CSSB 52(L&C): "An Act providing that portable electronics insurance is not a service contract; providing that a portable electronics manufacturer's warranty or extended warranty is not regulated as insurance; relating to 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 relating to authorization and training of employees and representatives of a vendor to transact portable electronics insurance; and providing for an effective date."
00 CS FOR SENATE BILL NO. 52(L&C) 01 "An Act providing that portable electronics insurance is not a service contract; 02 providing that a portable electronics manufacturer's warranty or extended warranty is 03 not regulated as insurance; relating to portable electronics insurance; authorizing the 04 director of insurance to issue a limited producer license to a portable electronics vendor 05 for the sale of portable electronics insurance; and relating to authorization and training 06 of employees and representatives of a vendor to transact portable electronics insurance; 07 and providing for an effective date." 08 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 09 * Section 1. AS 21.03.021(e) is amended to read: 10 (e) This title does not apply to a service contract offered, issued for delivery, 11 delivered, or renewed in this state. In this subsection, "service contract" 12 (1) means a service contract or agreement for a separate or additional 13 consideration, for a specific duration, to
01 (A) maintain, service, repair, or replace tangible personal 02 property, including portable electronics, or to indemnify for repair, 03 replacement, or maintenance, for an operational or structural failure due to a 04 defect in materials or workmanship or normal wear and tear, with or without 05 additional provision for incidental indemnity payments when service, repair, or 06 replacement is not reasonably or commercially feasible; 07 (B) repair, replace, or maintain tangible personal property, 08 including portable electronics damaged as a result of power surges or as a 09 result of accidental damage from the handling of property [DAMAGED BY 10 POWER SURGES]; or 11 (C) repair, replace, or maintain household consumer goods, 12 household appliances, and household systems, including damage resulting 13 from operational or structural failure due to a defect in materials or 14 workmanship or normal wear and tear; 15 (2) does not include 16 (A) mechanical breakdown insurance; 17 (B) a contract that requires an indemnity payment per incident 18 and the payment exceeds the purchase price of the property serviced; 19 (C) a contract to provide service on a motor vehicle subject to 20 registration under AS 28.10.011; [OR] 21 (D) a home warranty; in this subparagraph, "home warranty" 22 means a warranty that covers the entire home and does not include a warranty 23 limited to a household system or appliance; or 24 (E) portable electronics insurance as defined in 25 AS 21.36.515. 26 * Sec. 2. AS 21.03.021 is amended by adding a new subsection to read: 27 (g) This title does not apply to a portable electronics manufacturer's warranty 28 or extended warranty. 29 * Sec. 3. AS 21.27.060(d) is amended to read: 30 (d) This section does not apply to an applicant 31 (1) for a limited license under AS 21.27.150(a)(1), (4), [OR] (5), or
01 (8); or 02 (2) who, at any time within the one-year period immediately preceding 03 the date the current pending application is received by the division, had been licensed 04 in good standing in this state under a license requiring substantially similar 05 qualifications as required by the license applied for. 06 * Sec. 4. AS 21.27.150(a) is amended to read: 07 (a) The director may issue a 08 (1) travel insurance limited producer license to a person who is 09 appointed under AS 21.27.100 and who sells insurance connected with transportation 10 provided by a common carrier, and limited to a specific trip, that covers 11 (A) trip cancellation; 12 (B) trip interruption; or 13 (C) life, health, disability, or personal effects; 14 (2) title insurance limited producer license to a person whose place of 15 business is located in this state and whose sole purpose is to be appointed by and act 16 on behalf of a title insurer; 17 (3) bail bond limited producer license to a person who is appointed by 18 and acts on behalf of a surety insurer pertaining to bail bonds; 19 (4) motor vehicle rental agency limited producer license to a person 20 and, subject to the approval of the director, to employees of the person licensed that 21 the licensee authorizes to transact the business of insurance on the licensee's behalf if, 22 as to an employee, the licensee complies with (D) of this paragraph and if the licensee 23 (A) rents to others, without operators, 24 (i) private passenger motor vehicles, including 25 passenger vans, minivans, and sport utility vehicles; or 26 (ii) cargo motor vehicles, including cargo vans, pickup 27 trucks, and trucks with a gross vehicle weight of less than 26,000 28 pounds that do not require the operator to possess a commercial driver's 29 license; 30 (B) rents motor vehicles only to persons under rental 31 agreements that do not exceed a term of 90 days;
