HB1198: HB1198 Insurance; limited license to offer or sell portable electronics and consumer goods insurance; provide

26 LC 52 0996 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 Co de of Georgia Annotated,1 relating to agents, agencies, subagents, counselors, and adjust ers relative to insurance2 licensing, so as to provide for a limited license to offer or s ell portable electronics and3 consumer goods insurance; to revise definitions; to provide for conforming changes; to4 provide for related matters; to repeal conflicting laws; and for other purposes.5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:6 SECTION 1.7 Article 1 of Chapter 23 of Title 33 of the Official Code of Geo rgia Annotated, relating to8 agents, agencies, subagents, counselors, and adjusters relative to insurance licensing, is9 amended in Code Section 33-23-1, relating to definitions, by re vising paragraph (3.1) of10 subsection (a) of as follows:11 "(3.1) 'Automated claims adjudication system' means a preprogrammed computer system12 designed for the collection, data entry, calculation, and final resolution of property13 insurance claims used only for portable electronics and consume r goods as defined in14 paragraph (1) of subsection (d) of Code Section 33-23-12 which:15 H. B. 1198 - 1 - 26 LC 52 0996 (A) May only be utilized by a licensed independent adjuster, l icensed agent, or16 supervised individuals operating pursuant to this paragraph;17 (B) Shall comply with all claims payment requirements of the Georgia Insurance Code;18 and19 (C) Shall be certified as compliant with this Code section by a licensed independent20 adjuster that is an officer of a business entity licensed under this chapter."21 SECTION 2.22 Said article is further amended in Code Section 33-23-12, relat ing to limited licenses, by23 revising subsections (a) and (d) as follows:24 "(a) Except as provided in subsection subsections (b) and (b.1) of this Code section for25 credit insurance licenses, subsection (b.1) of this Code section, subsection (c) of this Code26 section for rental companies, subsection (d) of this Code section for portable electronics27 and consumer goods, subsection (e) of this Code section for self-service storage facilities,28 and subsection (f) of this Code section for travel insurance, the Commissioner may provide29 by rule or regulation for licenses which are limited in scope to specific lines or sublines of30 insurance."31 "(d)(1) As used in this subsection, the term:32 (A) 'Consumer goods' means goods that are used or bought for u se primarily for33 personal, family, or household purposes.34 (B) 'Customer' means a person who purchases portable electronics and consumer goods35 or related services.36 (B)(C) 'Enrolled customer' means a customer who elects coverage unde r a portable37 electronics and consumer goods insurance policy issued to a vendor of portable38 electronics and consumer goods.39 (C)(D) 'Location' means any physical location in this state or any website, call center40 site, or similar location directed to residents of this state.41 H. B. 1198 - 2 - 26 LC 52 0996 (D)(E) 'Portable electronics' means equipment that is not permanently affixed; is42 capable of being moved; has electrical, digital, magnetic, wire less, optical,43 electromagnetic, or similar capabilities; operates using batteries, rechargeable power44 sources, or other energy sources; and may incorporate features responsive to user input45 or environmental conditions. handsets, pagers, personal digital assistants, portable46 computers, automatic answering devices, cellular telephones, ba tteries, and other47 similar devices and their accessories and includes services rel ated to the use of such48 devices, including, but not limited to, individual customer access to a wireless network.49 (E)(F) 'Portable electronics and consumer goods insurance' means insurance providing50 coverage for the repair or replacement of portable electronics and consumer goods51 which may provide coverage for portable electronics and consumer goods against any52 one or more of the following: loss, theft, inoperability due to mechanical failure,53 malfunction, damage, or other similar causes of loss. Such ter m shall not include a54 service contract or extended warranty providing coverage limite d to the repair,55 replacement, or maintenance of property in cases of operational or structural failure due56 to a defect in materials, workmanship, accidental damage from handling power surges,57 or normal wear and tear.58 (F)(G) 'Portable electronics and consumer goods transaction' means the sale or lease59 of portable electronics and consumer goods by a vendor to a customer or the sale of a60 service related to the use of portable electronics and consumer goods by a vendor to a61 customer.62 (G)(H) 'Supervising entity' means a business entity that is a license d insurer, or63 insurance producer that is authorized by a licensed insurer, to supervise the64 administration of a portable electronics and consumer goods insurance program.65 (H)(I) 'Vendor' means a person in the business of engaging in portable electronics and66 consumer goods transactions directly or indirectly.67 H. B. 1198 - 3 - 26 LC 52 0996 (2) The Commissioner may issue to a retail vendor of portable electronics and consumer68 goods that has complied with the requirements of this subsection a l imited license69 authorizing the limited licensee to offer or sell portable electronics and consumer goods70 insurance policies.71 (3) A limited license issued under this subsection shall autho rize any employee or72 authorized representative of the vendor to sell or offer coverage under a policy of portable73 electronics and consumer goods insurance to customers at each location where the vendor74 engages in portable electronics and consumer goods transactions.75 (4) The supervising entity