Portable electronics insurance and providing a penalty

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 conditions of a portable electronics insurance policy only after providing the policyholder and all enrolled customers at least 30 days' notice before the termination or change except that an insurer may terminate enrollment of a customer after providing 15 days' notice when the enrolled customer committed fraud or made a material misrepresentation in obtaining coverage or presenting a claim and an insurer may terminate immediately the enrollment of a customer for nonpayment of the premium or if the customer ceases to have active service with the vendor. The bill allows an insurer to terminate the enrollment of a customer under a portable electronics insurance policy if the customer exhausts the aggregate limit of liability under the policy's terms and if the insurer sends notice of the termination within 30 days after exhaustion of the limit. If the insurer does not send the notice in a timely manner, the insurer must continue coverage, notwithstanding the aggregate limit of liability, until the insurer sends the notice. If the vendor of portable electronics terminates the insurance policy, the vendor shall provide written notice to each enrolled customer advising of the termination at least 30 days before the termination. The bill also sets requirements for providing notice or correspondence that is required under the provisions of the bill.