Relates to wireless communications equipment insurance; defines terms; provides that with respect to wireless communications equipment insurance premiums, vendors billing and collecting such changes shall not be required to maintain funds in a segregated account; requires notice or correspondence with respect to a policy of wireless communications equipment insurance be in writing; makes related provisions.
STATE OF NEW YORK
________________________________________________________________________
207
2019-2020 Regular Sessions
IN ASSEMBLY(Prefiled)
January 9, 2019
___________
Introduced by M. of A. CAHILL -- read once and referred to the Committee
on Insurance
AN ACT to amend the insurance law, in relation to wireless communi-
cations equipment insurance
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 2101 of the insurance law is amended by adding a
2 new subsection (z) to read as follows:
3 (z) For purposes of section two thousand one hundred thirty-one of
4 this article, with respect to wireless communications equipment insur-
5 ance:
6 (1) "Customer" means a person who purchases wireless communications
7 equipment or service;
8 (2) "Enrolled customer" means a customer who elects coverage under a
9 wireless communications equipment insurance policy issued to a vendor of
10 wireless communications equipment;
11 (3) "Location" means any physical location in the state of New York or
12 any website, call center site or similar location directed to residents
13 of the state of New York;
14 (4) "Wireless communications equipment" shall mean electronic devices
15 that are portable in nature and their accessories;
16 (5)(A) "Wireless communications equipment insurance" means insurance
17 providing coverage for the repair or replacement of wireless communi-
18 cations equipment which may provide coverage for wireless communications
19 equipment against any one or more of the following causes of loss: loss,
20 theft, inoperability due to mechanical failure, malfunction, damage or
21 other similar causes of loss. Wireless communications equipment insur-
22 ance also includes any agreement whereby a person or any legal entity,
23 in exchange for consideration paid, agrees to provide for the future
24 repair, replacement or provision of wireless communications equipment.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD00052-01-9
A. 207 2
1 It includes any arrangement that seeks to provide substantially similar
2 benefits through other means including arrangements that confer benefits
3 upon consumers that purchase, including installment sale purchases, or
4 lease wireless communications equipment or wireless services, regardless
5 of whether the benefits are provided directly or indirectly to the
6 consumer, where the benefits include the repair or replacement of the
7 covered device, the provision of a loaner or rental device, or the
8 payment of indemnification in the event of a loss of a covered device,
9 and where the benefits are expressly or impliedly conditioned on the
10 happening of some fortuitous event such as the loss, theft or physical
11 damage of the covered device, or is structured as a remedy in the event
12 of such perils without expressly stating those perils as a condition of
13 coverage.
14 (B) "Wireless communications equipment insurance" does not include:
15 (i) a service contract pursuant to article seventy-nine of this chap-
16 ter or extended warranty providing coverage limited to the repair,
17 replacement or maintenance of property for the operational or structural
18 failure of property due to a defect in materials, workmanship, acci-
19 dental damage from handling, power surges, or normal wear and tear;
20 (ii) a policy of insurance covering a seller's or a manufacturer's
21 obligations under a warranty; or
22 (iii) a homeowners', renters', private passenger automobile, commer-
23 cial multi-peril, or similar policy.
24 (6) "Wireless communications equipment transaction" means:
25 (A) the sale or lease of wireless communications equipment by a vendor
26 to a customer; or
27 (B) the sale of a service related to the use of wireless communi-
28 cations equipment by a vendor to a customer.
29 (7) "Supervising entity" means a business entity that is a licensed
30 insurer or insurance producer that is authorized by an insurer to super-
31 vise the administration of a wireless communications equipment insurance
32 program.
33 (8) "Vendor" means a person in the business of engaging in wireless
34 communications equipment transactions directly or indirectly.
35 (9) "Wireless communications service" means telephonic and/or data
36 transmission service over a wireless network through wireless communi-
37 cations equipment.
