Requires wireless communications equipment vendors offering insurance on such equipment to disclose whether they pay a commission to the equipment retailer

1 Co-sponsor

• Tony Avella

BILL NUMBER:S6463

Title of bill

An act to amend the insurance law, in relation to disclosures by limited licensees which are wireless communications equipment vendors

Purpose or general idea of bill

To clarify the disclosure requirements for wireless communications equipment insurance companies.

Summary of specific provisions

Section one of the bill amends section 2131 of the insurance law to explicitly require that when a commission is earned for the sale of wireless communications equipment insurance that the receipt of such commission be disclosed.

Section two further amends section 2131 of the insurance law by clarify- ing that the term "commission" means a payment to an insurance salesper- son that is based only on a consumer's decision to enroll in a wireless equipment insurance program. Section two further provides that such wireless communications equipment insurance program sales are to be regulated by the simple process established in this bill.

Existing law

The wireless communications vendor ("wireless vendor") is licensed as a "limited licensee" under Section 2131 of the Insurance Law. As required under § 2131(e) (2), when the wireless vendor offers the purchaser of wireless communications equipment the option of purchasing wireless communications equipment insurance, the wireless vendor makes available to the purchaser written materials summarizing the material teens of the insurance coverage, including the name of the insurer and the agent licensed under section 2103(b) of the Insurance Law. Additionally, such materials indicate that this product may be a duplication of coverage already provided by a renter's, homeowner's, automobile, or other liability insurance.

Justification

This bill maintains the set of disclosures required of limited licensees regarding disclosure necessary for the consumer to make an informed insurance purchasing decision, namely the terms, costs, and procedures of the insurance product. This bill will further benefit consumers who seek wireless communications equipment insurance by estab- lishing a salesperson commission disclosure requirement that ensures the speed and convenience of these common and simple transactions.

The information necessary to affect whether or not to purchase wireless equipment insurance is limited. The insurance transactions are not complicated by various offers from the equipment seller of competing insurance products. Consumers will be offered a simple and complete product, along with the insurance product's terms, costs, and procedures as required by § 2131, as well as a disclosure when a salesperson receives a commission for a sale.

Prior legislative history

New bill

Fiscal implications

None

Effective date

On the 30th day after becoming law.