AB 541

This bill establishes criteria for selling and offering portable electronics

insurance and sets other requirements regarding the sale of portable electronics

insurance. Under current law, a person may not solicit, negotiate, or place insurance

or advise others about insurance needs and coverage without a certificate of

authority or a license as an insurance intermediary, either as an agent or a broker.

The bill allows a vendor or an employee or authorized representative of a vendor of

portable electronics to sell or offer portable electronics insurance without a

certificate of authority or a license as an intermediary if: 1) the vendor complies with

the requirements created in the bill; 2) the insurer issuing the portable electronics

insurance supervises, or hires an entity to supervise, the administration of the sale

of portable electronics insurance; 3) any supervising entity that is appointed by an

insurer to supervise the administration of a portable electronics insurance program

maintains a registry of the vendor locations that are authorized to sell or offer

portable electronics insurance; and 4) the employee or authorized representative

intending to sell or offer portable electronics insurance completes a training program

as described in the bill.

A vendor of portable electronics is prohibited under the bill from compensating

an employee or authorized representative based primarily on the number of

customers enrolled in portable electronics insurance coverage, but the vendor may

compensate an employee or authorized representative, in a manner that is incidental

to his or her overall compensation, for activities related to the sale or offering of

portable electronics insurance. A vendor of portable electronics may bill and collect

the charges for portable electronics insurance coverage under the requirements set

in the bill. The insurer, or supervising entity hired by the insurer, may compensate

the vendor for its billing and collection services.

The bill requires the vendor to make available for customers a brochure or other

written material that discloses all of the following: 1) that portable electronics

insurance may duplicate coverage already provided by a customer's other insurance;

2) that a customer is not required to enroll in portable electronics insurance as a

condition of purchasing or leasing a portable electronics device; 3) a summary of the

material terms of the portable electronics coverage including the identity of the

insurer, the identity of any supervising entity, the amount of the deductible and how

to pay that deductible, the benefits of coverage, and the key terms and conditions of

coverage; 4) a summary of the process for filing a claim; and 5) that the enrolled

customer may cancel enrollment for coverage under a portable electronics insurance

policy at any time and that upon cancellation the person paying the premium

receives a refund of any applicable unearned premium.

Under the bill, the insurer is required to establish eligibility and underwriting

standards for customers electing to enroll in coverage for each portable electronics

insurance program. An insurer may terminate or otherwise change the terms and