Senate Bill No. 472
Minard, original sponsor
[Passed March 12, 2011; in effect ninety days from passage.]
AN ACT to amend the Code of West Virginia, 1931, as amended, by
adding thereto a new section, designated §33-12-32a, relating
to providing an exemption from insurance licensing
requirements for vendors of portable electronics when offering
portable electronics insurance generally; defining terms;
establishing requirements and authority regarding
the sale of
portable electronics insurance
; stating authority of vendors
of portable electronics to sell portable electronics
insurance; requiring training of employees who sell portable
electronics insurance; providing for the
and imposition of fines for violations of this
section; providing for the termination of portable electronics
insurance; and giving the Insurance Commissioner the authority
to bring administrative actions on supervising entities.
Be it enacted by the Legislature of West Virginia:
That the Code of West Virginia, 1931, as amended, be amended
by adding thereto a new section, designated §33-12-32a, to read as
ARTICLE 12. Insurance Producers and Solicitors.
§33-12-32a. Exemption for Portable Electronics
(a) Definitions. For purposes of this section, the
following terms have the following meanings:
(1) "Authorized Representative" means any individual who is
authorized by a vendor to engage in portable electronic
transactions on behalf of the vendor and who conducts such
transactions under the direction and authority of such vendor;
(2) "Customer" means a person who purchases portable
electronics or services;
(3) "Enrolled Customer" means a customer who elects coverage
under a portable electronics insurance policy and issued to a
vendor of portable electronics;
(4) "Location" means any physical location in the State of
West Virginia or any website, call center site, or similar location
directed to residents of the State of West Virginia.
(5) "Portable Electronics" means electronic devices that are
portable in nature, their accessories and services related to the
use of the device;
(6) (A) "Portable Electronic 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.
(B) "Portable Electronics Insurance" does not include:
(i) A service contract or extended warranty providing coverage
limited solely to the repair, replacement, or maintenance of
property for the operational or structural failure of property due
to a defect in materials, workmanship, accidental damage from
handling or normal wear and tear;
(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 multi-peril, or similar policy.
(7) "Portable Electronics Transaction" means:
(A) The sale or lease of portable electronics by a vendor to
a customer; or
(B) The sale of a service related to the use of portable
electronics by a vendor to a customer.
(8) "Supervising Entity" means a business entity that is a
licensed insurance producer or an insurer;
(9) "Vendor" means a person in the business of engaging in
portable electronics transactions directly or indirectly, whether
through an entity that is a corporate affiliate or an entity with
which it has a contractual relationship to market portable
(b) Exemption from licensing.
(1) A vendor that complies with the provisions of this section is deemed to be in compliance with the requirements of this article
regarding producer licensing not only for the vendor, but also for
any employee or authorized representative of the vendor selling or
offering coverage under a policy of portable electronics insurance
to a customer at each location at which the vendor engages in
portable electronics transactions.
(2) A vendor shall maintain, and share with its supervising
entity, a list of all locations in this state that offer portable
electronics insurance on its behalf. The supervising entity shall
submit the list to the Insurance Commissioner within thirty days
(c) Requirements for Sale of Portable Electronics Insurance.
(1) 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:
(A) 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;
(B) 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;
(C) Summarize the material terms of the insurance coverage,
(i) The identity of the insurer;
(ii) The identity of the supervising entity;
(iii) The amount of any applicable deductible and how it is to
(iv) Benefits of the coverage; and
(v)Key terms and conditions of coverage such as whether
portable electronics may be repaired or replaced with similar make
and model reconditioned or non-original manufacturer parts or
(D)Summarize 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 enrolled customer fails to comply with
any equipment return requirements; and
Proof of loss requirements.
(E)State that the enrolled customer may cancel enrollment
for coverage under a portable electronics insurance policy at any
time and the person paying the premium shall receive a refund of
any applicable unearned premium.
(2)Portable electronics insurance may be offered on a month
to month or other periodic basis as a group or master commercial
insurance policy issued to a vendor of portable electronics under
which individual customers may elect to enroll for coverage.
(3)Eligibility and underwriting standards for customers
electing to enroll in coverage shall be established for each
portable electronics insurance program.
Authority of Vendors of Portable Electronics.
