SB 52: "An Act providing that portable electronics insurance is not a service contract; defining portable electronics insurance; authorizing the director of insurance to issue a limited producer license to a portable electronics vendor for the sale of portable electronics insurance; and authorizing the employees and representatives of a vendor to transact portable electronics insurance."
00 SENATE BILL NO. 52 01 "An Act providing that portable electronics insurance is not a service contract; defining 02 portable electronics insurance; authorizing the director of insurance to issue a limited 03 producer license to a portable electronics vendor for the sale of portable electronics 04 insurance; and authorizing the employees and representatives of a vendor to transact 05 portable electronics insurance." 06 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 07 * Section 1. AS 21.03.021(e) is amended to read: 08 (e) This title does not apply to a service contract offered, issued for delivery, 09 delivered, or renewed in this state. In this subsection, "service contract" 10 (1) means a service contract or agreement for a separate or additional 11 consideration, for a specific duration, to 12 (A) maintain, service, repair, or replace tangible personal 13 property, or to indemnify for repair, replacement, or maintenance, for an
01 operational or structural failure due to a defect in materials or workmanship or 02 normal wear and tear, with or without additional provision for incidental 03 indemnity payments when service, repair, or replacement is not reasonably or 04 commercially feasible; 05 (B) repair, replace, or maintain tangible personal property 06 damaged as a result of power surges or as a result of accidental damage from 07 the handling of property damaged by power surges; or 08 (C) repair, replace, or maintain household consumer goods, 09 household appliances, and household systems, including damage resulting 10 from operational or structural failure due to a defect in materials or 11 workmanship or normal wear and tear; 12 (2) does not include 13 (A) mechanical breakdown insurance; 14 (B) a contract that requires an indemnity payment per incident 15 and the payment exceeds the purchase price of the property serviced; 16 (C) a contract to provide service on a motor vehicle subject to 17 registration under AS 28.10.011; [OR] 18 (D) a home warranty; in this subparagraph, "home warranty" 19 means a warranty that covers the entire home and does not include a warranty 20 limited to a household system or appliance; or 21 (E) portable electronics insurance as defined in AS 22 21.36.515. 23 * Sec. 2. AS 21.27.060(d) is amended to read: 24 (d) This section does not apply to an applicant 25 (1) for a limited license under AS 21.27.150(a)(1), (4), [OR] (5), or 26 (8); or 27 (2) who, at any time within the one-year period immediately preceding 28 the date the current pending application is received by the division, had been licensed 29 in good standing in this state under a license requiring substantially similar 30 qualifications as required by the license applied for. 31 * Sec. 3. AS 21.27.150(a) is amended to read:
01 (a) The director may issue a 02 (1) travel insurance limited producer license to a person who is 03 appointed under AS 21.27.100 and who sells insurance connected with transportation 04 provided by a common carrier, and limited to a specific trip, that covers 05 (A) trip cancellation; 06 (B) trip interruption; or 07 (C) life, health, disability, or personal effects; 08 (2) title insurance limited producer license to a person whose place of 09 business is located in this state and whose sole purpose is to be appointed by and act 10 on behalf of a title insurer; 11 (3) bail bond limited producer license to a person who is appointed by 12 and acts on behalf of a surety insurer pertaining to bail bonds; 13 (4) motor vehicle rental agency limited producer license to a person 14 and, subject to the approval of the director, to employees of the person licensed that 15 the licensee authorizes to transact the business of insurance on the licensee's behalf if, 16 as to an employee, the licensee complies with (D) of this paragraph and if the licensee 17 (A) rents to others, without operators, 18 (i) private passenger motor vehicles, including 19 passenger vans, minivans, and sport utility vehicles; or 20 (ii) cargo motor vehicles, including cargo vans, pickup 21 trucks, and trucks with a gross vehicle weight of less than 26,000 22 pounds that do not require the operator to possess a commercial driver's 23 license; 24 (B) rents motor vehicles only to persons under rental 25 agreements that do not exceed a term of 90 days; 26 (C) transacts only the following kinds of insurance: 27 (i) motor vehicle liability insurance with respect to 28 liability arising out of the use of a vehicle rented from the licensee 29 during the term of the rental agreement; 30 (ii) uninsured or underinsured motorist coverage, with 31 minimum limits described in AS 21.96.020(c) and (d) arising from the
