Authorizes limited licenses to self-storage companies for the sale of insurance on personal property stored at storage facilities.
BILL NUMBER: S7118
TITLE OF BILL : An act to amend the insurance law, in relation to authorizing the issuance of limited licenses to self-storage companies for the sale of insurance coverage on personal property stored in self-service storage spaces
PURPOSE : To permit self-service storage companies to obtain limited licenses to sell insurance coverage on personal property stored in a self-service storage space.
SUMMARY OF PROVISIONS : Section 1: Amends Insurance Law S.2131 to permit the superintendent of Insurance to issue limited licenses to self-service storage companies to act as agent for an authorized insurer in connection with the rental of self-service storage space with respect to personal effects insurance that provides coverage to renters of storage space at the same facility for the loss of or damage to, personal effects that occurs at the same facility during the rental period, and for any other coverage the superintendent may approve as meaningful and appropriate in connection with the rental of storage space.
Section 2: Adds a new section 3453 to the Insurance Law to clarify that self-service storage company insurance policies are not subject to the provisions of Section 3425 or 3426 of the Insurance Law.
Section 3: Effective date.
EXISTING LAW : Existing law allows the superintendent of Insurance to issue limited licenses only to rental vehicle companies and wireless equipment vendors for the sale of certain types of insurance in connection with the rental of motor vehicles and the sale or offering for sale of wireless communications equipment.
JUSTIFICATION : Self-service storage companies require that renters of storage space have insurance coverage to protect their stored personal property as a condition of renting storage space. While some consumers have a homeowner's or renter's policy that will provide coverage for their stored property, many others lack the required insurance coverage. If self-service storage companies are permitted to obtain a limited license to offer personal effects insurance to renters of storage space, consumers will have the opportunity to obtain the required coverage to protect their valuable property. Personal effects insurance would cover the loss of, or damage to a renters' stored personal property for events beyond the self-service storage company's control. A number of other states currently permit the issuance of limited insurance licenses to self-service storage companies authorizing them to offer personal effects insurance in connection with the rental of storage space.
Existing insurance law currently provides for the issuance of a limited license to rental vehicle companies and wireless communications equipment vendors. A limited license authorizes these entities to offer certain types of insurance only in connection with the rental of motor vehicles or the sale of wireless communications equipment.
This proposal would permit the superintendent to issue a limited license to a self-service storage company that would permit it to offer personal effects insurance only in connection with the rental of storage space at a storage facility. Just as rental vehicle companies and wireless communications equipment vendors are currently required to do when offering insurance, self-service storage companies would be required to provide brochures and other written materials to prospective renters that: summarize the insurance coverage; disclose that the policy may provide a duplication of coverage already provided by a renter's homeowner's insurance policy or other source of coverage; state that the purchase of insurance is not required to rent storage space; describe the process for filing a claim if insurance is purchased; contain the price, deductible, benefits, exclusions and conditions of the policy; and state that the customer may cancel the insurance at any time and any unearned premium will be refunded in accordance with applicable law. These brochures would have to filed with the superintendent of Insurance for review.
Self-service storage companies also would be required to conduct training programs for their employees and sale representatives offering insurance pursuant to the limited license that must meet the minimum standards that currently apply to training programs required by rental vehicle companies and wireless communications equipment vendors that offer insurance pursuant to a limited license. These training programs also must be approved by the superintendent.
LEGISLATIVE HISTORY : None.
FISCAL IMPLICATIONS : None.
LOCAL FISCAL IMPLICATIONS : None.
EFFECTIVE DATE : 180 days after it shall have become law.
