BILL REQ. #: H-3137.2
State of Washington | 62nd Legislature | 2012 Regular Session |
Read first time 01/16/12. Referred to Committee on Business & Financial Services.
AN ACT Relating to specialty producer licenses; amending RCW 48.120.005, 48.120.010, 48.120.015, and 48.120.020; and adding a new section to chapter 48.120 RCW.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1 RCW 48.120.005 and 2008 c 217 s 94 are each amended to
read as follows:
The definitions in this section apply throughout this chapter
unless the context clearly requires otherwise.
(1) (("Communications equipment" means handsets, pagers, personal
digital assistants, portable computers, automatic answering devices,
batteries, and their accessories or other devices used to originate or
receive communications signals or service approved for coverage by rule
of the commissioner, and also includes services related to the use of
the devices.)) "Portable electronics" means personal, self-contained,
easily carried by an individual, battery-operated electronic
communication, viewing, listening, recording, gaming, computing or
global positioning devices, including cell or satellite phones, pagers,
personal global positioning satellite units, portable computers,
portable audio listening, video viewing or recording devices, digital
cameras, video camcorders, portable gaming systems, docking stations,
automatic answering devices, and other similar devices and their
accessories, and service related to the use of such devices.
(2) "((Communications equipment)) Portable electronics insurance
program" means an insurance program as described in RCW 48.120.015.
(3) (("Communications service" means the service necessary to send,
receive, or originate communications signals)) "Portable electronics
transaction" means the sale or lease of portable electronics or the
sale of a service related to the use of portable electronics by a
vendor to a customer.
(4) "Customer" means a person or entity ((purchasing or leasing
communications equipment or communications services from)) that enters
into a portable electronics transaction with a vendor.
(5) "Specialty producer license" means a license issued under RCW
48.120.010 that authorizes a vendor to offer or sell insurance as
provided in RCW 48.120.015.
(6) "Supervising ((agent)) entity" means a licensed insurer or an
appointed insurance producer licensed under RCW 48.17.090 who provides
training as described in RCW 48.120.020 and is ((affiliated to a
licensed vendor)) appointed by an insurer to supervise the
administration of a portable electronics insurance program.
(7) "Vendor" means a person or entity resident or with offices in
this state in the business of ((leasing, selling, or providing
communications equipment or communications service to customers)),
directly or indirectly, engaging in portable electronics transactions.
(8) "Appointing insurer" means the insurer appointing the vendor as
its agent under a specialty producer license.
(9) "Federal securities law" means the securities act of 1933, the
securities exchange act of 1934, and the investment company act of
1940.
(10) "Location" means any physical locale in this state and any web
site, call center site, or similar site directed to residents of this
state.
Sec. 2 RCW 48.120.010 and 2008 c 217 s 95 are each amended to
read as follows:
(1) A vendor that intends to offer insurance under RCW 48.120.015
must file a specialty producer license application with the
commissioner. Before the commissioner issues such a license, the
vendor must be appointed as the insurance producer of one or more
authorized appointing insurers under a vendor's specialty producer
license.
(2) Upon receipt of an application, if the commissioner is
satisfied that the application is complete, the commissioner may issue
a specialty producer license to the vendor.
(3) An application submitted under this section must include:
(a)(i) The name, residence address, and other information required
by the commissioner for an employee or officer of the vendor that is
designated by the applicant as the person responsible for the vendor's
compliance with the requirements of this chapter.
(ii) The information required in (a)(i) of this subsection for all
of the vendor's officers, directors, and shareholders of record having
beneficial ownership of ten percent or more of any class of securities
registered under federal securities law if the vendor derives more than
fifty percent of its revenue from the sale of portable electronics
insurance;
(b) The location of the applicant's home office; and
(c) The written materials in RCW 48.120.020(1)(a).
(4) The written materials in RCW 48.120.020(1)(a) must also be
provided each time that a vendor seeks to renew their license.
Sec. 3 RCW 48.120.015 and 2002 c 357 s 3 are each amended to read
as follows:
(1) A specialty producer license authorizes a vendor and its
employees and authorized representatives to offer and sell to, enroll
in, and bill and collect premiums from customers for insurance covering
((communications equipment)) portable electronics on a master,
corporate, or group commercial inland marine policy, or on an
individual policy basis at each location at which the vendor engages in
portable electronics transactions. However:
(a) The supervising entity must maintain a registry of a vendor's
locations in this state that are authorized to sell or solicit portable
electronics insurance coverage; and
(b) The registry under (a) of this subsection must be provided to
the commissioner within ten days of a request by the commissioner.
(2) An employee or authorized representative of a vendor may sell
or offer portable electronics insurance to the vendor's customers
without being individually licensed as an insurance producer if the
vendor is licensed under this chapter and is acting in compliance with
this chapter and any rules adopted by the commissioner.
