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Regular Session, 2012 ENROLLED
SENATE BILL NO. 167
BY SENATOR GARY SMITH
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
(a) Initial license application......$20018
(b) Renewal...................................$10019
* * *20
§1431. Portable Electronics Insurance Policies21
A. Portable electronics insurance as defined in R.S. 22:1781.1(7) may be22
offered on a month-to-month or other periodic basis as a group or master23
commercial insurance policy issued to a vendor, as defined in R.S. 22:1781.1(9)24
of portable electronics for its enrolled customers.25 SB NO. 167 ENROLLED
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B. Notwithstanding any other provision of law to the contrary, an insurer1
may terminate or otherwise change the terms and conditions of a policy of2
portable electronics insurance only upon providing the policyholder and3
enrolled customers with at least thirty days' written notice.4
C. If the insurer changes the terms and conditions of a policy, then the5
insurer shall provide the vendor policyholder with a revised policy or6
endorsement and each enrolled customer with a revised certificate,7
endorsement, updated brochure, or other evidence indicating a change in the8
terms and conditions has occurred and a summary of any material change.9
D. Notwithstanding Subsection B of this Section, an insurer may10
terminate an enrolled customer's enrollment under a portable electronics11
insurance policy upon fifteen days' written notice for discovery of fraud or12
material misrepresentation in obtaining coverage or in the presentation of a13
claim thereunder.14
E. Notwithstanding Subsection B of this Section, an insurer may15
immediately terminate an enrolled customer's enrollment under a portable16
electronics insurance policy: 17
(1) For nonpayment of premium. 18
(2) If the enrolled customer ceases to have an active service with the19
vendor of portable electronics.20
(3) If the enrolled customer exceeds the aggregate limit of liability under21
the terms of the portable electronics insurance policy.22
F. If an enrolled customer exhausts the aggregate limit of liability under23
the terms of the portable electronics insurance policy, the insurer shall send24
notice of termination to the enrolled customer within thirty calendar days after25
exhaustion of the limit. If notice is not timely sent, coverage shall continue26
notwithstanding the exhaustion of the aggregate limit of liability, until the27
insurer sends notice of termination to the enrolled customer.28
G. Where a portable electronics insurance policy is terminated by a29
vendor, the vendor shall mail or deliver written notice to each enrolled30 SB NO. 167 ENROLLED
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customer advising the enrolled customer of the termination of the policy and the1
effective date of termination. The written notice shall be mailed or delivered to2
the enrolled customer at least thirty days prior to the termination.3
H. All notices or correspondence required by this Section or otherwise4
required by law shall be in writing. Notices and correspondence may be sent5
either by mail or by electronic means as set forth in this Section. If the notice or6
correspondence is mailed, it shall be sent to the vendor or the enrolled customer7
at the mailing address on file with the insurer or vendor. The insurer or vendor8
of portable electronics shall maintain proof of mailing in a form authorized or9
accepted by the United States Postal Service or other commercial mail delivery10
service. If the notice or correspondence is sent electronically, it shall be sent to11
the vendor of portable electronics at the vendor's electronic mail address12
specified for such purpose and to its affected enrolled customers' last known13
electronic mail addresses as provided by each enrolled customer to the insurer14
or vendor of portable electronics. For purposes of this Section, an enrolled15
customer's provision of an electronic mail address to the insurer or vendor of16
portable electronics shall be deemed consent to receive notices and17
correspondence by electronic means. The insurer or vendor of portable18
electronics, shall maintain proof that the notice or correspondence was sent.19
I. Notice or correspondence required by this Section or otherwise20
required by law may be sent on behalf of an insurer or vendor by a person21
licensed as an insurance producer in this state or any other person with whom22
the insurer or vendor contracts to perform such services on their behalf.23
* * *24
PART VIII-A Portable Electronics Insurance25
§1781.1. Definitions26
As used in this Part, the following terms shall have the following27
meanings:28
(1) "Commissioner" means the commissioner of insurance.29
(2) "Customer" means a person who purchases portable electronics or30 SB NO. 167 ENROLLED
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services.1
(3) "Department" means the department of insurance.2