38 § 2. Section 2131 of the insurance law, as amended by chapter 582 of
39 the laws of 2003, the section heading and subsections (a), (d), (e),
40 (f), (h) and (i) as amended by chapter 368 of the laws of 2010, and
41 subsection (g) as amended by chapter 426 of the laws of 2005, is amended
42 to read as follows:
43 § 2131. Limited license for rental vehicle companies, wireless commu-
44 nications equipment vendors and self-service storage companies. (a) The
45 superintendent may issue to a rental vehicle company, a wireless commu-
46 nications equipment vendor, a self-service storage company or to a fran-
47 chisee of a rental vehicle company, [a wireless communications equipment
48 vendor,] or a self-service storage company which has complied with the
49 requirements of this section, a limited license authorizing the licen-
50 see, known as a "limited licensee" for the purpose of this article, to
51 act as agent, with reference to the kinds of insurance specified in this
52 section, of any insurer authorized to write such kinds of insurance in
53 this state.
54 (b) [The] Except as contained in paragraph three of this subsection
55 regarding wireless communications equipment vendors the prerequisites
A. 207 3
1 for issuance of a limited license under this section shall be the filing
2 with the superintendent of the following:
3 (1) an application, signed by an officer of the applicant, for the
4 limited license in such form or forms, and supplements thereto, and
5 containing such information, as the superintendent may prescribe; and
6 (2) an appointment of a limited licensee by the appointing insurer, in
7 a format approved by the superintendent, no more than fifteen days after
8 the date the agency contract is executed or the first insurance contract
9 is submitted, whichever is later, stating that it has satisfied itself
10 that the named applicant is trustworthy and competent to act as its
11 insurance agent for this limited purpose and that the insurer will
12 appoint such applicant to act as the agent in reference to the doing of
13 such kind or kinds of insurance which are permitted by this section, if
14 the limited license applied for is issued by the superintendent. Such
15 appointment shall be subscribed by an officer or managing agent of such
16 insurer and affirmed as true under the penalties of perjury.
17 (3) For a wireless communications equipment vendor:
18 (A) A sworn application for a license under this chapter with the
19 superintendent on forms prescribed and furnished by the superintendent.
20 (B) The application shall:
21 (i) provide the name, residence address, and other information
22 required by the superintendent for an employee or officer of the vendor
23 that is designated by the applicant as the person responsible for the
24 vendor's compliance with the requirements of this chapter. However, if
25 the vendor derives more than fifty percent of its revenue from the sale
26 of wireless communications equipment insurance the information noted
27 above shall be provided for all officers, directors, and shareholders of
28 record having beneficial ownership of ten percent or more of any class
29 of securities registered under the federal securities law; and
30 (ii) the location of the applicant's home office.
31 (C) Any vendor engaging in wireless communications equipment insurance
32 transactions must obtain a license prior to offering wireless communi-
33 cations equipment insurance.
34 (c) In the event that any provision of this chapter is violated, the
35 superintendent may:
36 (1) revoke or suspend a limited license issued under this section in
37 accordance with the provisions of section two thousand one hundred ten
38 of this article; or
39 (2) after notice and hearing impose such other penalties, including
40 suspending the transaction of insurance at specific locations where
41 violations of this article have occurred, or require the vendor or
42 license holder to identify and suspend or revoke the ability of individ-
43 ual employees or authorized representatives to act under the license, as
44 the superintendent deems necessary or convenient to carry out the
45 purposes of this section.
