House Bill 1198
By: Representatives Gullett of the 19th and Lumsden of the 12th
A BILL TO BE ENTITLED
AN ACT
To amend Article 1 of Chapter 23 of Title 33 of the Official Code of Georgia Annotated,
relating to agents, agencies, subagents, counselors, and adjusters relative to insurance
licensing, so as to provide for a limited license to offer or sell portable electronics and
consumer goods insurance; to revise definitions; to provide for conforming changes; to
provide for related matters; to repeal conflicting laws; and for other purposes.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION 1.
Article 1 of Chapter 23 of Title 33 of the Official Code of Georgia Annotated, relating to
agents, agencies, subagents, counselors, and adjusters relative to insurance licensing, is
amended in Code Section 33-23-1, relating to definitions, by revising paragraph (3.1) of
subsection (a) of as follows:
"(3.1) 'Automated claims adjudication system' means a preprogrammed computer system
designed for the collection, data entry, calculation, and final resolution of property
insurance claims used only for portable electronics and consumer goods as defined in
paragraph (1) of subsection (d) of Code Section 33-23-12 which:
(A) May only be utilized by a licensed independent adjuster, licensed agent, or
supervised individuals operating pursuant to this paragraph;
(B) Shall comply with all claims payment requirements of the Georgia Insurance Code;
and
(C) Shall be certified as compliant with this Code section by a licensed independent
adjuster that is an officer of a business entity licensed under this chapter."
SECTION 2.
Said article is further amended in Code Section 33-23-12, relating to limited licenses, by
revising subsections (a) and (d) as follows:
"(a) Except as provided in <del>subsection</del> <ins>subsections</ins> (b) <ins>and (b.1)</ins> of this Code section for
credit insurance licenses, <del>subsection (b.1) of this Code section,</del> subsection (c) of this Code
section for rental companies, subsection (d) of this Code section for portable electronics
<ins>and consumer goods, subsection (e) of this Code section for self-service storage facilities,
</ins> and subsection (f) of this Code section for travel insurance, the Commissioner may provide
by rule or regulation for licenses which are limited in scope to specific lines or sublines of
insurance."
"(d)(1) As used in this subsection, the term:
(A) <ins>'Consumer goods' means goods that are used or bought for use primarily for
personal, family, or household purposes.
(B)</ins> 'Customer' means a person who purchases portable electronics <ins>and consumer goods
</ins> or <ins>related</ins> services.
<del>(B)(C)</del> 'Enrolled customer' means a customer who elects coverage under a portable
electronics <ins>and consumer goods</ins> insurance policy issued to a vendor of portable
electronics <ins>and consumer goods.
(C)(D)</ins> 'Location' means any physical location in this state or any website, call center
site, or similar location directed to residents of this state.
<del>(D)(E)</del> 'Portable electronics' means <ins>equipment that is not permanently affixed; is
capable of being moved; has electrical, digital, magnetic, wireless, optical,
electromagnetic, or similar capabilities; operates using batteries, rechargeable power
sources, or other energy sources; and may incorporate features responsive to user input
or environmental conditions.</ins> <del>handsets, pagers, personal digital assistants, portable
computers, automatic answering devices, cellular telephones, batteries, and other
similar devices and their accessories and includes services related to the use of such
devices, including, but not limited to, individual customer access to a wireless network.
(E)(F)</del> 'Portable electronics <ins>and consumer goods</ins> insurance' means insurance providing
coverage for the repair or replacement of portable electronics <ins>and consumer goods
</ins> which may provide coverage for portable electronics <ins>and consumer goods</ins> against any
one or more of the following: loss, theft, inoperability due to mechanical failure,
malfunction, damage, or other similar causes of loss. Such term shall not include a
service contract or extended warranty providing coverage limited to the repair,
replacement, or maintenance of property in cases of operational or structural failure due
to a defect in materials, workmanship, accidental damage from handling power surges,
or normal wear and tear.
<ins>(F)(G)</ins> 'Portable electronics <ins>and consumer goods</ins> transaction' means the sale or lease
of portable electronics <ins>and consumer goods</ins> by a vendor to a customer or the sale of a
service related to the use of portable electronics and consumer goods by a vendor to a
customer.
<del>(G)(H)</del> 'Supervising entity' means a business entity that is a licensed insurer, or
insurance producer that is authorized by a licensed insurer, to supervise the
administration of a portable electronics <ins>and consumer goods</ins> insurance program.
<del>(H)(I)</del> 'Vendor' means a person in the business of engaging in portable electronics <ins>and
consumer goods</ins> transactions directly or indirectly.
(2) The Commissioner may issue to a retail vendor of portable electronics <ins>and consumer
goods</ins> that has complied with the requirements of this subsection a limited license
authorizing the limited licensee to offer or sell portable electronics <ins>and consumer goods
</ins> insurance policies.
