By: Hancock S.B. No. 839
(In the Senate - Filed February 26, 2013; March 5, 2013,
read first time and referred to Committee on Business and Commerce;
March 18, 2013, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 8, Nays 0; March 18, 2013,
sent to printer.)
COMMITTEE SUBSTITUTE FOR S.B. No. 839 By: Hancock
A BILL TO BE ENTITLED
AN ACT
relating to the provision of insurance coverage for certain
portable electronic devices.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 551, Insurance Code, is amended by
adding Subchapter E to read as follows:
SUBCHAPTER E. PORTABLE ELECTRONICS INSURANCE
Sec. 551.201. DEFINITIONS. In this subchapter, "customer,"
"portable electronic devices," and "vendor" have the meanings
assigned by Section 4055.251.
Sec. 551.202. REQUIRED NOTICE OF TERMINATION OR CHANGE TO
POLICY. (a) Except as otherwise provided by this subchapter, an
insurer may terminate or change the terms and conditions of a policy
of portable electronics insurance only after notice to the master
or group policyholder and each enrolled customer. Notice under
this section must be provided not later than the 30th day before the
date of the termination or change.
(b) If the insurer changes the terms and conditions of the
policy, the insurer shall:
(1) provide to the master or group policyholder a
revised policy or endorsement; and
(2) provide to each enrolled customer:
(A) a revised certificate, revised endorsement,
updated brochure, or other document indicating that a change in the
terms and conditions has occurred; and
(B) a summary of the material changes.
Sec. 551.203. TERMINATION FOR FRAUD OR MISREPRESENTATION.
(a) An insurer may terminate the coverage of an enrolled customer
under a portable electronics insurance policy for fraud or material
misrepresentation in obtaining coverage or in the presentation of a
claim under the coverage.
(b) Termination of coverage under this section may not be
effective before the 15th day after the date the insurer provides
the customer notice of the termination.
Sec. 551.204. TERMINATION WITHOUT NOTICE. (a) An insurer
may terminate the coverage of an enrolled customer under a portable
electronics insurance policy without notice:
(1) for nonpayment of premium;
(2) if the enrolled customer ceases to have an active
service with the vendor of portable electronics; or
(3) if the enrolled customer exhausts the aggregate
limit of liability, if any, under the terms of the portable
electronics insurance policy.
(b) If a portable electronics insurance policy is
terminated under Subsection (a)(3), the insurer must send notice of
termination to the enrolled customer not later than the 30th day
after the date of exhaustion of the limit. If the notice is not
timely sent, the insurer shall continue the customer's coverage,
and the aggregate limit of liability is waived, until the insurer
sends the notice of termination to the enrolled customer.
Sec. 551.205. TERMINATION BY POLICYHOLDER. A master or
group policyholder who terminates a portable electronics insurance
policy shall provide notice to each enrolled customer advising the
enrolled customer of the termination of the policy and the
effective date of termination. The notice must be provided to the
enrolled customer not later than the 30th day before the date the
termination becomes effective.
Sec. 551.206. FORM OF NOTICE OR CORRESPONDENCE. (a) A
notice required by this subchapter, or another notice or
correspondence with respect to a portable electronics insurance
policy that is required by law, must be:
(1) in writing; and
(2) sent within the notice period, if any, specified
by the statute or rule requiring the notice or correspondence.
(b) Notwithstanding any other law, the notice or
correspondence may be sent by mail or by electronic means.
(c) If the notice or correspondence is mailed:
(1) it must be sent to the master or group policyholder
at the policyholder's mailing address specified for this purpose
and to each affected enrolled customer's last known mailing address
on file with the insurer; and
(2) the insurer or master or group policyholder shall
maintain proof of mailing in a form authorized or accepted by the
United States Postal Service or other commercial mail delivery
service.
(d) If the notice or correspondence is sent by electronic
means:
(1) it must be sent to the master or group policyholder
at the policyholder's e-mail address specified for this purpose and
to each affected enrolled customer's last known e-mail address as
provided by the customer to the insurer or master or group
policyholder; and
(2) the insurer or master or group policyholder shall
maintain proof that the notice or correspondence was sent.
(e) For purposes of Subsection (d), an enrolled customer's
provision of an e-mail address to the insurer or master or group
policyholder is considered consent to receive notices and
correspondence by electronic means.
(f) A notice or correspondence described by this section may
be sent on behalf of an insurer or master or group policyholder by a
licensed agent or agency appointed by the insurer.
SECTION 2. Section 4055.253, Insurance Code, is amended to
read as follows:
Sec. 4055.253. AUTHORITY OF VENDOR OF PORTABLE ELECTRONIC
DEVICES. (a) A vendor licensed under this subchapter and the
vendor's employee and authorized representative may act as an agent
for an authorized insurer in connection with the sale and use of
portable electronic devices and related services only with respect
to:
(1) insurance coverage provided to customers that
covers portable electronic devices against one or more of the
following:
(A) loss;
(B) theft;
(C) mechanical failure;
(D) malfunction;
(E) damage; or
(F) other applicable perils; or
(2) the provision of any other coverage the
commissioner approves as meaningful and appropriate in connection
with the use of portable electronic devices or related services.
(b) A vendor licensed under this subchapter may bill a
customer for, and collect from a customer payment for, insurance
coverage provided to the customer under this subchapter.
(c) An insurer issuing a policy to a licensed vendor is
considered to have received a premium from a vendor's customer
enrolled in coverage on the customer's payment of the premium to the
vendor.
SECTION 3. Subchapter F, Chapter 4055, Insurance Code, is
amended by adding Section 4055.256 to read as follows:
Sec. 4055.256. REQUIRED DISCLOSURES. (a) A licensed
vendor must separately itemize on a customer's bill any charge to
the customer for insurance coverage provided under this subchapter
that is not included in the cost associated with the purchase or
lease of the covered portable electronic device or related
services.
(b) If insurance coverage provided under this subchapter is
included in the cost associated with the purchase or lease of a
covered portable electronic device or related services, a licensed
vendor shall, at the time of the purchase or lease, clearly and
conspicuously disclose the inclusion of that coverage to the
customer.
SECTION 4. This Act takes effect September 1, 2013.
* * * * *