(4) "Enrolled customer" means a customer who elects coverage under3
a portable electronics insurance policy issued to a vendor of portable4
electronics.5
(5) "Location" means any physical location in the state of Louisiana or6
any website, call center site, or similar location directed to residents of the state7
of Louisiana.8
(6) "Portable electronics" means electronic devices that are portable in9
nature, their accessories, and services related to the use of the device.10
(7)(a) "Portable electronics insurance" means insurance providing11
coverage for the repairs or replacement of portable electronics which may12
provide coverage for portable electronics against any one or more of the13
following causes of loss: loss, theft, inoperability due to mechanical failure,14
malfunction, damage, or other similar causes of loss.15
(b) "Portable electronics insurance" does not include any of the16
following:17
(i) A service contract or extended warranty providing coverage limited18
to the repair, replacement, or maintenance of property for the operational or19
structural failure of such property due to a defect in materials, workmanship,20
accidental damage from handling, power surges, or normal wear and tear.21
(ii) A policy of insurance covering a seller's or a manufacturer's22
obligations under a warranty.23
(iii) A homeowner's, renter's, private passenger automobile, commercial24
multi-peril, or similar policy.25
(8) "Portable electronics transaction" means any of the following:26
(a) The sale or lease of portable electronics by a vendor to a customer.27
(b) The sale of a service related to the use of portable electronics by a28
vendor to a customer.29
(9) "Vendor" means a person in the business of engaging in portable30 SB NO. 167 ENROLLED
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electronics transactions directly or indirectly.1
§1781.2. 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. The10
vendor shall be responsible for the conduct and actions related to the sale or11
offering of portable electronics insurance of all employees and authorized12
representatives and any payment of the premium for portable electronics13
insurance to an employee or authorized representative shall be deemed payment14
to the vendor.15
(3) In connection with a vendor's application for licensure and upon16
license renewal, the vendor shall provide a list to the commissioner of all17
locations in the state at which it offers coverage.18
§1781.3. Requirements for sale of portable electronics insurance19
A. In conjunction with and at the time of the sale of every portable20
electronics insurance policy, the vendor shall present brochures or other written21
materials to a prospective customer which:22
(1) Disclose that portable electronics insurance may provide a23
duplication of coverage already provided by a customer's homeowner's24
insurance policy, renter's insurance policy, or other source of coverage.25
(2) State that the enrollment by the customer in a portable electronics26
insurance program is not required in order to purchase or lease portable27
electronics or services.28
(3) Summarize the material terms of the insurance coverage, including:29
(a) The identity of the insurer.30 SB NO. 167 ENROLLED
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(b) The amount of any applicable deductible and how it is to be paid.1
(c) The benefits of the coverage.2
(d) The key terms and conditions of coverage such as whether portable3
electronics may be repaired or replaced with similar make and model4
reconditioned or non-original manufacturer parts or equipment.5
(4) Contain a summary of the process for filing a claim, including a6
description of how to return portable electronics and the maximum fee7
applicable in the event the customer fails to comply with any equipment return8
requirement.9
(5) Contain a statement that an enrolled customer may cancel10
enrollment for coverage under a portable electronics insurance policy at any11
time and the person paying the premium shall receive a refund or credit for any12
applicable unearned premium.13
B. Eligibility and underwriting standards for customers electing to14
enroll in coverage shall be established for each portable electronics insurance15
program.16
§1781.4. Authority of vendors of portable electronics17
A. An employee or authorized representative of a vendor may sell or18
offer portable electronics insurance to customers and shall not be subject to19
licensure as an insurance producer under this Part provided that:20
(1) The vendor obtains a limited lines license to authorize its employees21
or authorized representatives to sell or offer portable electronics insurance22
pursuant to this Part.23
(2) The vendor shall develop a training program for employees and24
authorized representatives of the vendor. The training required by this Section25
shall comply with all of the following:26
(a) The training shall be delivered to employees and authorized27
representatives of vendors who are directly engaged in the activity of selling or28
