HF 3251

1st Committee Engrossment - 86th Legislature (2009 - 2010)

Posted on 03/19/2013 07:29 p.m.

1.1A bill for an act 1.2relating to insurance; regulating portable electronics insurance; appropriating 1.3money;amending Minnesota Statutes 2008, sections 60K.36, subdivision 2; 1.460K.38, subdivision 1; Minnesota Statutes 2009 Supplement, section 60K.55, 1.5subdivision 2; proposing coding for new law in Minnesota Statutes, chapter 60K. 1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.7    Section 1. Minnesota Statutes 2008, section 60K.36, subdivision 2, is amended to read: 1.8    Subd. 2. Examination not required. A resident individual applying for a limited 1.9lines credit insurance, title insurance, travel baggage insurance, mobile telephone 1.10insurance, or bail bonds license is not required to take a written examination. 1.11    Sec. 2. Minnesota Statutes 2008, section 60K.38, subdivision 1, is amended to read: 1.12    Subdivision 1. Issuance. (a) Unless denied a license under section 60K.43, a person 1.13who has met the requirements of sections 60K.36 and 60K.37 must be issued an insurance 1.14producer license. An insurance producer may receive qualification for a license in one or 1.15more of the lines of authority in paragraphs (b) and (c). 1.16(b) An individual insurance producer may receive qualification for a license in 1.17one or more of the following major lines: 1.18(1) life insurance: coverage on human lives including benefits of endowment and 1.19annuities, and may include benefits in the event of death or dismemberment by accident 1.20and benefits for disability income; 1.21(2) accident and health or sickness insurance: coverage for sickness, bodily injury, 1.22or accidental death, and may include benefits for disability income; 1.23(3) property insurance: coverage for the direct or consequential loss or damage to 1.24property of every kind; 2.1(4) casualty insurance: coverage against legal liability, including that for death, 2.2injury, or disability, or damage to real or personal property; 2.3(5) variable life and variable annuity products insurance: coverage provided under 2.4variable life insurance contracts and variable annuities; and 2.5(6) personal lines: property and casualty insurance coverage sold to individuals and 2.6families for primarily noncommercial purposes. 2.7(c) An individual insurance producer may receive qualification for a license in 2.8one or more of the following limited lines: 2.9(1) limited line credit insurance; 2.10(2) farm property and liability insurance; 2.11(3) title insurance; 2.12(4) travel baggage insurance; new text begin and new text end 2.13(5) mobile telephone insurance; and 2.14(6) new text begin (5) new text end bail bonds. 2.15    Sec. 3. new text begin [60K.381] SALE OF PORTABLE ELECTRONICS INSURANCE. new text end 2.16     new text begin Subdivision 1. new text end new text begin Definitions. new text end new text begin For purposes of this section, the following terms have new text end 2.17 new text begin the following meanings: new text end 2.18 new text begin (a) "Customer" means a person who purchases portable electronics or services. new text end 2.19 new text begin (b) "Covered customer" means a customer who elects coverage under a portable new text end 2.20 new text begin electronics insurance policy issued to a vendor of portable electronics. new text end 2.21 new text begin (c) "Portable electronics" means electronic devices that are portable in nature, their new text end 2.22 new text begin accessories, and services related to the use of the device. new text end 2.23 new text begin (d)(1) "Portable electronics insurance" means insurance providing coverage for new text end 2.24 new text begin the repair or replacement of portable electronics, which may cover portable electronics new text end 2.25 new text begin against any one or more of the following causes of loss: loss, theft, mechanical failure, new text end 2.26 new text begin malfunction, damage, or other applicable perils. new text end 2.27 new text begin (2) "Portable electronics insurance" does not include: new text end 2.28 new text begin (i) a service contract governed by chapter 59B; new text end 2.29 new text begin (ii) a policy of insurance covering a seller's or a manufacturer's obligations under new text end 2.30 new text begin a warranty; or new text end 2.31 new text begin (iii) a homeowner's, renter's, private passenger automobile, commercial multiperil, new text end 2.32 new text begin or similar policy that covers loss or theft of portable electronics. new text end 2.33 new text begin (e) "Portable electronics transaction" means: new text end 2.34 new text begin (1) the sale or lease of portable electronics by a vendor to a customer; or new text end 3.1 new text begin (2) the sale of a service related to the use of portable electronics by a vendor to a new text end 3.2 new text begin customer. new text end 3.3 new text begin (f) "Supervising agency" means a business entity that is a licensed insurance new text end 3.4 new text begin producer. new text end 3.5 new text begin (g) "Vendor" means a person in the business of engaging in portable electronics new text end 3.6 new text begin transactions, directly or indirectly. new text end 3.7     new text begin Subd. 2. new text end new text begin Licensure of vendors. new text end new text begin (a) A vendor is required to hold a limited lines new text end 3.8 new text begin license to sell or offer coverage under a policy of portable electronics insurance in new text end 3.9 new text begin connection with, and incidental to, a portable electronics transaction with a customer. new text end 3.10 new text begin (b) A limited lines license issued under this subdivision shall authorize any new text end 3.11 new text begin employee or authorized representative of the vendor to sell or offer coverage under a new text end 3.12 new text begin policy of portable electronics insurance to a customer in connection with, and incidental new text end 3.13 new text begin to, a portable electronics