01 use of a vehicle rented from the licensee during the term of the rental 02 agreement; 03 (iii) insurance against medical, hospital, surgical, and 04 disability benefits to an injured person and funeral and death benefits to 05 dependents, beneficiaries, or personal representatives of a deceased 06 person if the insurance is issued as incidental coverage with or 07 supplemental to liability insurance and arises out of the use of a vehicle 08 rented from the licensee during the term of the rental agreement; 09 (iv) personal effects insurance, including loss of use, 10 with respect to damage to or loss of personal property of a person 11 renting the vehicle and other vehicle occupants while that property is 12 being loaded into, transported by, or unloaded from a vehicle rented 13 from the licensee during the term of the rental agreement; 14 (v) towing and roadside assistance with respect to 15 vehicles rented from the licensee during the term of the rental 16 agreement; and 17 (vi) other insurance as may be authorized by regulation 18 by the director; 19 (D) notifies the director in writing, within 30 days of 20 employment, of the name, date of birth, social security number, location of 21 employment, and home address of an employee authorized by the licensee to 22 transact insurance on the licensee's behalf; and 23 (E) provides other information as required by the director; 24 (5) nonresident limited producer license to a person; a license that the 25 director issues under this paragraph grants the same scope of authority as a limited 26 lines producer license issued to the person by the person's home state; 27 (6) credit insurance limited producer license to a person who sells 28 limited lines credit insurance; 29 (7) miscellaneous limited producer license to a person who transacts 30 insurance in this state that restricts the person's authority to less than the total authority 31 for a line of authority described in AS 21.27.115(1) - (6), (8), and (9);
01 (8) portable electronics limited producer license to a vendor that 02 sells or offers portable electronics insurance as defined in AS 21.36.515; the 03 following provisions apply to a license issued under this paragraph: 04 (A) a vendor shall file with the director a sworn application 05 for a license under this paragraph on a form prescribed and furnished by 06 the director; the vendor shall provide the name, residence address, 07 location of the vendor's home office, and other information required by 08 the director for an employee or officer that is designated by the vendor as 09 the person responsible for the vendor's compliance with the requirements 10 of this chapter; however, if the vendor derives more than 50 percent of its 11 revenue from the sale of portable electronics insurance, the vendor shall 12 provide the information required under this subparagraph for all officers, 13 directors, and shareholders of record having beneficial ownership of 10 14 percent or more of any class of securities registered under the federal 15 securities law; 16 (B) a portable electronics limited producer license issued 17 under this paragraph must authorize the employees or authorized 18 representatives of a vendor to transact portable electronics insurance at 19 each location at which a vendor offers portable electronics to customers in 20 this state; and 21 (C) the employees or authorized representatives of the 22 vendor may transact portable electronics insurance and are not required 23 to obtain a limited producer license if 24 (i) the employees or authorized representatives are 25 not compensated based primarily on the number of customers 26 enrolled for coverage; however, an employee or authorized 27 representative may receive compensation for activities under the 28 license that is incidental to the employee's or authorized 29 representative's overall compensation; 30 (ii) the insurer issuing the portable electronics 31 insurance provides a training program for employees and
01 authorized representatives of the portable electronics limited 02 producer licensee that includes instruction about the portable 03 electronics insurance offered to customers and the disclosures 04 required under AS 21.36.515; 05 (iii) the vendor maintains a register of each location 06 in the state where it offers portable electronics insurance and 07 submits the register to the director within 30 days after the director 08 requests the register. 09 * Sec. 4. AS 21.36 is amended by adding a new section to article 5 to read: 10 Sec. 21.36.515. Portable electronics insurance. (a) Portable electronics 11 insurance may be offered, issued for delivery, issued, or renewed only if the insurer 12 makes available to customers written material stating 13 (1) a summary of the material terms of the insurance, including 14 (A) the identity of the insurer; 15 (B) the identity of the vendor offering or selling the portable 16 electronics insurance; 17 (C) the amount of the premium for coverage to be paid by the 18 customer; 19 (D) the period for which coverage is effective; 20 (E) deductible amounts, and how the deductible is to be paid; 21 (F) the benefits of the coverage; 22 (G) the process for filing a claim; 23 (H) requirements for returning a device to the vendor or 24 insurer, including related costs; 25 (I) proof-of-loss requirements; 26 (2) whether the portable electronic device may be repaired or replaced 27 by the insurer in response to a claim; 28 (3) whether similar make and model reconditioned devices or 29 nonoriginal manufacturer parts and equipment may be used by the insurer in response 30 to a claim; 31 (4) that the insurance offered may duplicate coverage in a
01 homeowner's, renter's, or other similar insurance policy; 02 (5) that the customer is not obligated to purchase insurance to 03 purchase, lease, or service a portable electronic device; and 04 (6) that the customer may cancel the insurance policy at any time and 05 receive a refund based on a proration of the premium amount paid by the customer for 06 the period specified in the policy and the time that the policy was effective. 07 (b) The written materials required by this section are not subject to the 08 requirements of AS 21.42.120. 09 (c) Portable electronics insurance may be offered on a month-to-month or 10 other periodic basis as a group or master policy issued to a vendor under which an 11 individual customer may elect to enroll for coverage. The insurer offering coverage 12 under a group or master policy shall establish eligibility and underwriting standards 13 for customers electing to enroll in coverage for each portable electronics insurance 14 program. 15 (d) Portable electronics insurance may be offered as commercial inland marine 16 insurance. 