46 (d) The rental vehicle company, wireless communications equipment
47 vendor, or self-service storage company, or franchisee licensed pursuant
48 to subsection (a) of this section may act as agent for an authorized
49 insurer only in connection with the rental of motor vehicles, the sale
50 or offering for sale of wireless communications equipment, or the rental
51 of storage space, respectively, and only with respect to the following
52 kinds of insurance:
53 (1) with respect to rental vehicle companies:
54 (A) excess liability insurance that provides coverage to the rental
55 car company or franchisee and renters and other authorized drivers of
56 rental vehicles, in excess of the standard liability limits provided by
A. 207 4
1 the rental vehicle company in its rental agreement, for liability aris-
2 ing from the negligent operation of the rental vehicle;
3 (B) accident and health insurance that provides coverage to renters
4 and other vehicle occupants, in excess to the standard first party bene-
5 fits provided pursuant to article fifty-one of this chapter, for acci-
6 dental death and/or dismemberment and for medical expenses resulting
7 from an accident that occurs during the rental period;
8 (C) personal effects insurance that provides coverage to renters and
9 other vehicle occupants for the loss of, or damage to, personal effects
10 that occurs during the rental period;
11 (D) any other coverage which the superintendent may approve as mean-
12 ingful and appropriate in connection with the rental of motor vehicles;
13 or
14 (2) with respect to wireless communications equipment vendors, [insur-
15 ance issued to cover the loss, theft, mechanical failure, or malfunction
16 of, or damage to, wireless communications equipment offered] wireless
17 communications equipment insurance as either an individual policy issued
18 to the consumer or as a group or master commercial inland marine policy
19 under which certificates or other evidence of coverage are issued to
20 individual consumers who enroll in the program[, provided however, that
21 said insurance shall not extend to wireless services or service
22 contracts governed by article seventy-nine of this chapter]; or
23 (3) with respect to self-service storage companies, the following
24 coverages offered as either an individual policy issued to the consumer
25 or as a group policy:
26 (A) personal effects insurance that provides coverage to renters of
27 storage spaces at the self-service storage company's facility for the
28 loss of, or damage to, personal property stored at the facility, where
29 the loss or damage occurs at the same facility during the rental period;
30 (B) any other coverage that the superintendent may approve as meaning-
31 ful and appropriate in connection with the rental of storage space.
32 (e) No insurance may be issued pursuant to this section unless:
33 (1) with regard to the rental of vehicles only, the rental period of
34 the rental agreement does not exceed thirty consecutive days; and
35 (2) at every location where rental vehicle agreements, wireless commu-
36 nications equipment agreements, or self-service storage agreements are
37 executed, brochures or other written materials are readily available to
38 the prospective consumer that:
39 (A) summarize, clearly and correctly, the material terms of insurance
40 coverage, including the identity of the insurer and, with regard to
41 wireless communications equipment insurance, the agent licensed under
42 subsection (b) of section two thousand one hundred three of this
43 article, the identity of the supervising entity, the amount of any
44 applicable deductible and how it is to be paid, benefits of the cover-
45 age, and key terms and conditions of coverage such as whether wireless
46 communications equipment may be repaired or replaced with similar make
47 and model reconditioned or non-original manufacturer parts or equipment;
48 (B) disclose that these policies may provide a duplication of coverage
49 already provided by a renter's personal automobile insurance policy,
50 homeowner's insurance policy, personal liability insurance policy, or
51 other source of coverage;
52 (C) state that the purchase by the consumer of the kinds of insurance
53 specified in this section is not required in order to rent a vehicle, to
54 purchase or lease wireless communications equipment, or to rent storage
55 space;
A. 207 5
1 (D) describe the process for filing a claim in the event the consumer
2 elects to purchase coverage, and with regard to wireless communications
3 equipment insurance, describe how to return wireless communications
4 equipment and the maximum fee or fees applicable in the event the
5 customer fails to comply with any equipment return requirements;
6 (E) the price, deductible, benefits, exclusions and conditions or
7 other limitations of such policies;
8 (F) disclose that the employee of the rental vehicle company, wireless
9 communications equipment vendor or self-storage company is not qualified
10 or authorized to evaluate the adequacy of the purchaser's existing
11 coverages, unless otherwise licensed; and
12 (G) notwithstanding any law, rule or regulation a wireless communi-
13 cations equipment insurance vendor shall state whether an employee may
14 earn compensation under the vendor's limited lines license as allowed
15 under subsection (g) of this section and that part of the premium paid
16 by the purchaser may be paid by the vendor to an administrator; and
17 [(G)] (H) state that the customer may cancel the insurance at any time
18 and any unearned premium will be refunded in accordance with applicable
19 law.
