FINAL BILL REPORT

ESHB 2224

C 357 L 02

Synopsis as Enacted

Brief Description:  Licensing specialty producers of certain lines of insurance.

Sponsors:  By House Committee on Financial Institutions & Insurance (originally sponsored by Representatives Benson and Hatfield).

House Committee on Financial Institutions & Insurance

Senate Committee on Labor, Commerce & Financial Institutions

Background:

The Office of the Insurance Commissioner (OIC) regulates the licensing of agents, brokers, solicitors, and adjusters within the insurance industry.  Such insurance professionals must be licensed in accordance with specific statutory criteria and may not engage in insurance marketing activities without the requisite license.  In addition to the submission of an application, a prospective licensee must pass an examination designed to test his or her qualifications and competence.

Many retailers of consumer electronics products offer insurance to customers covering the theft, loss, or damage of such products. This type of  insurance is generally sold to retail customers by employees of the retailer at the time of the purchase of the product. The marketing of such insurance by retailers is not subject to regulation by the OIC and does not require that the retailer be licensed.

Summary:

The OIC is authorized to implement a regulatory scheme governing the insurance marketing practices of specified communications equipment retailers.

In order to market insurance products to customers,  a retailer of communications equipment  must obtain a specialty producer license from the OIC.  "Communications equipment" includes cell phones, pagers, portable computers, and myriad other devices designed to originate or receive communications signals. The license allows the retailer and its employees or authorized representatives to market insurance related to the sale of such equipment.  The OIC is authorized to adopt rules expanding the categories of covered equipment.

Before a license may be issued to the retailer, it must be appointed as the agent of an authorized insurer.  Furthermore, the operation of  the communications equipment insurance program requires that the retailer affiliate with a state licensed insurance agent, who must supervise a training program for the retailer=s employees.

Licensed retail establishments are required to provide prospective customers with written materials disclosing the terms of the insurance program. 

The OIC is granted extensive rulemaking authority to implement this program.

Votes on Final Passage:

House970

Senate461(Senate amended)

House940(House concurred)

Effective:  June 13, 2002