offering portable electronics insurance prior to the engagement in any sale or29
offer of portable electronics insurance to any customer by the employee or30 SB NO. 167 ENROLLED
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authorized representative.1
(b) The training may be provided in electronic form.2
(c) The training shall include instruction about the portable electronics3
insurance offered to customers and the disclosures required under this Part.4
B. Notwithstanding any other provision of law to the contrary,5
employees or authorized representatives of a vendor of portable electronics6
shall not be compensated based primarily on the number of customers enrolled7
for portable electronics insurance coverage but may receive compensation for8
activities under the limited lines license which is incidental to their overall9
compensation.10
C. The charges for portable electronics insurance coverage may be11
billed and collected by the vendor of portable electronics. Any charge to the12
enrolled customer for coverage that is not included in the cost associated with13
the purchase or lease of portable electronics or related services shall be14
separately itemized on the enrolled customer's bill. If the portable electronics15
insurance coverage is included with the purchase or lease of portable electronics16
or related services, the vendor shall clearly and conspicuously disclose to the17
enrolled customer that the portable electronics insurance coverage is included18
with the portable electronics or related services. Vendors billing and collecting19
such charges shall not be required to maintain such funds in a segregated20
account provided that the vendor is authorized by the insurer to hold such21
funds in an alternative manner and remits such amounts to the supervising22
entity within sixty days of receipt. All funds received by a vendor from an23
enrolled customer for the sale of portable electronics insurance shall be24
considered funds held in trust by the vendor in a fiduciary capacity for the25
benefit of the insurer. Vendors may receive compensation for billing and26
collection services.27
§1781.5. Suspension or revocation of license28
If a vendor of portable electronics or its employee or authorized29
representative violates any provision of this Part or any other applicable30 SB NO. 167 ENROLLED
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provision of this Title, the commissioner may, after notice and opportunity for1
a hearing, take any one or more of the following actions:2
(1) Impose fines not to exceed five hundred dollars per violation or five3
thousand dollars in the aggregate for such conduct.4
(2) Suspend or revoke the limited lines license of the vendor.5
(3) Suspend the privilege of transacting portable electronics insurance6
at specific business locations where violations have occurred.7
(4) Suspend or revoke the ability of individual employees or authorized8
representatives to act under the license of the vendor.9
§1781.6. Application for license and fees10
A. An application for a license pursuant to this Part shall be made to and11
filed with the commissioner on forms prescribed and furnished by the12
commissioner and shall include the legal name of the applicant, the address of13
the home office of the applicant, the name and identifying information for all14
officers, all directors and all persons who own directly or indirectly ten percent15
or more of the applicant and such other information as the commissioner may16
reasonably require. However, any applicant whose stock is publicly traded and17
registered under the federal securities laws or that is licensed pursuant to the18
Federal Communications Act of 1934, or any affiliate or subsidiary thereof,19
may, in lieu of providing the name and identifying information for all officers,20
all directors and all persons who own directly or indirectly ten percent or more21
of the applicant, designate a single officer as the designated responsible person22
for the activities of the vendor pursuant to the limited lines portable electronics23
insurance license. The name and identifying information only for such single24
designated responsible person is then required.25
B. The application shall be accompanied by the fee pursuant to R.S.26
22:821(B)(34).27
C. Any vendor engaging in portable electronics insurance transactions28
on or before the effective date of this Part shall apply for licensure within ninety29
days of the application being made available by the commissioner.30 SB NO. 167 ENROLLED
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D. Every license issued pursuant to this Part shall expire on December1
thirty-first of the renewal year assigned by the commissioner and may be2
renewed by the filing of a renewal application as required by the commissioner3
and payment of the fee required by R.S. 22:821(B)(34).4
PRESIDENT OF THE SENATE
SPEAKER OF THE HOUSE OF REPRESENTATIVES
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED: