HF 3251

1st Engrossment - 86th Legislature (2009 - 2010) Posted on 03/17/2010 12:46pm

A bill for an act
relating to insurance; regulating portable electronics insurance; amending
Minnesota Statutes 2008, sections 60K.36, subdivision 2; 60K.38, subdivision 1;
Minnesota Statutes 2009 Supplement, section 60K.55, subdivision 2; proposing
coding for new law in Minnesota Statutes, chapter 60K.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2008, section 60K.36, subdivision 2, is amended to read:

Subd. 2.

Examination not required.

A resident individual applying for a limited
lines credit insurance, title insurance, travel baggage insurance, deleted text begin mobile telephone deleted text end new text begin portable
electronics new text end insurance, or bail bonds license is not required to take a written examination.

Sec. 2.

Minnesota Statutes 2008, section 60K.38, subdivision 1, is amended to read:

Subdivision 1.

Issuance.

(a) Unless denied a license under section 60K.43, a person
who has met the requirements of sections 60K.36 and 60K.37 must be issued an insurance
producer license. An insurance producer may receive qualification for a license in one or
more of the lines of authority in paragraphs (b) deleted text begin and (c) deleted text end new text begin through (d) new text end .

(b) An individual insurance producer may receive qualification for a license in
one or more of the following major lines:

(1) life insurance: coverage on human lives including benefits of endowment and
annuities, and may include benefits in the event of death or dismemberment by accident
and benefits for disability income;

(2) accident and health or sickness insurance: coverage for sickness, bodily injury,
or accidental death, and may include benefits for disability income;

(3) property insurance: coverage for the direct or consequential loss or damage to
property of every kind;

(4) casualty insurance: coverage against legal liability, including that for death,
injury, or disability, or damage to real or personal property;

(5) variable life and variable annuity products insurance: coverage provided under
variable life insurance contracts and variable annuities; and

(6) personal lines: property and casualty insurance coverage sold to individuals and
families for primarily noncommercial purposes.

(c) An individual insurance producer may receive qualification for a license in
one or more of the following limited lines:

(1) limited line credit insurance;

(2) farm property and liability insurance;

(3) title insurance;

(4) travel baggage insurance; new text begin and
new text end

deleted text begin (5) mobile telephone insurance; and
deleted text end

deleted text begin (6) deleted text end new text begin (5) new text end bail bonds.

new text begin (d) A vendor of portable electronics insurance may receive a limited lines license
pursuant to section 60K.381.
new text end

Sec. 3.

new text begin [60K.381] SALE OF PORTABLE ELECTRONICS INSURANCE.
new text end

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
the following meanings:
new text end

new text begin (a) "Customer" means a person who purchases portable electronics or services.
new text end

new text begin (b) "Covered customer" means a customer who elects coverage under a portable
electronics insurance policy issued to a vendor of portable electronics.
new text end

new text begin (c) "Portable electronics" means electronic devices that are portable in nature, their
accessories, and services related to the use of the device.
new text end

new text begin (d)(1) "Portable electronics insurance" means insurance providing coverage for
the repair or replacement of portable electronics, which may cover portable electronics
against any one or more of the following causes of loss: loss, theft, mechanical failure,
malfunction, damage, or other applicable perils.
new text end

new text begin (2) "Portable electronics insurance" does not include:
new text end

new text begin (i) a service contract governed by chapter 59B;
new text end

new text begin (ii) a policy of insurance covering a seller's or a manufacturer's obligations under
a warranty; or
new text end

new text begin (iii) a homeowner's, renter's, private passenger automobile, commercial multiperil,
or similar policy that covers loss or theft of portable electronics.
new text end

new text begin (e) "Portable electronics transaction" means:
new text end

new text begin (1) the sale or lease of portable electronics by a vendor to a customer; or
new text end

new text begin (2) the sale of a service related to the use of portable electronics by a vendor to a
customer.
new text end

new text begin (f) "Supervising agency" means a business entity that is a licensed insurance
producer.
new text end

new text begin (g) "Vendor" means a person in the business of engaging in portable electronics
transactions, directly or indirectly.
new text end

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
license to sell or offer coverage under a policy of portable electronics insurance in
connection with, and incidental to, a portable electronics transaction with a customer.
new text end

new text begin (b) A limited lines license issued under this subdivision shall authorize any
employee or authorized representative of the vendor to sell or offer coverage under a
policy of portable electronics insurance to a customer in connection with, and incidental
to, a portable electronics transaction at each location at which the vendor engages in
portable electronics transactions. The application for such a limited lines license shall
set forth each location at which the vendor offers coverage under a policy of portable
electronics insurance. The vendor shall notify the commissioner within 30 days of adding
or eliminating such a location.
new text end

new text begin (c) Notwithstanding any other provision of law, a license issued pursuant to this
section shall authorize the licensee and its employees or authorized representatives to
engage only in those activities that are expressly permitted in this section.
new text end

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
location where portable electronics insurance is offered to customers, brochures or other
written materials must be made available to a prospective customer which:
new text end

new text begin (1) disclose that portable electronics insurance may provide a duplication of
coverage already provided by a customer's homeowner's insurance policy, renter's
insurance policy, or other source of coverage;
new text end

new text begin (2) state that the enrollment by the customer in a portable electronics insurance
program is not required in order to purchase or lease portable electronics or services;
new text end

new text begin (3) summarize the material terms of the insurance coverage, including:
new text end

new text begin (i) the identity of the insurer;
new text end

new text begin (ii) the identity of the supervising agency;
new text end

new text begin (iii) the amount of any applicable deductible and how it is to be paid;
new text end

new text begin (iv) benefits of the coverage;
new text end

new text begin (v) the terms for terminating or modifying coverage as set forth in the policy of
portable electronics insurance; and
new text end

new text begin (vi) any material exclusions, conditions, or other limitations of coverage including
whether portable electronics may be repaired or replaced with similar make and model
reconditioned or nonoriginal manufacturer parts or equipment;
new text end

new text begin (4) describe the process for filing a claim, including a description of any
requirements:
new text end

new text begin (i) to return portable electronics and the maximum fee applicable in the event the
customer fails to comply with any equipment return requirements; and
new text end

new text begin (ii) any proof of loss requirements; and
new text end

new text begin (5) state that the customer may cancel enrollment for coverage under a portable
electronics insurance policy at any time and any unearned premium will be refunded
on a pro rata basis.
new text end

new text begin (b) Portable electronics insurance may be offered on a month to month or other
periodic basis as a group or master commercial inland marine policy issued to a vendor of
portable electronics under which individual customers may elect to enroll for coverage.
new text end

new text begin (c) Notwithstanding any other provision of Minnesota law regarding the termination
or modification of coverage under a policy of insurance, the terms for the termination
or modification of coverage under a policy of portable electronics insurance issued in
compliance with this chapter shall be as set forth in the policy.
new text end

new text begin (d) Eligibility and underwriting standards for customers electing to enroll in
coverage shall be established for each portable electronics insurance program.
new text end

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
authorized representatives of vendors may sell or offer portable electronics insurance to
customers and shall not be subject to licensure as an insurance producer under this chapter
provided that:
new text end

new text begin (1) the vendor obtains a limited lines license to authorize its employees or authorized
representatives to sell or offer portable electronics insurance pursuant to this section;
new text end

new text begin (2) the insurer issuing the portable electronics insurance appoints a supervising
agency to supervise the administration of the program including development of a training
program for employees and authorized representatives of the vendors. The training
required by this subdivision shall comply with the following:
new text end

new text begin (i) the training shall be delivered to all employees and authorized representatives of
the vendors who sell or offer portable electronics insurance;
new text end

new text begin (ii) the training may be provided in electronic form. However, if conducted in
an electronic form, the supervising agency shall implement a program of in-person
training conducted by licensed employees of the supervising agency to supplement the
electronic training; and
new text end

new text begin (iii) each employee and authorized representative shall receive basic instruction
about the portable electronics insurance offered to customers and the disclosures required
under subdivision 3; and
new text end

new text begin (3) no employee or authorized representative of a vendor of portable electronics
shall advertise, represent, or otherwise hold himself or herself out as a nonlimited lines
licensed insurance producer.
new text end

new text begin (b) The charges for insurance coverage may be billed and collected by the vendor of
portable electronics. If billed and collected by the vendor, the charges shall be separately
itemized from the charges for the purchase or lease of portable electronics or services.
Vendors billing and collecting such charges shall not be required to maintain such funds
in a segregated account provided that the vendor is authorized by the insurer to hold
such funds in an alternative manner and remits such amounts to the supervising agency
within 60 days of receipt. All funds received by a vendor from a customer for the sale of
portable electronics insurance shall be considered funds held by the vendor in a fiduciary
capacity for the benefit of the insurer. Vendors may receive compensation for billing
and collection services.
new text end

Sec. 4.

Minnesota Statutes 2009 Supplement, section 60K.55, subdivision 2, is
amended to read:

Subd. 2.

Licensing fees.

(a) In addition to fees provided for examinations and the
technology surcharge required under paragraph (d), each insurance producer licensed
under this chapter shall pay to the commissioner a fee of:

(1) $50 for an initial life, accident and health, property, or casualty license issued to
an individual insurance producer, and a fee of $50 for each renewal;

(2) $50 for an initial variable life and variable annuity license issued to an individual
insurance producer, and a fee of $50 for each renewal;

(3) $50 for an initial personal lines license issued to an individual insurance
producer, and a fee of $50 for each renewal;

(4) $50 for an initial limited lines license issued to an individual insurance producer,
and a fee of $50 for each renewal;

(5) $200 for an initial license issued to a business entity, and a fee of $200 for each
renewal; deleted text begin and
deleted text end

(6) $500 for an initial surplus lines license, and a fee of $500 for each renewal new text begin ; and
new text end

new text begin (7) $5,000 for an initial portable electronics insurance limited lines license, and a
fee of $1,000 for each renewal new text end .

(b) Initial licenses issued to a business entity under this chapter are valid for a period
not to exceed 24 months and expire on October 31 of the renewal year assigned by the
commissioner. Initial licenses issued to an individual insurance producer under this
chapter before August 1, 2010, are valid for a period not to exceed 24 months and expire
on October 31 of the renewal year assigned by the commissioner. Each individual license
initially issued or renewed on or after August 1, 2010, expires on the last day of the birth
month of the producer in the year that will result in the term of the license being at least
12 months, but no more than 24 months. Beginning with the first license expiration on
the last day of the birth month of an individual producer as set forth in this paragraph, all
such licenses must after this date expire biennially on the last day of the birth month of the
individual producer that is two years subsequent to the preceding expiration date. Each
renewal insurance producer license is valid for a period of 24 months.

(c) All fees are nonreturnable, except that an overpayment of any fee may be
refunded upon proper application.

(d) In addition to the fees required under paragraph (a), individual insurance
producers shall pay, for each initial license and renewal, a technology surcharge of up to
$40 under section 45.24, unless the commissioner has adjusted the surcharge as permitted
under that section.