01 (C) transacts only the following kinds of insurance: 02 (i) motor vehicle liability insurance with respect to 03 liability arising out of the use of a vehicle rented from the licensee 04 during the term of the rental agreement; 05 (ii) uninsured or underinsured motorist coverage, with 06 minimum limits described in AS 21.96.020(c) and (d) arising from the 07 use of a vehicle rented from the licensee during the term of the rental 08 agreement; 09 (iii) insurance against medical, hospital, surgical, and 10 disability benefits to an injured person and funeral and death benefits to 11 dependents, beneficiaries, or personal representatives of a deceased 12 person if the insurance is issued as incidental coverage with or 13 supplemental to liability insurance and arises out of the use of a vehicle 14 rented from the licensee during the term of the rental agreement; 15 (iv) personal effects insurance, including loss of use, 16 with respect to damage to or loss of personal property of a person 17 renting the vehicle and other vehicle occupants while that property is 18 being loaded into, transported by, or unloaded from a vehicle rented 19 from the licensee during the term of the rental agreement; 20 (v) towing and roadside assistance with respect to 21 vehicles rented from the licensee during the term of the rental 22 agreement; and 23 (vi) other insurance as may be authorized by regulation 24 by the director; 25 (D) notifies the director in writing, within 30 days of 26 employment, of the name, date of birth, social security number, location of 27 employment, and home address of an employee authorized by the licensee to 28 transact insurance on the licensee's behalf; and 29 (E) provides other information as required by the director; 30 (5) nonresident limited producer license to a person; a license that the 31 director issues under this paragraph grants the same scope of authority as a limited
01 lines producer license issued to the person by the person's home state; 02 (6) credit insurance limited producer license to a person who sells 03 limited lines credit insurance; 04 (7) miscellaneous limited producer license to a person who transacts 05 insurance in this state that restricts the person's authority to less than the total authority 06 for a line of authority described in AS 21.27.115(1) - (6), (8), and (9); 07 (8) portable electronics limited producer license to a vendor that 08 sells or offers portable electronics insurance as defined in AS 21.36.515; the 09 following provisions apply to a license issued under this paragraph: 10 (A) a vendor shall file with the director a sworn application 11 for a license under this paragraph on a form prescribed and furnished by 12 the director; the vendor shall provide the name, residence address, 13 location of the vendor's home office, and other information required by 14 the director for an employee or officer that is designated by the vendor as 15 the person responsible for the vendor's compliance with the requirements 16 of this chapter; however, if the vendor derives more than 50 percent of its 17 revenue from the sale of portable electronics insurance, the vendor shall 18 provide the information required under this subparagraph for all officers, 19 directors, and shareholders of record having beneficial ownership of 10 20 percent or more of any class of securities registered under the federal 21 securities law; 22 (B) a portable electronics limited producer license issued 23 under this paragraph must authorize the employees or authorized 24 representatives of a vendor to transact portable electronics insurance at 25 each location at which a vendor offers portable electronics to customers in 26 this state; and 27 (C) the employees or authorized representatives of the 28 vendor may transact portable electronics insurance and are not required 29 to obtain a limited producer license if 30 (i) the employees or authorized representatives are 31 not compensated based primarily on the number of customers
