December16
thirty-first of the renewal year assigned by the commissioner and may be17
renewed by the filing of a renewal application as required by the commissioner18
and payment of the fee required by R.S. 22:821(34).19
E. Any vendor licensed pursuant to the provisions of this Part may20
authorize a third party to make any filing or notice other than the initial or21
renewal application required by this Part with the department on behalf of the22
vendor.23
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Cheryl Horne.
DIGEST
Gary Smith (SB 167)
Provides for portable electronics insurance policies.
Effective August 1, 2012.
(Adds R.S. 22:1431 through 1437)