senate Bill S7706

2013-2014 Legislative Session

Expands the application of provisions regulating insurance on wireless communications equipment

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Archive: Last Bill Status - Vetoed by Governor


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Vetoed by Governor

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Dec 29, 2014 vetoed memo.586
Dec 17, 2014 delivered to governor
Jun 19, 2014 returned to senate
passed assembly
ordered to third reading rules cal.511
substituted for a10062
Jun 18, 2014 referred to insurance
delivered to assembly
passed senate
ordered to third reading cal.1501
committee discharged and committed to rules
Jun 02, 2014 referred to insurance

Votes

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S7706 - Bill Details

See Assembly Version of this Bill:
A10062
Law Section:
Insurance Law
Laws Affected:
Amd §§2131 & 3449, Ins L

S7706 - Bill Texts

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Expands the application of provisions regulating insurance on wireless communications equipment.

view sponsor memo
BILL NUMBER:S7706

TITLE OF BILL: An act to amend the insurance law, in relation to
insurance on wireless communications equipment

PURPOSE OR GENERAL IDEA OF BILL: To require additional wireless
communications equipment insurance policy disclosures under section
2131 of the Insurance Law, to ensure that wireless communications
equipment coverage products are subject to the consumer protections
and financial security provided for in this Chapter and inherent in an
insurance construct, to update the definition of wireless
communications equipment to reflect significant evolution of the
portable electronics market, and to make a technical amendment.

SUMMARY OF SPECIFIC PROVISIONS: Section one amends section 2131 of the
insurance law to better ensure that consumers receive all relevant
wireless communications equipment insurance policy information,
specifically by adding a new premium and compensation disclosure
requirement to the section 2131 set of disclosures designed
specifically for such policies.

Section two amends section 2131 of the insurance law to expand the
definition of wireless communications equipment insurance policies to
cover all entities offering coverage essentially identical to the
products that are currently covered by section 2131.

Section three amends Insurance Law § 2131(1) to update the definition
of wireless communications equipment to more broadly encompass
constructs designed to circumvent the consumer protections provided in
this chapter.

Section four makes a technical amendment to Insurance Law section 3449
to ensure proper cross referencing to Insurance Law section 2131.

EXISTING LAW: Insurance Law section 2131 requires numerous written
and material disclosures by producers of limited licensed wireless
communications equipment insurance coverage products. The section 2131
disclosures were carefully constructed to establish the sales of these
products as arms length transactions and eliminate the possibility of
improper steering by producer agents.

The section 2131 disclosures are numerous. They include the name of a
producer and any agents, a disclosure that a product may be a
duplication of a renter's, homeowner's, automobile or other liability
insurance policy, as well as a clear delineation of covered losses,
billing processes, and cancellation and refund rights.

The section 2131 disclosures also specifically ensure that consumers
do not rely on limited lines sales agents for guidance on coverage as
they might on sales agents of traditional insurance products, such as
life, home, automobile and disability coverage. Specifically, section
2131 requires that consumers be notified that producer employees "are
not qualified or authorized to evaluate the adequacy of the
purchaser's existing coverages, unless otherwise licensed."

JUSTIFICATION: This bill will address the emerging problem of certain
businesses circumventing important consumer protection through various


schemes that seek to exploit technicalities in the Insurance Law. In
some states, businesses structured in an attempt to operate outside
the scope of the insurance laws are reneging on their commitments to
pay valid consumer claims or refunding unnecessary premium payments.
This bill will clarify that those products that function essentially
as wireless communications equipment insurance policies should be
subject to the same disclosure requirements and be provided only by
solvent authorized insurance companies.

This bill is also necessary to improve the disclosure of relevant
information to consumers of limited lines wireless communications
equipment insurance policies by specifying how the information should
be provided and by providing more information, specifically with
regard to producer compensation, that is relevant, understandable and
properly emphasized in the context of what were originally designed to
be simple, common, arms length transactions.

The bill is also necessary to update the definition of wireless
communications equipment to ensure that consumers have access to
insurance coverage for devices, such as laptops and tablets, that
access communications services like wireless internet connections and
not just cellular systems.

The bill is also necessary to make a technical amendment to provide
for proper cross referencing by a certain provision of section 3449 of
the Insurance Law to section 2131 of the same chapter.

PRIOR LEGISLATIVE HISTORY: This is a new bill.

FISCAL IMPLICATIONS: None

EFFECTIVE DATE: Immediately.