transaction at each location at which the vendor engages in new text end 3.14 new text begin portable electronics transactions. The application for such a limited lines license shall new text end 3.15 new text begin set forth each location at which the vendor offers coverage under a policy of portable new text end 3.16 new text begin electronics insurance. The vendor shall notify the commissioner within 30 days of adding new text end 3.17 new text begin or eliminating such a location. new text end 3.18 new text begin (c) Notwithstanding any other provision of law, a license issued pursuant to this new text end 3.19 new text begin section shall authorize the licensee and its employees or authorized representatives to new text end 3.20 new text begin engage only in those activities that are expressly permitted in this section. new text end 3.21     new text begin Subd. 3. new text end new text begin Requirements for sale of portable electronics insurance. new text end new text begin (a) At every new text end 3.22 new text begin location where portable electronics insurance is offered to customers, brochures or other new text end 3.23 new text begin written materials must be made available to a prospective customer which: new text end 3.24 new text begin (1) disclose that portable electronics insurance may provide a duplication of new text end 3.25 new text begin coverage already provided by a customer's homeowner's insurance policy, renter's new text end 3.26 new text begin insurance policy, or other source of coverage; new text end 3.27 new text begin (2) state that the enrollment by the customer in a portable electronics insurance new text end 3.28 new text begin program is not required in order to purchase or lease portable electronics or services; new text end 3.29 new text begin (3) summarize the material terms of the insurance coverage, including: new text end 3.30 new text begin (i) the identity of the insurer; new text end 3.31 new text begin (ii) the identity of the supervising agency; new text end 3.32 new text begin (iii) the amount of any applicable deductible and how it is to be paid; new text end 3.33 new text begin (iv) benefits of the coverage; new text end 3.34 new text begin (v) the terms for terminating or modifying coverage as set forth in the policy of new text end 3.35 new text begin portable electronics insurance; and new text end 4.1 new text begin (vi) any material exclusions, conditions, or other limitations of coverage including new text end 4.2 new text begin whether portable electronics may be repaired or replaced with similar make and model new text end 4.3 new text begin reconditioned or nonoriginal manufacturer parts or equipment; new text end 4.4 new text begin (4) describe the process for filing a claim, including a description of any new text end 4.5 new text begin requirements: new text end 4.6 new text begin (i) to return portable electronics and the maximum fee applicable in the event the new text end 4.7 new text begin customer fails to comply with any equipment return requirements; and new text end 4.8 new text begin (ii) any proof of loss requirements; and new text end 4.9 new text begin (5) state that the customer may cancel enrollment for coverage under a portable new text end 4.10 new text begin electronics insurance policy at any time and any unearned premium will be refunded new text end 4.11 new text begin on a pro rata basis. new text end 4.12 new text begin (b) Portable electronics insurance may be offered on a month to month or other new text end 4.13 new text begin periodic basis as a group or master commercial inland marine policy issued to a vendor of new text end 4.14 new text begin portable electronics under which individual customers may elect to enroll for coverage. new text end 4.15 new text begin (c) Notwithstanding any other provision of Minnesota law regarding the termination new text end 4.16 new text begin or modification of coverage under a policy of insurance, the terms for the termination new text end 4.17 new text begin or modification of coverage under a policy of portable electronics insurance issued in new text end 4.18 new text begin compliance with this chapter shall be as set forth in the policy. new text end 4.19 new text begin (d) Eligibility and underwriting standards for customers electing to enroll in new text end 4.20 new text begin coverage shall be established for each portable electronics insurance program. new text end 4.21     new text begin Subd. 4. new text end new text begin Authority of vendors of portable electronics. new text end new text begin (a) The employees and new text end 4.22 new text begin authorized representatives of vendors may sell or offer portable electronics insurance to new text end 4.23 new text begin customers and shall not be subject to licensure as an insurance producer under this chapter new text end 4.24 new text begin provided that: new text end 4.25 new text begin (1) the vendor obtains a limited lines license to authorize its employees or authorized new text end 4.26 new text begin representatives to sell or offer portable electronics insurance pursuant to this section; new text end 4.27 new text begin (2) the insurer issuing the portable electronics insurance appoints a supervising new text end 4.28 new text begin agency to supervise the administration of the program including development of a training new text end 4.29 new text begin program for employees and authorized representatives of the vendors. The training new text end 4.30 new text begin required by this subdivision shall comply with the following: new text end 4.31 new text begin (i) the training shall be delivered to all employees and authorized representatives of new text end 4.32 new text begin the vendors who sell or offer portable electronics insurance; new text end 4.33 new text begin (ii) the training may be provided in electronic form. However, if conducted in new text end 4.34 new text begin an electronic form, the supervising agency shall implement a program of in-person new text end 4.35 new