2011 - 2012 LEGISLATURE
February 6, 2012 - Introduced by Senators Lasee and
Schultz, cosponsored by
Representatives Nygren, Brooks and Molepske Jr. Referred to Committee on
Insurance and Housing.
1An Act to create
628.02 (1) (b) 9. and 632.975 of the statutes; relating to:
2portable electronics insurance and providing a penalty.
Analysis by the Legislative Reference Bureau
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
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.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB429, s. 1
628.02 (1) (b) 9. of the statutes is created to read:
(b) 9. A vendor, as defined in s. 632.975 (1) (i), or an employee or 2
authorized representative of a vendor selling or offering portable electronics 3
insurance under s. 632.975.
SB429, s. 2
632.975 of the statutes is created to read:
5632.975 Portable electronics insurance. (1) Definitions.
In this section:
(a) "Customer" means a person who purchases a portable electronic device.
(b) "Enrolled customer" means a customer who elects coverage under a portable 8
electronics insurance policy issued to a vendor of portable electronics.
(c) "Location" means any physical location in the state or any Internet site, call 10
center site, or similar location directed to residents of the state.
(d) "Portable electronics" or "portable electronic devices" means electronic 12
devices that are portable in nature, including accessories and services related to the 13
use of the device.
(e) 1. "Portable electronics insurance" means insurance providing coverage for 15
the repair or replacement of portable electronics that may provide coverage for a 16
portable electronic device against any of the following causes of loss:
c. Inoperability due to mechanical failure.
f. Other similar causes of loss.
2. "Portable electronics insurance" does not include any of the following:
a. A service contract or extended warranty providing coverage limited to the 25
repair, replacement, or maintenance of property for the operational or structural
failure of property due to a defect in materials, workmanship, accidental damage 2
from handling, power surges, or normal wear and tear.
b. A policy of insurance covering a vendor's or a manufacturer's obligations 4
under a warranty.
c. A homeowner's, renter's, private passenger automobile, commercial 6
multi-peril, or similar insurance policy.
(f) "Portable electronics insurance program" means the coverage options made 8
available to customers of a vendor who elect to enroll for coverage of a portable 9
electronic device under a policy of portable electronics insurance.
(g) "Portable electronics transaction" means the sale or lease of a portable 11
electronic device to a customer.
(h) "Supervising entity" means a business entity that is a licensed insurer or 13
licensed intermediary that is appointed by an insurer to supervise the 14
administration of a portable electronics insurance program offered by a vendor to its 15
(i) "Vendor" means a person in the business of engaging in portable electronics 17
transactions directly or indirectly.
A vendor or an employee or authorized 19
representative of a vendor may sell or offer portable electronics insurance to 20
customers without holding a certificate of authority under s. 601.04 or a license as 21
an intermediary only if all of the following apply:
1. The vendor complies with the requirements of this section.
2. The insurer issuing the portable electronics insurance either directly 24
supervises, or appoints a supervising entity to supervise, the administration of the 25
sale of portable electronics insurance, including development of a training program,
as described under sub. (4), for employees and authorized representatives of the 2
3. The supervising entity, if any, maintains a registry of vendor locations at 4
which an employee or authorized representative is authorized to sell or offer portable 5
electronics insurance in this state. Upon request by the commissioner after 6
providing 10 days' notice to the supervising entity, the supervising entity shall make 7
available the registry for inspection and examination by the commissioner.
4. Any employee or authorized representative who intends to sell or offer 9
portable electronics insurance to customers shall complete a training program under 10
(b) Prohibited representations.
No employee or authorized representative of a 12
vendor of portable electronics may advertise, represent, or otherwise hold himself or 13
herself out as a licensed insurance intermediary, if the employee or authorized 14
representative does not hold a license as an intermediary in this state.
Compliance by a vendor with this section shall authorize any 16
employee or authorized representative of a vendor to sell or offer coverage under a 17
policy of portable electronics insurance to a customer at each location at which the 18
vendor engages in portable electronics transactions.
If a vendor of portable electronics or an employee or authorized 20
representative of a vendor violates any provision of this section, the commissioner 21
may do any of the following:
(a) After notice and hearing, impose forfeitures not to exceed $500 per violation 23
or $5,000 in the aggregate for violations.
(b) Order, under s. 601.41 (4), any of the following: