Full Text of HB1284 97th General Assembly
HB1284ham002 97TH GENERAL ASSEMBLY | Rep. Monique D. Davis Filed: 4/1/2011
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| 1 | | AMENDMENT TO HOUSE BILL 1284
| 2 | | AMENDMENT NO. ______. Amend House Bill 1284 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 1. Short title. This Act may be cited as the | 5 | | Portable Electronics Insurance Act. | 6 | | Section 5. Definitions. For purposes of this Act, the | 7 | | following terms have the following meanings: | 8 | | "Customer" means a person who purchases portable | 9 | | electronics or services. | 10 | | "Department" means the Department of Insurance. | 11 | | "Director" means the Director of Insurance. | 12 | | "Enrolled customer" means a customer who elects coverage | 13 | | under a portable electronics insurance policy issued to a | 14 | | vendor of portable electronics. | 15 | | "Location" means any physical location in this State or any | 16 | | website, call center site, or similar location directed to |
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| 1 | | residents of this State. | 2 | | "Portable electronics" means electronic devices that are | 3 | | portable in nature, including their accessories and services | 4 | | related to the use of the device. | 5 | | "Portable electronics insurance" means insurance providing | 6 | | coverage for the repair or replacement of portable electronics, | 7 | | which may provide coverage for portable electronics against any | 8 | | one or more of the following causes of loss: loss, theft, | 9 | | inoperability due to mechanical failure, malfunction, damage, | 10 | | or other similar causes of loss. "Portable electronics | 11 | | insurance" does not include a service contract pursuant to the | 12 | | Service Contract Act, a policy of insurance covering a seller's | 13 | | or a manufacturer's obligations under a warranty, or a | 14 | | homeowner's, renter's, private passenger automobile, | 15 | | commercial multi-peril, or similar policy. | 16 | | "Portable electronics transaction" means the sale or lease | 17 | | of portable electronics by a vendor to a customer or the sale | 18 | | of a service related to the use of portable electronics by a | 19 | | vendor to a customer. | 20 | | "Supervising entity" means a business entity that is a | 21 | | licensed insurance producer or insurer. | 22 | | "Vendor" means a person in the business of engaging in | 23 | | portable electronics transactions directly or indirectly.
| 24 | | Section 10. Licensure of vendors. | 25 | | (a) In order to sell or offer coverage under a policy of |
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| 1 | | portable electronics
insurance, a vendor is required to hold a | 2 | | limited-lines license. | 3 | | (b) A limited-lines license issued under this Act shall | 4 | | authorize any employee or authorized representative of the | 5 | | vendor to sell or offer coverage under a policy of portable | 6 | | electronics insurance to a customer at each location at which | 7 | | the vendor engages in portable electronics transactions. | 8 | | (c) In connection with a vendor's application for licensure | 9 | | and quarterly thereafter, the vendor shall provide a list to | 10 | | the Director of all locations in this State at which it offers | 11 | | coverage. | 12 | | (d) Notwithstanding any other provision of law, a license | 13 | | issued pursuant to this Act shall authorize the licensee and | 14 | | its employees or authorized representatives to engage only in | 15 | | those activities that are permitted in this Act. | 16 | | Section 15. Requirements for sale of portable electronics | 17 | | insurance. | 18 | | (a) At every location where portable electronics insurance | 19 | | is offered to customers, brochures or other written materials | 20 | | must be made available to a prospective customer. The brochures | 21 | | or other written materials shall do all of the following: | 22 | | (1) disclose that portable electronics insurance may | 23 | | provide a duplication of coverage already provided by a | 24 | | customer's homeowner's insurance policy, renter's | 25 | | insurance policy, or other source of coverage; |
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| 1 | | (2) state that the enrollment by the customer in a | 2 | | portable electronics insurance program is not required in | 3 | | order to purchase or lease portable electronics or | 4 | | services; | 5 | | (3) summarize the material terms of the insurance | 6 | | coverage, including: | 7 | | (A) the identity of the insurer; | 8 | | (B) the identity of the supervising entity; | 9 | | (C) the amount of any applicable deductible and how | 10 | | it is to be paid; | 11 | | (D) benefits of the coverage; and | 12 | | (E) key terms and conditions of coverage, such as | 13 | | whether portable electronics may be repaired or | 14 | | replaced with similar make and model reconditioned or | 15 | | nonoriginal manufacturer parts or equipment; | 16 | | (4) summarize the process for filing a claim, including | 17 | | a description of how to return portable electronics and the | 18 | | maximum fee applicable in the event the enrolled customer | 19 | | fails to comply with any equipment return requirements; and | 20 | | (5) state that the enrolled customer may cancel | 21 | | enrollment for coverage under a portable electronics | 22 | | insurance policy at any time and the person paying the | 23 | | premium shall receive a refund of any applicable unearned | 24 | | premium within 15 days after receipt of the refund by the | 25 | | vendor. | 26 | | (b) Portable electronics insurance may be offered on a |
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| 1 | | month-to-month or other periodic basis as a group or master | 2 | | commercial inland marine policy issued to a vendor of portable | 3 | | electronics for its enrolled customers. | 4 | | (c) Eligibility and underwriting standards for customers | 5 | | electing to enroll in coverage shall be established for each | 6 | | portable electronics insurance program. | 7 | | Section 20. Authority of vendors of portable electronics. | 8 | | (a) The employees and authorized representatives of | 9 | | vendors may sell or offer portable electronics insurance to | 10 | | customers and shall not be subject to licensure as an insurance | 11 | | producer under the Illinois Insurance Code provided that: | 12 | | (1) the vendor obtains a limited-lines license to | 13 | | authorize its employees or authorized representatives to | 14 | | sell or offer portable electronics insurance pursuant to | 15 | | this Act; | 16 | | (2) the insurer issuing the portable electronics | 17 | | insurance either directly supervises or appoints a | 18 | | supervising entity to supervise the administration of the | 19 | | program, including development of a training program for | 20 | | employees and authorized representatives of the vendors; | 21 | | the training required by this subsection (a) shall comply | 22 | | with the following:
| 23 | | (A) the training shall be delivered to employees | 24 | | and authorized representatives of a vendor who is | 25 | | directly engaged in the activity of selling or offering |
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| 1 | | portable electronics insurance; | 2 | | (B) the training may be provided in electronic | 3 | | form; if conducted in electronic form, then the | 4 | | supervising entity shall implement a supplemental | 5 | | education program regarding portable electronics | 6 | | insurance that is conducted and overseen by licensed | 7 | | employees of the supervising entity; and | 8 | | (C) each employee and authorized representative | 9 | | shall receive basic instruction about the portable | 10 | | electronics insurance offered to customers and the | 11 | | disclosures required under Section 15 of this Act; | 12 | | (3) no employee or authorized representative of a | 13 | | vendor of portable electronics shall advertise, represent, | 14 | | or otherwise hold himself or herself out as a | 15 | | nonlimited-lines licensed insurance producer. | 16 | | (b) The charges for portable electronics insurance | 17 | | coverage may be billed and collected by the vendor of portable | 18 | | electronics. If the portable electronics insurance coverage is | 19 | | included in the purchase or lease of portable electronics or | 20 | | related services, then the vendor shall clearly and | 21 | | conspicuously disclose to the customer that the portable | 22 | | electronics insurance coverage is included with the portable | 23 | | electronics or related services. If the charge for coverage is | 24 | | included in the cost associated with the purchase or lease of | 25 | | portable electronics or related services, then the vendor shall | 26 | | clearly and conspicuously disclose to the enrolled customer |
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| 1 | | that the charge for the portable electronics or related | 2 | | services includes the charge for coverage. Vendors billing and | 3 | | collecting such charges shall not be required to maintain the | 4 | | funds in a segregated account, provided that the vendor is | 5 | | authorized by the insurer to hold such funds in an alternative | 6 | | manner and remits the amounts to the supervising entity within | 7 | | 60 days after receipt. All funds received by a vendor from an | 8 | | enrolled customer for the sale of portable electronics | 9 | | insurance shall be considered funds held in trust by the vendor | 10 | | in a fiduciary capacity for the benefit of the insurer. Vendors | 11 | | may receive compensation for billing and collection services. | 12 | | Section 25. Suspension or revocation of license. If a | 13 | | vendor of portable electronics or its employee or authorized | 14 | | representative violates any provision of this Act, then the | 15 | | Director may do any of the following: | 16 | | (1) take any action in accordance with Section 500-70 | 17 | | of the Illinois Insurance Code; | 18 | | (2) impose other penalties that the Director deems | 19 | | necessary and reasonable to carry out the purpose of this | 20 | | Act, including: | 21 | | (A) suspending the privilege of transacting | 22 | | portable electronics insurance pursuant to this | 23 | | Section at specific business locations where | 24 | | violations have occurred; and | 25 | | (B) suspending or revoking the ability of |