(3) A vendor billing and collecting premiums from customers for
portable electronics insurance coverage is not required to maintain
these funds in a segregated account if the vendor:
(a) Is authorized by the insurer to hold the funds in an
alternative manner; and
(b) Remits the funds to the supervising entity within sixty days of
receipt.
(4) All funds received by a vendor from an enrolled customer for
the sale of portable electronics insurance are considered funds held in
trust by the vendor in a fiduciary capacity for the benefit of the
insurer.
(5) Any charge to the enrolled customer for coverage that is not
included in the cost associated with the purchase or lease of portable
electronics or related services must be separately itemized on the
enrolled customer's bill.
(6) If portable electronics insurance coverage is included with the
purchase or lease of portable electronics or related services, the
vendor must clearly and conspicuously disclose to the enrolled customer
that the portable electronics insurance coverage is included with the
portable electronics or related services.
(7) Vendors may receive compensation for billing and collection
services.
Sec. 4 RCW 48.120.020 and 2002 c 357 s 4 are each amended to read
as follows:
(1) A vendor issued a specialty producer license may not issue
insurance under RCW 48.120.015 unless:
(a) At every location where customers are enrolled in
((communications equipment)) portable electronics insurance programs,
written material regarding the program is made available to prospective
customers; and
(b) The ((communications equipment)) portable electronics insurance
program is operated with the participation of a supervising ((agent))
entity who, with authorization and approval from the appointing
insurer, supervises a training program for employees of the licensed
vendor.
(2) Employees and authorized representatives of a vendor issued a
specialty producer license may only act on behalf of the vendor in the
offer, sale, solicitation, or enrollment of customers in a
((communications equipment)) portable electronics insurance program.
The conduct of these employees and authorized representatives within
the scope of their employment or agency is the same as conduct of the
vendor for purposes of this title.
NEW SECTION. Sec. 5 A new section is added to chapter 48.120 RCW
to read as follows:
(1) The cancellation provisions in RCW 48.18.290 and the nonrenewal
provisions in RCW 48.18.2901 do not apply to portable electronics
insurance policies issued under this chapter.
(2) An insurer may terminate or otherwise change the terms and
conditions of a policy of portable electronics insurance only:
(a) Upon providing the policyholder and enrolled customers with at
least thirty days' notice; or
(b) As provided in subsections (4) and (5) of this section.
(3) If an insurer changes the terms and conditions, then the
insurer must provide:
(a) The vendor policyholder with a revised policy or endorsement;
and
(b) Each enrolled customer with:
(i) A revised certificate, endorsement, updated brochure, or other
evidence indicating a change in the terms and conditions has occurred;
and
(ii) A summary of material changes.
(4) An insurer may terminate an enrolled customer's enrollment
under a portable electronics insurance policy upon fifteen days' notice
for discovery of fraud or material misrepresentation in obtaining
coverage or in the presentation of a claim.
(5) An insurer may immediately terminate an enrolled customer's
enrollment under a portable electronics insurance policy:
(a) For nonpayment of premium;
(b) If the enrolled customer ceases to have an active service with
the vendor of portable electronics; or
(c) If an enrolled customer exhausts the aggregate limit of
liability, if any, under the terms of the portable electronics
insurance policy and the insurer sends notice of termination to the
enrolled customer within thirty calendar days after exhaustion of the
limit. However, if notice is not timely sent, enrollment continues
notwithstanding the aggregate limit of liability until the insurer
sends notice of termination to the enrolled customer.
(6) When a portable electronics insurance policy is terminated by
a policyholder, the policyholder must mail or deliver written notice to
each enrolled customer advising the enrolled customer of the
termination of the policy and the effective date of termination. The
written notice must be mailed or delivered to the enrolled customer at
least thirty days prior to the termination.
(7) Any notice or correspondence with respect to a policy of
portable electronics insurance required under this section or otherwise
required by law must be in writing. A notice and correspondence may be
sent either by mail or by electronic means. If the notice or
correspondence is mailed, it must be sent to the vendor of portable
electronics at the vendor's mailing address specified for that purpose
and to its affected enrolled customers' last known mailing addresses on
file with the insurer.
The insurer or vendor of portable electronics, as the case may be,
must maintain proof of mailing in a form authorized or accepted by the
United States postal service or other commercial mail delivery service.
If a notice or correspondence is sent by electronic means, it must be
sent to the vendor of portable electronics at the vendor's electronic
mail address specified for that purpose and to its affected enrolled
customers' last known electronic mail address as provided by each
enrolled customer to the insurer or vendor of portable electronics, as
the case may be.
For purposes of this subsection, an enrolled customer's provision
of an electronic mail address to the insurer, supervising entity, or
vendor of portable electronics means that the enrolled customer
consents to receive notices and correspondence by electronic mail. The
insurer or vendor of portable electronics, as the case may be, must
maintain proof that the notice or correspondence was sent.
(8) Notice or correspondence required by this section or otherwise
required by law may be sent by the supervising entity appointed by the
insurer on behalf of an insurer or a vendor.