South Carolina Legislature MobileReference is to the bill as introduced.
Amend the bill, as and if amended, by deleting all after the enacting words and inserting:
/ SECTION 1. Title 38 of the 1976 Code is amended by adding:
Section 38-97-10. This chapter may be cited as the 'Portable Electronics Insurance Act'.
Section 38-97-20. For
the purposes of this section:
(1) 'Customer' means a
person who purchases portable electronics or related
services.
(2) 'Enrolled customer'
means a customer who elects coverage under a portable
electronics insurance policy issued to a vendor of portable
electronics.
(3) 'Location' means
any physical location in this State or any website, call center
site, or similar location directed to residents of this
State.
(4) 'Portable
electronics' means electronic devices that are portable in
nature, their accessories, and services related to the use of
the device.
(5) 'Portable
electronics insurance' means insurance covering the repair or
replacement of portable electronics. This insurance may provide
coverage for portable electronics against loss, theft, and
inoperability due to mechanical failure, malfunction, damage,
and other similar loss. Portable electronics insurance does not
include:
(a)
a service contract governed by Section 38-78-20(12);
(b)
an insurance policy covering the obligation of a seller or
manufacturer under a warranty; and
(c)
a homeowners, renters, private passenger automobile,
commercial multiperil, or similar policies.
(6) 'Portable
electronics transaction' means:
(a)
the sale or lease of portable electronics by a vendor to a
customer; and
(b)
the sale of a service related to the use of portable
electronics by a vendor to a customer.
(7) 'Supervising
entity' means a business entity licensed as a property and
casualty insurer or insurance producer with a property and
casualty line of authority.
(8) 'Vendor' means a
person directly or indirectly engaged in the business of
portable electronics transactions.
Section 38-97-30. (A)
A vendor must hold a limited lines license
to sell or offer coverage under a policy of portable electronics
insurance.
(B) A limited lines
license issued under this section must authorize any employee or
authorized representative of the vendor to sell or offer
coverage under a policy of portable electronics insurance to a
customer at each location at which the vendor engages in
portable electronics transactions. An employee or authorized
representative of a vendor must have completed the training
required by Section 38-97-50 to sell or offer coverage under a
policy of portable electronics insurance to a customer.
(C) The supervising
entity shall maintain a registry of vendor locations which are
authorized to sell or solicit portable electronics insurance
coverage in this State. Upon request by the director or his
designee and with ten days' notice to the supervising entity,
the registry must be open to inspection and examination by the
director or his designee during regular business hours of the
supervising entity.
(D) Notwithstanding
another provision of law, a license issued pursuant to this
section authorizes the licensee and its employees or authorized
representatives to engage in those activities that are permitted
in this section.
Section 38-97-40. (A)
A vendor of portable electronics insurance
must make certain brochures or other written materials available
to its customers in a location where the vendor sells this
insurance. The brochures or written materials must:
(1)
disclose that portable electronics insurance may provide a
duplication of coverage already provided by a homeowner's
policy, renter's insurance policy, or other source of insurance
coverage of the customer;
(2)
state that the enrollment in a portable electronics
insurance program is not required for the customer to purchase
or lease portable electronics or services from the vendor;
and
(3)
summarize the material terms of the insurance coverage,
including:
(a)
the identity of the insurer;
(b)
the identity of the supervising entity;
(c)
the amount of any applicable deductible and how this
deductible must be paid;
(d)
benefits of the coverage;
(e)
key terms and conditions of coverage such as whether
portable electronics may be repaired or replaced with similar
make and model, reconditioned or nonoriginal manufacturer parts
or equipment;
(f)
a summary of the process for filing a claim under the
policy, including a description of how to return portable
electronics and the maximum fee applicable if an enrolled
customer fails to comply with an equipment return requirement;
and
(g)
a statement that an enrolled customer may cancel
enrollment for coverage under a portable electronics insurance
policy at any time and the person who pays the premium must
receive a refund of any applicable unearned premium.
(B) Portable
electronics insurance may be offered on a month-to-month or
other periodic basis as a group or master commercial inland
marine policy issued to a vendor of portable electronics for its
enrolled customers.
(C) Eligibility and
underwriting standards for customers electing to enroll in
coverage must be established for each portable electronics
insurance program.
Section 38-97-50. (A)
The employees and authorized representatives
of a vendor may sell or offer portable electronics insurance to
customers and may not be subject to licensure as an insurance
producer under this title if:
(1)
the vendor obtains a limited lines license to authorize
its employees or authorized representatives to sell or offer
portable electronics insurance pursuant to this section;
(2)
the employee or authorized representative of a vendor of
public electronics does not advertise, represent, or otherwise
hold himself out as a non-limited lines licensed insurance
producer; and (3)
the insurer issuing the portable electronics
insurance either directly supervises or appoints a supervising
entity to supervise the administration of the program, including
development of a training program for employees and authorized
representatives of the vendor. An outline of the training
materials required by this section must be maintained by the
supervising entity and provided to the department upon request.
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 the
portable electronics insurance product that is conducted and
overseen by licensed employees of the supervising entity.
Training required by this item must:
(a)
be delivered to employees and authorized representatives
of a vendor who are directly engaged in the activity of selling
or offering portable electronics insurance; and
(b)
include basic instruction to each employee and authorized
representative about the portable electronics insurance offered
and the disclosures required under Section 38-97-40.
(B) The charges for
portable electronics insurance coverage may be billed and
collected by a vendor of portable electronics. A 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. If the portable electronics insurance coverage
is included with 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 purchase of the portable
electronics or related services. A vendor billing and collecting
these charges must not be required to maintain such funds in a
segregated account if the vendor is authorized by the insurer to
hold these funds in an alternative manner and remits these
amounts to the supervising entity within sixty days following
receipt of these amounts. Funds received by a vendor from an
enrolled customer for the sale of portable electronics must be
considered funds held in trust by the vendor in a fiduciary
capacity for the benefit of the insurer. A vendor may receive
compensation for billing and collection services provided by it.
Section 38-97-60. A
vendor of portable electronics, its employee, or its authorized
representative who violates a provision of this chapter may,
after proper notice and an opportunity for a hearing, be subject
by the department to:
(1)
administrative penalties as provided in Section 38-2-10.
However, administrative penalties must not exceed thirty
thousand dollars in the aggregate for violations of a similar
nature; and
(2)
other penalties the department considers necessary and
reasonable to effectuate the purposes of this chapter,
including:
(a)
suspending the privilege of transacting portable
electronics insurance pursuant to this chapter at specific
locations where a violation has occurred;
(b)
suspending or revoking the ability of an individual
employee or authorized representative to act under the license;
and
(c)
suspending or revoking the license of the vendor.
Section 38-97-70. (A)
Notwithstanding another provision of law, an
insurer may terminate coverage or otherwise change the terms and
conditions of a policy of portable electronics insurance only as
provided in the policy between the insurer and the policyholder
and enrolled customers and only upon providing the policyholder
and enrolled customers with at least thirty days notice.
(B) If an insurer
changes these terms and conditions, the insurer shall
provide:
(1)
the vendor with a revised policy or endorsement; and
(2)
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 made.
(C) Notwithstanding
subsection (A), an insurer may:
(1)
terminate a 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 under the coverage;
and
(2)
immediately terminate a 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 individual 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 days after
the exhaustion of this limit. If this notice is not timely sent,
enrollment must continue regardless of the aggregate limit of
liability until the insurer sends notice of termination to the
enrolled customer.
(D) When 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 of the policy and the effective date of termination.
This written notice must be mailed or delivered to the enrolled
customer at least thirty days before termination.
(E) Whenever notice or
correspondence with respect to a policy of portable electronics
insurance is required pursuant to this section or is otherwise
required by law it shall be in writing. Notwithstanding another
provision of law, notices and correspondence may be sent either
by mail or by electronic means as set forth in this section. If
the notice or correspondence is mailed, it shall be sent to the
vendor of portable electronics at the vendor's mailing address
specified for such 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, shall maintain proof of mailing in a form
authorized or accepted by the United States Postal Service or
other commercial mail delivery service. If the notice or
correspondence is sent by electronic means, it shall be sent to
the vendor of portable electronics at the vendor's electronic
mail address specified for such 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
subparagraph, an enrolled customer's provision of an electronic
mail address to the insurer or vendor of portable electronics,
as the case may be, shall be deemed consent to receive notices
and correspondence by electronic means. The insurer or vendor of
portable electronics, as the case may be, shall maintain proof
that the notice or correspondence was sent.
(F) Notice or correspondence required by
this section or otherwise required by law may be sent on behalf
of an insurer or vendor, as the case may be, by the supervising
entity appointed by the insurer.
Section 38-97-80. (A)
A sworn application for a license under this
chapter must be made to and filed with the department on forms
prescribed by the department.
(B) An application
required under subsection (A) must provide the:
(1)
location of the home office of the applicant; and
(2)
name, residential address, and other information required
by the department for:
(a)
an employee or officer of the vendor who is designated by
the applicant as the person responsible for the compliance of
the vendor with the requirements of this chapter; and
(b)
all of its officers, directors, and shareholders of record
having a beneficial ownership of ten percent or more of any
class of securities registered under federal securities law, but
only if the vendor derives more than fifty percent of its
revenue from the sale of portable electronics insurance.
(3)
Any changes to information provided to the department
under this section, must be provided to the department within
thirty days after that change is made.
(C) Any vendor engaging
in portable electronics insurance transactions on or before the
effective date this chapter must apply for licensure within
ninety days after the application is made available by the
department. An applicant commencing operations after the
effective date of this chapter must obtain a license prior to
offering portable electronics insurance.
(D) An initial license
issued pursuant to this chapter is valid for twenty-four months
following the date it is issued.
(E)(1) A vendor of
portable electronics insurance licensed under this chapter shall
pay to the department a fee of one thousand
dollars for an initial portable electronic limited lines license
and five hundred dollars for a renewal.
(2)
The department shall retain any fee or surcharge imposed
by this section to use for the administration of Title 38."
SECTION 2. The provisions of this act take effect July 1, 2012. /
Renumber sections to conform.
Amend title to conform.