20 (3) with respect to wireless communications equipment insurance, the
21 written materials required by paragraph two of this subsection shall not
22 be subject to filing or approval requirements with the superintendent
23 pursuant to subsection (f) of this section.
24 [(3)] (4) evidence of coverage is provided to every consumer who
25 elects to purchase such coverage.
26 (f) Rates and forms for insurance under this section shall be subject
27 to article twenty-three of this chapter. Any brochures used in
28 connection with insurance under this section shall be filed with the
29 superintendent for review and shall include disclosure of the claims
30 filing process, premium, deductible amounts and limits and shall be
31 prominently displayed in the brochure with at least twelve-point type
32 bold headings. Any such brochures shall also be subject to section
33 three thousand one hundred two of this chapter, provided, however, that
34 any policy, certificate or other evidence of insurance coverage, whether
35 or not contained in such brochure, shall not be subject to section three
36 thousand one hundred two of this chapter, but shall be written in a
37 clear and coherent manner and whenever practicable shall use words with
38 common and everyday meaning to facilitate readability and to aid the
39 policyholder in understanding the coverage provided.
40 (g) Any limited license issued under this section shall also authorize
41 any salaried employee or any sales representative authorized by the
42 licensee who, pursuant to subsection (h) of this section, is trained to
43 act individually on behalf, and under the supervision, of the licensee
44 with respect to the kinds of insurance specified in this section.
45 Notwithstanding any other provision of law, employees or authorized
46 representatives of a vendor of wireless communications equipment shall
47 not be compensated based primarily on the number of customers enrolled
48 for wireless communications equipment insurance coverage but may receive
49 compensation for activities under the limited lines license which is
50 incidental to their overall compensation.
51 (h) Each company or franchisee licensed pursuant to this section shall
52 conduct a training program, which shall be submitted to the superinten-
53 dent for approval prior to use, and which shall meet the following mini-
54 mum standards:
55 (1) each trainee shall receive basic instruction about the kinds of
56 insurance specified in this section offered for purchase by prospective
A. 207 6
1 renters of rental vehicles, purchasers or lessors of wireless communi-
2 cations equipment, or renters of storage space;
3 (2) each trainee shall be instructed with respect to the disclosures
4 required under subsection (e) of this section and to acknowledge to a
5 prospective renter of a rental vehicle, purchaser or lessor of wireless
6 communications equipment, or renter of storage space that purchase of
7 any such insurance specified in this section is not required in order
8 for the consumer to rent a motor vehicle, purchase or lease wireless
9 communications equipment, or rent storage space;
10 (3) each trainee shall be instructed to acknowledge to a prospective
11 consumer of the kinds of insurance specified in this section that the
12 consumer may have insurance policies that already provide the coverage
13 being offered by the rental vehicle company, the wireless communications
14 equipment vendor, or self-service storage company pursuant to this
15 section; and
16 (4) with regard to wireless communications equipment insurance and
17 self-service storage company insurance, training materials may be devel-
18 oped and provided by an agent licensed pursuant to subsection (b) of
19 section two thousand one hundred three of this article.