(3) A limited license issued under this subsection shall authorize any employee or
authorized representative of the vendor to sell or offer coverage under a policy of portable
electronics <ins>and consumer goods</ins> insurance to customers at each location where the vendor
engages in portable electronics <ins>and consumer goods</ins> transactions.
(4) The supervising entity shall maintain a registry of vendor locations that are
authorized to sell or solicit portable electronics <ins>and consumer goods</ins> insurance coverage
in this state. Upon request by the Commissioner and with ten days' notice to the
supervising entity, the registry shall be open to inspection and examination by the
Commissioner during regular business hours of the supervising entity.
(5) The sale of such insurance policies shall be limited to sales in connection with the
sale of or provision of service for portable electronics <ins>and consumer goods</ins> by the retail
vendor.
(6) At every location where portable electronics and consumer goods insurance is offered
to customers, brochures or other written materials shall be made available to a
prospective customer which:
(A) State that the enrollment by the customer in a portable electronics <ins>and consumer
goods</ins> insurance program is not required in order to purchase or lease portable
electronics <ins>and consumer goods</ins> or <ins>related</ins> services;
(B) Summarize the material terms of the insurance coverage, including:
(i) The identity of the insurer;
(ii) The identity of the supervising entity;
(iii) The amount of any applicable deductible and how it is to be paid;
(iv) Benefits of the coverage; and
(v) Key terms and conditions of coverage such as whether portable electronics <ins>and
consumer goods</ins> may be repaired or replaced with a similar make and model or with
reconditioned or nonoriginal manufacturer parts or equipment;
(C) Summarize the process for filing a claim, including a description of how to return
portable electronics <ins>and consumer goods</ins> and the maximum fee applicable in the event
the customer fails to comply with any equipment return requirements; and
(D) State that an enrolled customer may cancel enrollment for coverage under a
portable electronics <ins>and consumer goods</ins> insurance policy at any time and the person
paying the premium shall receive a refund of any applicable unearned premium.
(7) Portable electronics <ins>and consumer goods</ins> 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 <ins>and consumer goods</ins> for its enrolled
customers. Coverage under portable electronics <ins>and consumer goods</ins> insurance shall be
primary to any other insurance.
(8) Eligibility and underwriting standards for customers electing to enroll in coverage
shall be established for each portable electronics and consumer goods insurance program.
(9) Notwithstanding any other provision of law, employees or authorized representatives
of a vendor of portable electronics <ins>and consumer goods</ins> shall not be compensated based
primarily on the number of customers enrolled for portable electronics <ins>and consumer
goods</ins> insurance coverage but may receive compensation for activities under the limited
license which are incidental to their overall compensation.
(10) The charges for portable electronics <ins>and consumer goods</ins> insurance coverage may
be billed and collected by the vendor of portable electronics <ins>and consumer goods.</ins> Any
charge to the enrolled customer for coverage that is not included in the cost associated
with the purchase or lease of portable electronics <ins>and consumer goods</ins> or related services,
shall be separately itemized on the enrolled customer's bill. If the portable electronics
<ins>and consumer goods</ins> insurance coverage is included with the purchase or lease of portable
electronics <ins>and consumer goods</ins> or related services, the vendor shall clearly and
conspicuously disclose to the enrolled customer that the portable electronics <ins>and
consumer goods</ins> insurance coverage is included with the portable electronics <ins>and
consumer goods</ins> or related 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 entity within 60 days of receipt. All funds received by a
vendor from an enrolled customer for the sale of portable electronics <ins>and consumer goods
</ins> insurance shall be considered funds held in trust by the vendor in a fiduciary capacity for
the benefit of the insurer. Vendors may receive compensation for billing and collection
services.
(11) As a prerequisite for issuance of a limited license under this subsection, there shall
be filed with the Commissioner an application for such limited license or licenses in a
form and manner prescribed by the Commissioner. The application shall provide:
(A) The name, residence address, and other information required by the Commissioner
of an employee or officer of the vendor that is designated by the applicant as the person
responsible for the vendor's compliance with the requirements of this subsection;
(B) If the vendor derives more than 50 percent of its revenue from the sale of portable
electronics <ins>and consumer goods</ins> insurance, the information required by subparagraph
(A) of this paragraph for all officers, directors, and shareholders of record having
beneficial ownership of 10 percent or more of any class of securities registered under
the federal securities law; and
(C) The location of the applicant's home office.