01 enrolled for coverage; however, an employee or authorized 02 representative may receive compensation for activities under the 03 license that is incidental to the employee's or authorized 04 representative's overall compensation; 05 (ii) the insurer issuing the portable electronics 06 insurance provides a training program for employees and 07 authorized representatives of the portable electronics limited 08 producer licensee that includes instruction about the portable 09 electronics insurance offered to customers and the disclosures 10 required under AS 21.36.515; and 11 (iii) the vendor maintains a register of each location 12 in the state where the vendor offers portable electronics insurance 13 and submits the register to the director within 30 days after the 14 director requests the register. 15 * Sec. 5. AS 21.36 is amended by adding a new section to article 5 to read: 16 Sec. 21.36.515. Portable electronics insurance. (a) Portable electronics 17 insurance may be offered, issued for delivery, issued, or renewed only if the insurer 18 makes available to customers written material stating 19 (1) a summary of the material terms of the insurance, including 20 (A) the identity of the insurer; 21 (B) the identity of the vendor offering or selling the portable 22 electronics insurance; 23 (C) the amount of the premium for coverage to be paid by the 24 customer; 25 (D) the period for which coverage is effective; 26 (E) deductible amounts, and how the deductible is to be paid; 27 (F) the benefits of the coverage; 28 (G) the process for filing a claim; 29 (H) requirements for returning a device to the vendor or 30 insurer, including related costs; 31 (I) proof-of-loss requirements;
01 (2) whether the portable electronic device may be repaired or replaced 02 by the insurer in response to a claim; 03 (3) whether similar make and model reconditioned devices or 04 nonoriginal manufacturer parts and equipment may be used by the insurer in response 05 to a claim; 06 (4) that the insurance offered may duplicate coverage in a 07 homeowner's, renter's, or other similar insurance policy; 08 (5) that the customer is not obligated to purchase insurance to 09 purchase, lease, or service a portable electronic device; and 10 (6) that the customer may cancel enrollment for coverage at any time 11 and receive a refund or credit based on a proration of the premium amount paid by the 12 customer for the period that coverage was effective. 13 (b) The written materials required by this section are not subject to the 14 requirements of AS 21.42.120. 15 (c) Portable electronics insurance may be offered on a month-to-month or 16 other periodic basis as a group or master policy issued to a vendor under which an 17 individual customer may elect to enroll for coverage. The insurer offering coverage 18 under a group or master policy shall establish eligibility and underwriting standards 19 for customers electing to enroll in coverage for each portable electronics insurance 20 program. 21 (d) Portable electronics insurance may be offered as commercial inland marine 22 insurance. 23 (e) A premium for portable electronics insurance may be billed and collected 24 by the vendor of portable electronics. A charge to the customer for coverage that is not 25 included in the cost associated with the purchase or lease of portable electronics or 26 related services must be itemized separately from the charges for the purchase, lease, 27 or service of a portable electronic device. If the coverage is included with the purchase 28 or lease of portable electronics or related services, the vendor shall clearly and 29 conspicuously disclose to the consumer that the coverage is included with the portable 30 electronics or related services. Vendors collecting premiums for portable electronics 31 insurance are not required to maintain premiums in a segregated account if the vendor
01 is authorized by the producer or insurer to hold premiums in an alternative manner and 02 pays the premiums to the insurer within 60 days after receipt. Premiums received by a 03 vendor from a customer purchasing portable electronics insurance shall be held in a 04 fiduciary capacity for the benefit of the insurer. A vendor may receive compensation 05 for billing and collection services. 