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| 1 | | individual employees or authorized representatives to | 2 | | act under the license. | 3 | | If the supervising entity is a licensed producer and | 4 | | violates any provision of this Act, then the supervising entity | 5 | | shall be subject to Section 500-70 of the Illinois Insurance | 6 | | Code. If the supervising entity is an insurer and violates any | 7 | | provision of this Act, then the supervising entity shall be | 8 | | subject to Section 500-70 of the Illinois Insurance Code. | 9 | | Section 30. Termination of portable electronics insurance. | 10 | | Notwithstanding any other provision of law: | 11 | | (1) An insurer may terminate or otherwise change the | 12 | | terms and conditions of a policy of portable electronics | 13 | | insurance only upon providing the policyholder and | 14 | | enrolled customers with at least 60 days notice. | 15 | | (2) If the insurer changes the terms and conditions, | 16 | | then the insurer shall provide the vendor policyholder with | 17 | | a revised policy or endorsement and each enrolled customer | 18 | | with a revised certificate, endorsement, updated brochure, | 19 | | or other evidence indicating that a change in the terms and | 20 | | conditions has occurred and a summary of the material | 21 | | changes. | 22 | | (3) Notwithstanding item (2) of this Section, an | 23 | | insurer may terminate an enrolled customer's enrollment | 24 | | under a portable electronics insurance policy upon 15 days | 25 | | notice for discovery of fraud or material |
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| 1 | | misrepresentation in obtaining coverage or in the | 2 | | presentation of a claim thereunder. | 3 | | (4) Notwithstanding item (2) of this Section, an | 4 | | insurer may immediately terminate an enrolled customer's | 5 | | enrollment under a portable electronics insurance policy: | 6 | | (A) for nonpayment of premium; | 7 | | (B) if the enrolled customer ceases to have an | 8 | | active service with the vendor of portable | 9 | | electronics; or | 10 | | (C) if an enrolled customer exhausts the aggregate | 11 | | limit of liability, if any, under the terms of the | 12 | | portable electronics insurance policy and the insurer | 13 | | sends notice of termination to the enrolled customer | 14 | | within 30 calendar days after exhaustion of the limit; | 15 | | however, if notice is not timely sent, enrollment shall | 16 | | continue, notwithstanding the aggregate limit of | 17 | | liability, until the insurer sends notice of | 18 | | termination to the enrolled customer.
| 19 | | (5) When a portable electronics insurance policy is | 20 | | terminated by a policyholder, the policyholder shall mail | 21 | | or deliver written notice to each enrolled customer | 22 | | advising the enrolled customer of the termination of the | 23 | | policy and the effective date of termination. The written | 24 | | notice shall be mailed or delivered to the enrolled | 25 | | customer at least 30 days prior to the termination. | 26 | | (6) Whenever notice is required pursuant to this |
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| 1 | | Section, it shall be in writing and may be mailed or | 2 | | delivered to the vendor of portable electronics at the | 3 | | vendor's mailing address and to its affected enrolled | 4 | | customers' last known mailing addresses on file with the | 5 | | insurer. If notice is mailed, then the insurer or vendor of | 6 | | portable electronics, as the case may be, shall maintain | 7 | | proof of mailing in a form authorized or accepted by the | 8 | | United States Postal Service or other commercial mail | 9 | | delivery service. Alternatively, an insurer or vendor | 10 | | policyholder may comply with any notice required by this | 11 | | Section by providing electronic notice to a vendor or its | 12 | | affected enrolled customers, as the case may be, by | 13 | | electronic means. If notice is accomplished through | 14 | | electronic means, then the insurer or vendor of portable | 15 | | electronics shall maintain proof that the notice was sent. | 16 | | Section 35. Application for license and fees. | 17 | | (a) A sworn application for a license under this Act shall | 18 | | be made to and filed with the Department on forms prescribed | 19 | | and furnished by the Director. | 20 | | (b) In addition to other information required by the | 21 | | Director, the application shall provide the following:
| 22 | | (1) the name, residential address, and other | 23 | | information required by the Director for an employee or | 24 | | officer of the vendor that is designated by the applicant | 25 | | as the person responsible for the vendor's compliance with |
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| 1 | | the requirements of this Act; however, if the vendor | 2 | | derives more than 50% of its revenue from the sale of | 3 | | portable electronics insurance, then the information | 4 | | required pursuant to this paragraph (1) shall be provided | 5 | | for all officers, directors, and shareholder of record | 6 | | having beneficial ownership of 10% or more of any class of | 7 | | securities registered under the federal securities laws; | 8 | | and | 9 | | (2) the location of the applicant's home office. | 10 | | (c) Applications for licensure under this Act shall be made | 11 | | within 90 days after the effective date of this Act. | 12 | | (d) Initial licenses issued pursuant to this Act shall be | 13 | | valid for a period of 24 months and expire on May 31 of the | 14 | | renewal year assigned by the Director. | 15 | | (e) Each vendor of portable electronics licensed under this | 16 | | Act shall pay to the Department a fee of $500 for an initial | 17 | | and renewal portable electronics limited-lines license.
| 18 | | Section 99. Effective date. This Act takes effect January | 19 | | 1, 2012.".
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