shall maintain a registry of vendor locations that are76 authorized to sell or solicit portable electronics and consumer goods insurance coverage77 in this state. Upon request by the Commissioner and with ten d ays' notice to the78 supervising entity, the registry shall be open to inspection an d examination by the79 Commissioner during regular business hours of the supervising entity.80 (5) The sale of such insurance policies shall be limited to sa les in connection with the81 sale of or provision of service for portable electronics and consumer goods by the retail82 vendor.83 (6) At every location where portable electronics and consumer goods insurance is offered84 to customers, brochures or other written materials shall be mad e available to a85 prospective customer which:86 (A) State that the enrollment by the customer in a portable electronics and consumer87 goods insurance program is not required in order to purchase or leas e portable88 electronics and consumer goods or related services;89 (B) Summarize the material terms of the insurance coverage, including:90 (i) The identity of the insurer;91 (ii) The identity of the supervising entity;92 (iii) The amount of any applicable deductible and how it is to be paid;93 (iv) Benefits of the coverage; and94 H. B. 1198 - 4 - 26 LC 52 0996 (v) Key terms and conditions of coverage such as whether portable electronics and95 consumer goods may be repaired or replaced with a similar make and model or with96 reconditioned or nonoriginal manufacturer parts or equipment;97 (C) Summarize the process for filing a claim, including a description of how to return98 portable electronics and consumer goods and the maximum fee applicable in the event99 the customer fails to comply with any equipment return requirements; and100 (D) State that an enrolled customer may cancel enrollment for coverage under a101 portable electronics and consumer goods insurance policy at any time and the person102 paying the premium shall receive a refund of any applicable unearned premium.103 (7) Portable electronics and consumer goods insurance may be offered on a104 month-to-month or other periodic basis as a group or master commercial inland marine105 policy issued to a vendor of portable electronics and consumer goods for its enrolled106 customers. Coverage under portable electronics and consumer goods insurance shall be107 primary to any other insurance.108 (8) Eligibility and underwriting standards for customers elect ing to enroll in coverage109 shall be established for each portable electronics and consumer goods insurance program.110 (9) Notwithstanding any other provision of law, employees or authorized representatives111 of a vendor of portable electronics and consumer goods shall not be compensated based112 primarily on the number of customers enrolled for portable elec tronics and consumer113 goods insurance coverage but may receive compensation for activities under the limited114 license which are incidental to their overall compensation.115 (10) The charges for portable electronics and consumer goods insurance coverage may116 be billed and collected by the vendor of portable electronics and consumer goods. Any117 charge to the enrolled customer for coverage that is not includ ed in the cost associated118 with the purchase or lease of portable electronics and consumer goods or related services,119 shall be separately itemized on the enrolled customer's bill. If the portable electronics120 and consumer goods insurance coverage is included with the purchase or lease of portable121 H. B. 1198 - 5 - 26 LC 52 0996 electronics and consumer goods or related services, the vendor shall clearly and122 conspicuously disclose to the enrolled customer that the portab le electronics and123 consumer goods insurance coverage is included with the portable electronics a nd124 consumer goods or related services. Vendors billing and collecting such charges shall not125 be required to maintain such funds in a segregated account, provided that the vendor is126 authorized by the insurer to hold such funds in an alternative manner and remits such127 amounts to the supervising entity within 60 days of receipt. A ll funds received by a128 vendor from an enrolled customer for the sale of portable electronics and consumer goods129 insurance shall be considered funds held in trust by the vendor in a fiduciary capacity for130 the benefit of the insurer. Vendors may receive compensation for billing and collection131 services.132 (11) As a prerequisite for issuance of a limited license under this subsection, there shall133 be filed with the Commissioner an application for such limited license or licenses in a134 form and manner prescribed by the Commissioner. The application shall provide:135 (A) The name, residence address, and other information required by the Commissioner136 of an employee or officer of the vendor that is designated by the applicant as the person137 responsible for the vendor's compliance with the requirements of this subsection;138 (B) If the vendor derives more than 50 percent of its revenue from the sale of portable139 electronics and consumer goods insurance, the information required by subparagraph140 (A) of this paragraph for all officers, directors, and sharehol ders of record having141 beneficial ownership of 10 percent or more of any class of securities registered under142 the federal securities law; and143 (C) The location of the applicant's home office.144 (12) The employees and authorized representatives of vendors may sell or offer portable145 electronics and consumer goods insurance to customers and shall not be subject to146 licensure as an insurance producer under this Code section, provided that the supervising147 entity supervises the administration of a training program in w hich employees and148 H. B. 1198 - 6 - 26 LC 52 0996 authorized