17 (e) A premium for portable electronics insurance may be billed and collected 18 by the vendor of portable electronics. A charge to the customer for coverage that is not 19 included in the cost associated with the purchase or lease of portable electronics or 20 related services must be itemized separately from the charges for the purchase, lease, 21 or service of a portable electronic device. If the coverage is included with the purchase 22 or lease of portable electronics or related services, the vendor shall clearly and 23 conspicuously disclose to the consumer that the coverage is included with the portable 24 electronics or related services. Vendors collecting premiums for portable electronics 25 insurance are not required to maintain premiums in a segregated account if the vendor 26 is authorized by the producer or insurer to hold premiums in an alternative manner and 27 pays the premiums to the insurer within 60 days after receipt. Premiums received by a 28 vendor from a customer purchasing portable electronics insurance shall be held in a 29 fiduciary capacity for the benefit of the insurer. A vendor may receive compensation 30 for billing and collection services. 31 (f) A portable electronics insurance policy may be changed or terminated as
01 follows: 02 (1) an insurer may change the terms and conditions of the policy; the 03 insurer shall provide the vendor and enrolled customers with at least 30 days' notice 04 and shall provide the vendor with a revised policy or endorsement and each enrolled 05 customer with a revised certificate, endorsement, updated brochure, or other evidence 06 indicating that a change in the terms and conditions has occurred and a summary of 07 material changes; 08 (2) an insurer may, upon 15 days' notice, terminate an enrolled 09 customer's enrollment under a portable electronics insurance policy for fraud or 10 material misrepresentation in obtaining coverage or in the presentation of a claim 11 under the terms of the policy; 12 (3) an insurer may, without prior notice, immediately terminate an 13 enrolled customer's enrollment under a portable electronics insurance policy 14 (A) for nonpayment of premium; 15 (B) if the enrolled customer ceases to have a current contract to 16 provide service for the operation of a portable electronic device with the 17 vendor; or 18 (C) if an enrolled customer exhausts the aggregate limit of 19 liability, if any, under the terms of the portable electronics insurance policy 20 and the insurer sends notice of termination to the enrolled customer within 30 21 calendar days after exhaustion of the limit; however, if notice is not sent within 22 30 calendar days, enrollment shall continue, notwithstanding the exhaustion of 23 the aggregate limit of liability, until the insurer sends notice of termination to 24 the enrolled customer. 25 (4) if a portable electronics insurance policy is terminated by a vendor, 26 the vendor shall mail or deliver written notice to each enrolled customer advising the 27 enrolled customer of the termination of the policy and the effective date of 28 termination; the written notice shall be mailed or delivered to the enrolled customer at 29 least 30 days before the termination. 30 (5) if notice or correspondence with respect to a policy of portable 31 electronics insurance is required under this section or is otherwise required by law, the
01 notice or correspondence must be in writing; notices and correspondence may be sent 02 either by mail or by electronic means as follows: 03 (A) if the notice or correspondence is mailed, it shall be sent to 04 the vendor of portable electronics at the vendor's mailing address specified for 05 that purpose and to the vendor's affected enrolled customers' last known 06 mailing addresses on file with the insurer; the insurer or vendor of portable 07 electronics shall maintain proof of mailing in a form authorized or accepted by 08 the United States Postal Service or other commercial mail delivery service; 09 (B) if the notice or correspondence is sent by electronic means, 10 it shall be sent to the vendor of portable electronics at the vendor's electronic 11 mail address specified for that purpose and to the vendor's affected enrolled 12 customers' last known electronic mail addresses as provided by each enrolled 13 customer to the insurer or vendor of portable electronics; for purposes of this 14 subparagraph, an enrolled customer's provision of an electronic mail address to 15 the insurer or vendor of portable electronics shall be considered consent to 16 receive notices and correspondence electronically; the insurer or vendor of 17 portable electronics shall maintain proof that the notice or correspondence was 18 sent. 19 (6) Notice or correspondence required by this section or otherwise 20 required by law may be sent on behalf of an insurer or vendor by a producer appointed 21 by the insurer. 22 (g) In this section, 23 (1) "portable electronics insurance" 24 (A) means insurance offered, issued for delivery, delivered, or 25 renewed by a vendor engaged in the business of selling, leasing, or servicing 26 portable electronic devices to cover the loss, theft, mechanical failure, 27 malfunction, damage, repair, or replacement of a small electronic device, 28 including a cell phone, laptop computer, GPS device, radio, portable music 29 player, or associated accessory; 30 (B) does not include 31 (i) a service contract governed by AS 21.03.021(e);
01 (ii) a policy of insurance covering a seller's or a 02 manufacturer's obligations under a warranty; or 03 (iii) a homeowner's, renter's, private passenger 04 automobile, commercial multiperil, or similar policy that covers loss or 05 theft of portable electronics; 06 (2) "vendor" means a business entity in the business of selling or 07 leasing portable electronics and related services and accessories.