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                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  7706

                            I N  S E N A T E

                              June 2, 2014
                               ___________

Introduced  by  Sen.  LIBOUS -- read twice and ordered printed, and when
  printed to be committed to the Committee on Insurance

AN ACT to amend the insurance law, in relation to insurance on  wireless
  communications equipment

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Paragraph 2 of subsection (d) of section 2131 of the insur-
ance law, as amended by chapter 368 of the laws of 2010, is  amended  to
read as follows:
  (2)  with respect to wireless communications equipment vendors, insur-
ance issued to cover the loss, theft, mechanical failure, or malfunction
of, or damage to, wireless communications equipment offered as either an
individual policy issued to the consumer or  as  a  group  policy  under
which  certificates or other evidence of coverage are issued to individ-
ual consumers who enroll in the program, OR ANY ARRANGEMENT  THAT  SEEKS
TO  PROVIDE SUBSTANTIALLY SIMILAR BENEFITS THROUGH OTHER MEANS INCLUDING
ARRANGEMENTS THAT CONFER BENEFITS UPON CONSUMERS THAT PURCHASE,  INCLUD-
ING  INSTALLMENT SALE PURCHASES, OR LEASE WIRELESS COMMUNICATIONS EQUIP-
MENT OR WIRELESS  SERVICES,  REGARDLESS  OF  WHETHER  THE  BENEFITS  ARE
PROVIDED  DIRECTLY  OR  INDIRECTLY  TO  THE CONSUMER, WHERE THE BENEFITS
INCLUDE THE REPAIR OR REPLACEMENT OF THE COVERED DEVICE,  THE  PROVISION
OF  A  LOANER OR RENTAL DEVICE, OR THE PAYMENT OF INDEMNIFICATION IN THE
EVENT OF A LOSS OF A COVERED DEVICE, AND WHERE THE BENEFITS ARE EXPRESS-
LY OR IMPLIEDLY CONDITIONED ON THE HAPPENING OF  SOME  FORTUITOUS  EVENT
SUCH  AS THE LOSS, THEFT OR PHYSICAL DAMAGE OF THE COVERED DEVICE, OR IS
STRUCTURED AS A REMEDY IN THE EVENT OF  SUCH  PERILS  WITHOUT  EXPRESSLY
STATING  THOSE PERILS AS A CONDITION OF COVERAGE, provided however, that
said  insurance  shall  not  extend  to  wireless  services  or  service
contracts governed by article seventy-nine of this chapter; or
  S  2.  Subparagraphs  (F)  and (G) of paragraph 2 of subsection (e) of
section 2131 of the insurance law, as amended by chapter 368 of the laws
of 2010, are amended and a new subparagraph (H)  is  added  to  read  as
follows:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD15460-01-4

S. 7706                             2

  (F) disclose that the employee of the rental vehicle company, wireless
communications equipment vendor or self-storage company is not qualified
or  authorized  to  evaluate  the  adequacy  of the purchaser's existing
coverages, unless otherwise licensed; [and]
  (G)  state  that the customer may cancel the insurance at any time and
any unearned premium will be  refunded  in  accordance  with  applicable
law[.]; AND
  (H)  WITH  REGARD  TO  WIRELESS  COMMUNICATIONS  EQUIPMENT  INSURANCE,
INCLUDE A DISCLOSURE THAT  IS  DEEMED  SUFFICIENT  TO  COMPLY  WITH  ANY
REQUIREMENT  TO DISCLOSE PRICE AND PRODUCER COMPENSATION WITH RESPECT TO
THIS TYPE OF INSURANCE AND THAT SHALL  READ  SUBSTANTIALLY  AS  FOLLOWS:
"YOU  WILL  BE  BILLED  A  CHARGE  OF  (AMOUNT OF PREMIUM) FOR A TERM OF
(NUMBER OF MONTHS) MONTHS. FOR CUSTOMERS WHO ELECT  INSURANCE  COVERAGE,
THE  MONTHLY  INSURANCE  PREMIUM  MAY  INCLUDE  FEES PAYABLE TO (NAME OF
ADMINISTRATOR) AND/OR (NAME OF VENDOR)."
  S 3. Subsection (1) of section 2131 of the insurance law, as added  by
chapter 582 of the laws of 2003, is amended to read as follows:
  (l)  For  purposes of this section "wireless communications equipment"
shall mean wireless handsets, pagers, personal digital assistants, wire-
less telephones [or], wireless telephone batteries,  PORTABLE  COMPUTERS
AND TABLETS, and other SIMILAR PORTABLE wireless devices and accessories
related  to such devices that are used to access wireless communications
services and includes wireless services.
  S 4. Subsection (a) of section 3449 of the insurance law, as added  by
chapter 426 of the laws of 2005, is amended to read as follows:
  (a)  In  this  section,  the  term  "policy of wireless communications
equipment insurance" means an insurance  policy  covering  the  kind  of
insurance  described in PARAGRAPH TWO OF subsection [(1)] (D) of section
two thousand one hundred thirty-one of this chapter.
  S 5. This act shall take effect immediately.

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