20 (i) Limited licensees acting pursuant to and under the authority of
21 this section shall comply with all applicable provisions of this arti-
22 cle, except that notwithstanding section two thousand one hundred twenty
23 of this article, a limited licensee pursuant to this section shall not
24 be required to treat premiums collected from consumers purchasing such
25 insurance when renting motor vehicles, purchasing or leasing wireless
26 communications equipment, or renting storage space as funds received in
27 a fiduciary capacity, provided that:
28 (1) the insurer represented by the limited licensee has consented in
29 writing, signed by the insurer's officer, that premiums need not be
30 segregated from funds received by the rental vehicle company, wireless
31 communications equipment vendor, or self-storage company on account of
32 vehicle rental, wireless communications equipment purchase or lease, or
33 storage space rental; and
34 (2) the charges for insurance coverage are itemized but not billed to
35 the consumer separately from the charges for rental vehicles, purchase
36 or lease of wireless communications equipment, or storage space rental;
37 and
38 (3) with respect to wireless communications equipment insurance premi-
39 ums, vendors billing and collecting such charges shall not be required
40 to maintain such funds in a segregated account provided that the vendor
41 is authorized by the insurer to hold such funds in an alternative manner
42 and remits such amounts to the supervising entity within sixty days of
43 receipt. All funds received by a vendor from an enrolled customer for
44 the sale of wireless communications equipment insurance shall be consid-
45 ered funds held in trust by the vendor in a fiduciary capacity for the
46 benefit of the insurer. Vendors may receive compensation for billing and
47 collection services.
48 (j) No limited licensees under this section shall advertise, represent
49 or otherwise hold itself or any of its employees themselves out as
50 licensed insurance agents or brokers.
51 (k) The superintendent may issue a replacement for a currently in
52 force license which has been lost or destroyed. Before such replacement
53 license shall be issued, there shall be on file in the office of the
54 superintendent a written application for such replacement license,
55 affirming under penalty of perjury that the original license has been
56 lost or destroyed, together with a fee of fifteen dollars.
A. 207 7
1 [(l) For purposes of this section "wireless communications equipment"
2 shall mean wireless handsets, pagers, personal digital assistants, wire-
3 less telephones or wireless telephone batteries and other wireless
4 devices and accessories related to such devices that are used to access
5 wireless communications services and includes wireless services.]
6 § 3. Section 3449 of the insurance law, as added by chapter 426 of the
7 laws of 2005, is amended to read as follows:
8 § 3449. Wireless communications equipment insurance policies. (a) In
9 this section, the term "policy of wireless communications equipment
10 insurance" means an insurance policy covering the kind of insurance
11 described in subsection [(1)] (z) of section two thousand one hundred
12 [thirty-one] one of this chapter.
13 (b) (1) A group policy, and certificates issued thereunder, of wire-
14 less communications equipment insurance shall not be subject to the
15 provisions of section three thousand four hundred twenty-five or three
16 thousand four hundred twenty-six of this article.
17 (2) An insurer shall not terminate or otherwise change the terms and
18 conditions of a group policy of wireless communications equipment insur-
19 ance, and certificates issued thereunder, except upon providing the
20 policyholder and certificate holders with at least [sixty] thirty days
21 notice. If the insurer changes the terms and conditions, then the insur-
22 er shall provide the policyholder with a letter notifying them of the
23 changes, a revised policy [or], endorsement and each certificate holder
24 with a revised certificate or endorsement, an updated brochure or
25 facsimile thereof, or other evidence indicating a change in the terms
26 and conditions has occurred, and an explanation of the changes.
27 (3) Notwithstanding paragraph two of this subsection, an insurer may
28 terminate a certificate upon fifteen days notice for[:
29 (A) nonpayment of premium; or
30 (B)] discovery of fraud or material misrepresentation in obtaining the
31 certificate or in the presentation of a claim thereunder.
32 (4) Notwithstanding paragraph two of this subsection, an insurer may
33 automatically terminate a certificate if the certificate holder:
34 (A) ceases to have active telecommunications service with the wireless
35 communications equipment vendor; [or]
36 (B) nonpayment of premium; or
37 (C) exhausts the aggregate limit of liability, if any, under the
38 certificate and the insurer sends notice of termination to the certif-
39 icate holder within [fifteen] thirty business days after exhaustion of
40 the limit. However, if notice is not timely sent, coverage shall contin-
41 ue notwithstanding the aggregate limit of liability until the insurer
42 sends notice of termination to the certificate holder.
43 (5) Notwithstanding the provisions of subparagraph [(B)] (C) of para-
44 graph four of this subsection, upon the request of a certificate holder,
45 the certificate holder's coverage shall be eligible for reinstatement
46 not more than twelve months following the date of exhaustion of the
47 coverage limit in accordance with the terms of the policy and subject to
48 the enrollment criteria then applicable to prospective certificate hold-
49 ers generally.
50 (6) Where the group policy is terminated by the policyholder, the
51 policyholder shall mail or deliver written notice to each certificate
52 holder advising the certificate holder of the termination of the group
53 policy and the effective date of termination. The written notice shall
54 be mailed or delivered to the certificate holder at least thirty days
55 prior to the termination.
A. 207 8
1 (c) [Whenever notice is required pursuant to this section, it shall be
2 in writing and mailed or delivered to the policyholder at the
3 policyholder's mailing address and to affected certificate holders at
4 the certificate holders' last known mailing addresses on file with the
5 insurer.] Whenever notice or correspondence with respect to a policy of
6 wireless communications equipment insurance is required pursuant to this
7 section or is otherwise required by law, it shall be in writing and sent
8 within the time prescribed by law, if any, specified within the statute
9 or regulation requiring the notice or correspondence. Notwithstanding
10 any other provision of law, notices and correspondence may be sent
11 either by mail or by electronic means as set forth in this subsection.
12 If the notice or correspondence is mailed, it shall be sent to the
13 vendor of wireless communications equipment at the vendor's mailing
14 address specified for such purpose and to its affected enrolled custom-
15 ers' last known mailing address on file with the insurer. The insurer or
16 vendor of wireless communications equipment, as the case may be, shall
17 maintain proof of mailing in a form authorized or accepted by the United
18 States Postal Service or other commercial mail delivery service. If the
19 notice or correspondence is sent by electronic means, it shall be sent
20 to the vendor of wireless communications equipment at the vendor's elec-
21 tronic mail address specified for such purpose and to its affected
22 enrolled customers' last known electronic mail address as provided by
23 each enrolled customer to the insurer or vendor of wireless communi-
24 cations equipment, as the case may be. For purposes of this subsection,
25 an enrolled customer's provision of an electronic mail address to the
26 insurer or vendor or wireless communications equipment, as the case may
27 be, shall be deemed consent to receive notices and correspondence by
28 electronic means. The insurer or vendor of wireless communications
29 equipment, as the case my be, shall maintain proof that the notice or
30 correspondence was sent. Every notice of termination shall specify the
31 reason or reasons for termination.
32 (d) (1) Notwithstanding subsection (c) of this section, an insurer
33 shall not be required to give notice of termination to the certificate
34 holder if the insurer has been advised by either the policyholder or
35 another insurer that substantially similar coverage has been obtained
36 from the other insurer without lapse of coverage.
37 (2) A policyholder shall not be required to give notice of termination
38 to a certificate holder if substantially similar coverage has been
39 obtained from another insurer without lapse of coverage.
40 (e) Notice or correspondence required by this section or otherwise
41 required by law may be sent on behalf of an insurer or vendor, as the
42 case may be, by the supervising entity appointed by the insurer.
43 (f) Notwithstanding any other provision of the law, wireless communi-
44 cations equipment insurance may be offered on a month to month or other
45 periodic basis as a group or master commercial inland marine policy
46 issued to a vendor of portable electronics for its enrolled customers.
47 (g) The superintendent may promulgate regulations regarding policies
48 of wireless communications equipment insurance, including, but not
49 limited to, regulations governing policy terms and conditions, and may
50 establish other reasonable limitations.
51 § 4. This act shall take effect on the one hundred twentieth day after
52 it shall have become a law.