06 (f) A portable electronics insurance policy may be changed or terminated as 07 follows: 08 (1) an insurer may cancel or change the terms and conditions of the 09 policy; the insurer shall provide the vendor and enrolled customers with at least 30 10 days' notice and shall provide the vendor with a revised policy or endorsement and 11 each enrolled customer with a revised certificate, endorsement, updated brochure, or 12 other evidence indicating that a change in the terms and conditions has occurred and a 13 summary of material changes; 14 (2) an insurer may, upon 15 days' notice, terminate an enrolled 15 customer's enrollment under a portable electronics insurance policy for fraud or 16 material misrepresentation in obtaining coverage or in the presentation of a claim 17 under the terms of the policy; 18 (3) an insurer may, without prior notice, immediately terminate an 19 enrolled customer's enrollment under a portable electronics insurance policy 20 (A) for nonpayment of premium; 21 (B) if the enrolled customer ceases to have an active service 22 contract with the vendor; or 23 (C) if an enrolled customer exhausts the aggregate limit of 24 liability, if any, under the terms of the portable electronics insurance policy 25 and the insurer sends notice of termination to the enrolled customer within 30 26 calendar days after exhaustion of the limit; however, if notice is not sent within 27 30 calendar days, enrollment shall continue, notwithstanding the exhaustion of 28 the aggregate limit of liability, until the insurer sends notice of termination to 29 the enrolled customer. 30 (4) if a portable electronics insurance policy is terminated by a vendor, 31 the vendor shall mail or deliver written notice to each enrolled customer advising the
01 enrolled customer of the termination of the policy and the effective date of 02 termination; the written notice shall be mailed or delivered to the enrolled customer at 03 least 30 days before the termination. 04 (5) if a policy of portable electronics insurance is terminated by an 05 insurer or a vendor, the insurer or vendor shall, within 60 days after termination, return 06 any unearned premium to the person who paid the premium. 07 (6) if notice or correspondence with respect to a policy of portable 08 electronics insurance is required under this section or is otherwise required by law, the 09 notice or correspondence must be in writing; notices and correspondence may be sent 10 either by mail or by electronic means as follows: 11 (A) if the notice or correspondence is mailed, it shall be sent to 12 the vendor of portable electronics at the vendor's mailing address specified for 13 that purpose and to the vendor's affected enrolled customers' last known 14 mailing addresses on file with the insurer; the insurer or vendor of portable 15 electronics shall maintain proof of mailing in a form authorized or accepted by 16 the United States Postal Service or other commercial mail delivery service; 17 (B) if the notice or correspondence is sent by electronic means, 18 it shall be sent to the vendor of portable electronics at the vendor's electronic 19 mail address specified for that purpose and to the vendor's affected enrolled 20 customers' last known electronic mail addresses as provided by each enrolled 21 customer to the insurer or vendor of portable electronics; for purposes of this 22 subparagraph, an enrolled customer's provision of an electronic mail address to 23 the insurer or vendor of portable electronics shall be considered consent to 24 receive notices and correspondence electronically; the insurer or vendor of 25 portable electronics shall maintain proof that the notice or correspondence was 26 sent. 27 (7) notice or correspondence required by this section or otherwise 28 required by law may be sent on behalf of an insurer or vendor by a producer appointed 29 by the insurer. 30 (g) A portable electronics insurance policy must provide that, in the event of a 31 covered loss under more than one policy, the portable electronics policy will provide
01 primary coverage. 02 (h) In this section, 03 (1) "portable electronics insurance" 04 (A) means insurance offered, issued for delivery, delivered, or 05 renewed by a vendor engaged in the business of selling, leasing, or servicing 06 portable electronic devices to cover the loss, theft, mechanical failure, 07 malfunction, damage, repair, or replacement of a small electronic device, 08 including a cell phone, laptop computer, electronic tablet, GPS device, radio, 09 portable music player, or associated accessory; 10 (B) does not include 11 (i) a service contract governed by AS 21.03.021(e); 12 (ii) a policy of insurance covering a seller's or a 13 manufacturer's obligations under a warranty; or 14 (iii) a homeowner's, renter's, private passenger 15 automobile, commercial multiperil, or similar policy that covers loss or 16 theft of portable electronics; 17 (2) "vendor" means a business entity in the business of selling or 18 leasing portable electronics and related services and accessories. 19 * Sec. 6. This Act takes effect January 1, 2014.