representatives of a vendor shall be trained and rec eive basic insurance149 instruction about the kind of coverage authorized in this subse ction and offered for150 purchase by prospective purchasers. The training required by t his subsection may be151 provided in electronic form. However, if provided in electroni c form, the supervising152 entity shall implement a supplemental education program regardi ng the portable153 electronics and consumer goods insurance that is conducted and overseen by an instructor154 licensed under this article.155 (13) No prelicensing examination shall be required for issuance of such license.156 (14) If a vendor or its employee or authorized representative violates any provision of157 this subsection, the Commissioner may impose any of the following penalties:158 (A) After notice and hearing, fines not to exceed $500.00 per violation or $5,000.00159 in the aggregate for such conduct;160 (B) After notice and hearing, other penalties that the Commissioner deems necessary161 and reasonable to carry out the purpose of this article, including:162 (i) Suspending the privilege of transacting portable electronics and consumer goods163 insurance pursuant to this subsection at specific business locations where violations164 have occurred; and165 (ii) Suspending or revoking th e ability of individual employee s or authorized166 representatives to act under the license;.167 (15) Notwithstanding any other provision of law:168 (A) An insurer may terminate or otherwise change the terms and conditions of a policy169 of portable electronics and consumer goods insurance only upon providing the170 policyholder and enrolled customers with at least 60 days' notice;171 (B) If the insurer changes the terms and conditions, then such insurer shall provide the172 vendor with a revised policy or endorsement and each enrolled customer with a revised173 certificate, endorsement, updated brochure, or other evidence indicating a change in the174 terms and conditions has occurred and a summary of such changes;175 H. B. 1198 - 7 - 26 LC 52 0996 (C) Notwithstanding subparagraph (A) of this paragraph, an insurer may terminate an176 enrolled customer's enrollment under a portable electronics and consumer goods177 insurance policy upon 15 days' notice for discovery of fraud or material178 misrepresentation in obtaining coverage or in the presentation of a claim;179 (D) Notwithstanding subparagraph (A) of this paragraph, an insurer may immediately180 terminate an enrolled customer's enrollment under a portable electronics and consumer181 goods insurance policy:182 (i) For nonpayment of premium;183 (ii) If the enrolled customer ceases to have an active service with the vendor of184 portable electronics and consumer goods; or185 (iii) If the enrolled customer exhausts the aggregate limit of liability, if any, under the186 terms of the portable electronics and consumer goods insurance policy and the insurer187 sends notice of termination to the enrolled customer within 30 calendar days after188 exhaustion of the limit. However, if notice is not timely sent , enrollment shall189 continue notwithstanding the aggregate limit of liability until the insurer sends notice190 of termination to the enrolled customer; and191 (E) When a portable electronics and consumer goods insurance policy is terminated by192 a policyholder, the vendor shall mail or deliver written notice to each enrolled customer193 advising the enrolled customer of the termination of the policy and the effective date194 of termination. The written notice shall be mailed or delivered to the enrolled customer195 at least 30 days prior to the termination.196 (16) Whenever notice or correspondence with respect to a policy of portable electronics197 and consumer goods insurance is required pursuant to this subsection or is otherw ise198 required by law, it shall be in writing and sent within the notice period, if any, specified199 within the statute or regulation requiring the notice or correspondence. Notwithstanding200 any other provision of law, notices and correspondence may be sent either by mail or by201 electronic means as set forth in this paragraph. If the notice or correspondence is mailed,202 H. B. 1198 - 8 - 26 LC 52 0996 it shall be sent to the vendor of portable electronics and consumer goods at the vendor's203 mailing address specified for such purpose and to its affected enrolled customers' last204 known mailing addresses on file with the insurer. The insurer or vendor of portable205 electronics and consumer goods, as the case may be, shall maintain proof of mailing in206 a form authorized or accepted by the United States Postal Service or other commercial207 mail delivery service. If the notice or correspondence is sent by electronic means, it shall208 be sent to the vendor of portable electronics and consumer good s at the vendor's email209 address specified for such purpose and to its affected enrolled customers' last known210 email address as provided by each enrolled customer to the insurer or vendor of portable211 electronics and consumer goods, as the case may be. For purposes of this paragraph, an212 enrolled customer's provision of an email address to the insure r or vendor of portable213 electronics and consumer goods , as the case may be, shall be deemed as consent to214 receive notices and correspondence by electronic means. The in surer or vendor of215 portable electronics and consumer goods, as the case may be, shall maintain proof that216 the notice or correspondence was sent.217 (17) Notice or correspondence required by this subsection or otherwise required by law218 may be sent on behalf of an insurer or vendor, as the case may be, by the supervising219 entity appointed by the insurer."220 SECTION 3.221 All laws and parts of laws in conflict with this Act are repealed.222 H. B. 1198 - 9 -