Section 60K.381 Sale of Portable Electronics Insurance
60K.381 SALE OF PORTABLE ELECTRONICS INSURANCE.
Subdivision 1.Definitions.
For purposes of this section, the following terms have the following meanings:
(a) "Customer" means a person who purchases portable electronics or services.
(b) "Covered customer" means a customer who elects coverage under a portable electronics insurance policy issued to a vendor of portable electronics.
(c) "Portable electronics" means electronic devices that are portable in nature, their accessories, and services related to the use of the device.
(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.
(2) "Portable electronics insurance" does not include:
(i) a service contract governed by chapter 59B;
(ii) a policy of insurance covering a seller's or a manufacturer's obligations under a warranty; or
(iii) a homeowner's, renter's, private passenger automobile, commercial multiperil, or similar policy that covers loss or theft of portable electronics.
(e) "Portable electronics transaction" means:
(1) the sale or lease of portable electronics by a vendor to a customer; or
(2) the sale of a service related to the use of portable electronics by a vendor to a customer.
(f) "Supervising agency" means a business entity that is a licensed insurance producer.
(g) "Vendor" means a business entity in the business of engaging in portable electronics transactions, directly or indirectly.
Subd. 2.Licensure of vendors.
(a) A vendor is required to hold a limited lines license issued under this section 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.
(b) A limited lines license issued under this section 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.
(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.
Subd. 3.Requirements for sale of portable electronics insurance.
(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:
(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;
(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;
(3) summarize the material terms of the insurance coverage, including:
(i) the identity of the insurer;
(ii) the identity of the supervising agency;
(iii) the amount of any applicable deductible and how it is to be paid;
(iv) benefits of the coverage;
(v) the terms for terminating or modifying coverage as set forth in the policy of portable electronics insurance; and
(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;
(4) describe the process for filing a claim, including a description of any requirements:
(i) to return portable electronics and the maximum fee applicable in the event the customer fails to comply with any equipment return requirements; and
(ii) any proof of loss requirements; and
(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.
(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.
(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.
(d) Eligibility and underwriting standards for customers electing to enroll in coverage shall be established for each portable electronics insurance program.
Subd. 4.Authority of vendors of portable electronics.
(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:
(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;
(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:
(i) the training shall be delivered to all employees and authorized representatives of the vendors who sell or offer portable electronics insurance;
(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
(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
(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.
(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.
History:
2010 c 347 art 6 s 3