(1)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 article provided that:
(A)The vendor complies with the provisions of this section;
(B)The insurer issuing the portable electronics insurance
appoints a supervising entity 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
(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 entity
shall implement a supplemental education program regarding portable
electronics insurance that is conducted and overseen by licensed
employees of the supervising entity; and
(iii) Each employee and authorized representative shall
receive basic instruction about the portable electronics insurance
offered to customers and the disclosures required under subsection
(C)No employee or authorized representative of a vendor of
portable electronics shall advertise, represent or otherwise hold
himself or herself out as a licensed insurance producer.
(D)No employee or authorized representative of a vendor of portable electronics is compensated based primarily on the number
of customers enrolled for portable electronics insurance coverage
but may receive compensation for enrolling customers for portable
electronics insurance coverage
so long as the compensation for
those activities is incidental to their overall compensation.
(2)The charges for portable electronics insurance coverage
may be billed and collected by the vendor of portable electronics.
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 shall be separately
itemized on the enrolled customer's bill. If the coverage is
included in the purchase or lease of portable electronics or
related services the vendor shall clearly and conspicuously
disclose to the enrolled customer that the portable electronics
insurance coverage is included with the portable electronics or
related services. No vendor shall require the purchase of any kind
of insurance specified in this section as a condition of 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
entity within sixty (60) days of receipt. All funds received by a
vendor from an enrolled customer for the sale of portable
electronics insurance shall be considered funds held in trust by
the vendor in a fiduciary capacity for the benefit of the insurer. Vendors may receive compensation for billing and collection
Suspension of Privileges.
(1)If a vendor of portable electronics or its employee or
authorized representative violates any provision of this section,
the Insurance Commissioner may do any of the following:
(A)After notice and hearing, impose fines not to exceed $500
per violation or $5,000 in the aggregate for such conduct.
(B)After notice and hearing, impose other penalties that the
commissioner deems necessary and reasonable to carry out the
purpose of this article, including:
(i)Suspending the privilege of transacting portable
electronics insurance pursuant to this section at specific business
locations where violations have occurred; and
(ii)Suspending or revoking the ability of individual
employees or authorized representatives to act under the section.
(f)Termination of Portable Electronics Insurance.
Notwithstanding any other provision of law:
(A)An insurer may terminate or otherwise change the terms
and conditions of a policy of portable electronics insurance only
upon providing the policyholder and enrolled customers with at
least thirty (30) days notice.
(B)If the insurer changes the terms and conditions, then the
insurer shall provide the vendor policyholder with a revised policy
of endorsement and each enrolled customer with a revised
certificate, endorsement, updated brochure, or other evidence indicating a change in the terms and conditions has occurred and a
summary of material changes.
(2)Notwithstanding subdivision (1) of this subsection, an
insurer may terminate an enrolled customer's enrollment under a
portable electronics insurance policy upon fifteen (15) days notice
for discovery of fraud or material misrepresentation in obtaining
coverage or in the presentation of a claim number.
(3)Notwithstanding subdivision (2) of this subsection, an
insurer may immediately terminate an enrolled customer's enrollment
under a portable electronics insurance policy:
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 (30) calendar days after exhaustion
of the limit. However, if notice is not timely sent, enrollment
shall continue notwithstanding the aggregate limit of liability
until the insurer sends notice of termination to the enrolled
(4)Where a portable electronics insurance policy is
terminated by a policyholder, the policyholder shall mail or
deliver written notice to each enrolled customer advising the
enrolled customer of the termination. The written notice shall be
mailed or delivered to the enrolled customer at least (30) days prior to the termination.
(5)Whenever notice is required pursuant to this section, it
shall be in writing and may be mailed or delivered to the vendor of
portable electronics at the vendor's mailing address and to its
affected enrolled customers' last known mailing addresses on file
with the insurer. If notice is mailed, the insurer or vendor of
portable electronics, as the case may be, shall maintain proof of
mailing in a form authorized or accepted by the United States
Postal Service or other commercial mail delivery service.
Alternatively, an insurer or vendor policyholder may comply with
any notice required by this section by providing electronic notice
to a vendor or its affected enrolled customers, as the case may be,
by electronic means. If notice is accomplished through electronic
means the insurer or vendor of portable electronics, as the case
may be, shall maintain proof that the notice was sent.
(g) If a supervising entity is determined by the Insurance
Commissioner to have not performed its required duties under this
section or has otherwise violated any provision of this section, it
shall be subject to the administrative actions set forth in section
twenty-four of this article.