(12) The employees and authorized representatives of vendors may sell or offer portable
electronics <ins>and consumer goods</ins> insurance to customers and shall not be subject to
licensure as an insurance producer under this Code section, provided that the supervising
entity supervises the administration of a training program in which employees and
authorized representatives of a vendor shall be trained and receive basic insurance
instruction about the kind of coverage authorized in this subsection and offered for
purchase by prospective purchasers. The training required by this subsection may be
provided in electronic form. However, if provided in electronic form, the supervising
entity shall implement a supplemental education program regarding the portable
electronics <ins>and consumer goods</ins> insurance that is conducted and overseen by an instructor
licensed under this article.
(13) No prelicensing examination shall be required for issuance of such license.
(14) If a vendor or its employee or authorized representative violates any provision of
this subsection, the Commissioner may impose any of the following penalties:
(A) After notice and hearing, fines not to exceed $500.00 per violation or $5,000.00
in the aggregate for such conduct;
(B) After notice and hearing, other penalties that the Commissioner deems necessary
and reasonable to carry out the purpose of this article, including:
(i) Suspending the privilege of transacting portable electronics <ins>and consumer goods
</ins> insurance pursuant to this subsection at specific business locations where violations
have occurred; and
(ii) Suspending or revoking the ability of individual employees or authorized
representatives to act under the license;.
(15) Notwithstanding any other provision of law:
(A) An insurer may terminate or otherwise change the terms and conditions of a policy
of portable electronics <ins>and consumer goods</ins> insurance only upon providing the
policyholder and enrolled customers with at least 60 days' notice;
(B) If the insurer changes the terms and conditions, then such insurer shall provide the
vendor with a revised policy or endorsement and each enrolled customer with a revised
certificate, endorsement, updated brochure, or other evidence indicating a change in the
terms and conditions has occurred and a summary of such changes;
(C) Notwithstanding subparagraph (A) of this paragraph, an insurer may terminate an
enrolled customer's enrollment under a portable electronics <ins>and consumer goods
</ins> insurance policy upon 15 days' notice for discovery of fraud or material
misrepresentation in obtaining coverage or in the presentation of a claim;
(D) Notwithstanding subparagraph (A) of this paragraph, an insurer may immediately
terminate an enrolled customer's enrollment under a portable electronics <ins>and consumer
goods</ins> insurance policy:
(i) For nonpayment of premium;
(ii) If the enrolled customer ceases to have an active service with the vendor of
portable electronics <ins>and consumer goods;</ins> or
(iii) If the enrolled customer exhausts the aggregate limit of liability, if any, under the
terms of the portable electronics <ins>and consumer goods</ins> insurance policy and the insurer
sends notice of termination to the enrolled customer within 30 calendar days after
exhaustion of the limit. However, if notice is not timely sent, enrollment shall
continue notwithstanding the aggregate limit of liability until the insurer sends notice
of termination to the enrolled customer; and
(E) When a portable electronics <ins>and consumer goods</ins> insurance policy is terminated by
a policyholder, the vendor shall mail or deliver written notice to each enrolled customer
advising the enrolled customer of the termination of the policy and the effective date
of termination. The written notice shall be mailed or delivered to the enrolled customer
at least 30 days prior to the termination.
(16) Whenever notice or correspondence with respect to a policy of portable electronics
<ins>and consumer goods</ins> insurance is required pursuant to this subsection or is otherwise
required by law, it shall be in writing and sent within the notice period, if any, specified
within the statute or regulation requiring the notice or correspondence. Notwithstanding
any other provision of law, notices and correspondence may be sent either by mail or by
electronic means as set forth in this paragraph. If the notice or correspondence is mailed,
it shall be sent to the vendor of portable electronics and consumer goods at the vendor's
mailing address specified for such purpose and to its affected enrolled customers' last
known mailing addresses on file with the insurer. The insurer or vendor of portable
electronics <ins>and consumer goods,</ins> as the case may be, shall maintain proof of mailing in
a form authorized or accepted by the United States Postal Service or other commercial
mail delivery service. If the notice or correspondence is sent by electronic means, it shall
be sent to the vendor of portable electronics <ins>and consumer goods</ins> at the vendor's email
address specified for such purpose and to its affected enrolled customers' last known
email address as provided by each enrolled customer to the insurer or vendor of portable
electronics <ins>and consumer goods,</ins> as the case may be. For purposes of this paragraph, an
enrolled customer's provision of an email address to the insurer or vendor of portable
electronics <ins>and consumer goods,</ins> as the case may be, shall be deemed as consent to
receive notices and correspondence by electronic means. The insurer or vendor of
portable electronics <ins>and consumer goods,</ins> as the case may be, shall maintain proof that
the notice or correspondence was sent.
(17) Notice or correspondence required by this subsection or otherwise required by law
may be sent on behalf of an insurer or vendor, as the case may be, by the supervising
entity appointed by the insurer."
SECTION 3.
All laws and parts of laws in conflict with this Act are repealed.