text begin training conducted by licensed employees of the supervising agency to supplement the new text end 4.36 new text begin electronic training; and new text end 5.1 new text begin (iii) each employee and authorized representative shall receive basic instruction new text end 5.2 new text begin about the portable electronics insurance offered to customers and the disclosures required new text end 5.3 new text begin under subdivision 3; and new text end 5.4 new text begin (3) no employee or authorized representative of a vendor of portable electronics new text end 5.5 new text begin shall advertise, represent, or otherwise hold himself or herself out as a nonlimited lines new text end 5.6 new text begin licensed insurance producer. new text end 5.7 new text begin (b) The charges for insurance coverage may be billed and collected by the vendor of new text end 5.8 new text begin portable electronics. If billed and collected by the vendor, the charges shall be separately new text end 5.9 new text begin itemized from the charges for the purchase or lease of portable electronics or services. new text end 5.10 new text begin Vendors billing and collecting such charges shall not be required to maintain such funds new text end 5.11 new text begin in a segregated account provided that the vendor is authorized by the insurer to hold new text end 5.12 new text begin such funds in an alternative manner and remits such amounts to the supervising agency new text end 5.13 new text begin within 60 days of receipt. All funds received by a vendor from a customer for the sale of new text end 5.14 new text begin portable electronics insurance shall be considered funds held by the vendor in a fiduciary new text end 5.15 new text begin capacity for the benefit of the insurer. Vendors may receive compensation for billing new text end 5.16 new text begin and collection services. new text end 5.17    Sec. 4. Minnesota Statutes 2009 Supplement, section 60K.55, subdivision 2, is 5.18amended to read: 5.19    Subd. 2. Licensing fees. (a) In addition to fees provided for examinations and the 5.20technology surcharge required under paragraph (d), each insurance producer licensed 5.21under this chapter shall pay to the commissioner a fee of: 5.22    (1) $50 for an initial life, accident and health, property, or casualty license issued to 5.23an individual insurance producer, and a fee of $50 for each renewal; 5.24    (2) $50 for an initial variable life and variable annuity license issued to an individual 5.25insurance producer, and a fee of $50 for each renewal; 5.26    (3) $50 for an initial personal lines license issued to an individual insurance 5.27producer, and a fee of $50 for each renewal; 5.28    (4) $50 for an initial limited lines license issued to an individual insurance producer, 5.29and a fee of $50 for each renewal; 5.30    (5) $200 for an initial license issued to a business entity, and a fee of $200 for each 5.31renewal; and 5.32    (6) $500 for an initial surplus lines license, and a fee of $500 for each renewal new text begin ; new text end 5.33 new text begin (7) $100 per location for the initial and renewal of a portable electronics insurance new text end 5.34 new text begin limited lines license issued to a vendor, as defined in section 60K.381, subdivision 1, new text end 5.35 new text begin paragraph (g), engaged in portable electronics transactions at ten or fewer locations in new text end 6.1 new text begin this state as set forth in its application and any subsequent notice under section 60K.381, new text end 6.2 new text begin subdivision 2, paragraph (b); and new text end 6.3 new text begin (8) $6,500 for the initial and renewal of a portable electronics insurance limited lines new text end 6.4 new text begin license issued to a vendor, as defined in section 60K.381, subdivision 1, paragraph (g), new text end 6.5 new text begin engaged in portable electronics transactions at more than ten locations in this state as set new text end 6.6 new text begin forth in its application and any subsequent notice under section 60K.381, subdivision 2, new text end 6.7 new text begin paragraph (b) new text end . 6.8    (b) Initial licenses issued to a business entity under this chapter are valid for a period 6.9not to exceed 24 months and expire on October 31 of the renewal year assigned by the 6.10commissioner. Initial licenses issued to an individual insurance producer under this 6.11chapter before August 1, 2010, are valid for a period not to exceed 24 months and expire 6.12on October 31 of the renewal year assigned by the commissioner. Each individual license 6.13initially issued or renewed on or after August 1, 2010, expires on the last day of the birth 6.14month of the producer in the year that will result in the term of the license being at least 6.1512 months, but no more than 24 months. Beginning with the first license expiration on 6.16the last day of the birth month of an individual producer as set forth in this paragraph, all 6.17such licenses must after this date expire biennially on the last day of the birth month of the 6.18individual producer that is two years subsequent to the preceding expiration date. Each 6.19renewal insurance producer license is valid for a period of 24 months. 6.20    (c) All fees are nonreturnable, except that an overpayment of any fee may be 6.21refunded upon proper application. 6.22    (d) In addition to the fees required under paragraph (a), individual insurance 6.23producers shall pay, for each initial license and renewal, a technology surcharge of up to 6.24$40 under section 45.24, unless the commissioner has adjusted the surcharge as permitted 6.25under that section. 6.26    Sec. 5. new text begin APPROPRIATION. new text end 6.27 new text begin $39,000 in fiscal year 2011 is appropriated from the general fund to the commissioner new text end 6.28 new text begin of commerce for implementing this act. The base appropriation for this program is new text end 6.29 new text begin $40,000 in fiscal year 2012 and $41,000 in fiscal year 2013. new text end