STATE OF NEW YORK ________________________________________________________________________ 7118 IN SENATE March 15, 2010 ___________Introduced by Sen. BRESLIN -- 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 authorizing the issu- ance of limited licenses to self-storage companies for the sale of insurance coverage on personal property stored in self-service storage spaces THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. The section heading and subsections (a), (d), (e), (f), (h) and (i) of section 2131 of the insurance law, the section heading and subsections (a), (e), (f), (h) and (i) as amended by chapter 582 of the laws of 2003 and subsection (d) as amended by chapter 426 of the laws of 2005, are amended to read as follows: Limited license for rental vehicle companies
[and], wireless communi- cations equipment vendors AND SELF-SERVICE STORAGE COMPANIES. (a) The superintendent may issue to a rental vehicle company, a wireless commu- nications equipment vendor, A SELF-SERVICE STORAGE COMPANY or to a fran- chisee of a rental vehicle company [or], a wireless communications equipment vendor, OR A SELF-SERVICE STORAGE COMPANY which has complied with the requirements of this section, a limited license authorizing the licensee, known as a "limited licensee" for the purpose of this article, to act as agent, with reference to the kinds of insurance specified in this section, of any insurer authorized to write such kinds of insurance in this state. (d) The rental vehicle company, wireless communications equipment vendor, SELF-SERVICE STORAGE COMPANY or franchisee licensed pursuant to subsection (a) of this section may act as agent for an authorized insur- er only in connection with the rental of motor vehicles [or], the sale or offering for sale of wireless communications equipment OR THE RENTAL OF STORAGE SPACE and only with respect to the following kinds of insur- ance: (1) with respect to rental vehicle companies: (A) excess liability insurance that provides coverage to the rental car company or franchisee and renters and other authorized drivers ofEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD16354-01-0 S. 7118 2
rental vehicles, in excess of the standard liability limits provided by the rental vehicle company in its rental agreement, for liability aris- ing from the negligent operation of the rental vehicle; (B) accident and health insurance that provides coverage to renters and other vehicle occupants, in excess to the standard first party bene- fits provided pursuant to article fifty-one of this chapter, for acci- dental death and/or dismemberment and for medical expenses resulting from an accident that occurs during the rental period; (C) personal effects insurance that provides coverage to renters and other vehicle occupants for the loss of, or damage to, personal effects that occurs during the rental period; (D) any other coverage which the superintendent may approve as mean- ingful and appropriate in connection with the rental of motor vehicles; or (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 property and casualty policy under which certificates or other evidence of coverage are issued to individual consumers who enroll in the program, provided however, that said insurance shall not extend to wireless services or service contracts governed by article seventy-nine of this chapter
[.]; OR (3) WITH RESPECT TO SELF-SERVICE STORAGE COMPANIES: (A) PERSONAL EFFECTS INSURANCE THAT PROVIDES COVERAGE TO RENTERS OF STORAGE SPACES AT THE SAME FACILITY FOR THE LOSS OF, OR DAMAGE TO, PERSONAL EFFECTS THAT OCCURS AT THE SAME FACILITY DURING THE RENTAL PERIOD; (B) ANY OTHER COVERAGE WHICH THE SUPERINTENDENT MAY APPROVE AS MEAN- INGFUL AND APPROPRIATE IN CONNECTION WITH THE RENTAL OF STORAGE SPACE. (e) No insurance may be issued pursuant to this section unless: (1) with regard to the rental of vehicles only, the rental period of the rental agreement does not exceed thirty consecutive days; and (2) at every location where rental vehicle agreements [or], wireless communications equipment agreements OR SELF-SERVICE STORAGE AGREEMENTS are executed, brochures or other written materials are readily available to the prospective consumer which: (A) summarize, clearly and correctly, the material terms of insurance coverage, including the identity of the insurer and, with regard to wireless communications equipment insurance, the agent licensed under subsection (b) of section two thousand one hundred three of this arti- cle; (B) disclose that these policies may provide a duplication of coverage already provided by a renter's personal automobile insurance policy, homeowner's insurance policy, personal liability insurance policy, or other source of coverage; (C) state that the purchase by the consumer of the kinds of insurance specified in this section is not required in order to rent a vehicle [or], to purchase or lease wireless communications equipment OR TO RENT STORAGE SPACE; (D) describe the process for filing a claim in the event the consumer elects to purchase coverage; (E) the price, deductible, benefits, exclusions and conditions or other limitations of such policies; (F) disclose that the employee of the wireless communications equip- ment vendor AND THE SELF-SERVICE STORAGE COMPANY is not qualified orS. 7118 3
authorized to evaluate the adequacy of the purchaser's existing cover- ages, 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. (3) evidence of coverage is provided to every consumer who elects to purchase such coverage. (f) Rates and forms for wireless communications equipment insurance shall be subject to article twenty-three of this chapter. Any brochures used in connection with wireless communications equipment insurance AND SELF-SERVICE STORAGE COMPANY INSURANCE shall be filed with the super- intendent for review and shall include disclosure of the claims filing process, premium, deductible amounts and limits and shall be prominently displayed in the brochure with at least twelve-point type bold headings. Any such brochures shall also be subject to section three thousand one hundred two of this chapter, provided, however, that any policy, certif- icate or other evidence of wireless communications equipment insurance coverage OR SELF-SERVICE STORAGE COMPANY INSURANCE, whether or not contained in such brochure, shall not be subject to section three thou- sand one hundred two of this chapter, but shall be written in a clear and coherent manner and whenever practicable shall use words with common and everyday meaning to facilitate readability and to aid the policy- holder in understanding the coverage provided. (h) Each company or franchisee licensed pursuant to this section shall conduct a training program, which shall be submitted to the superinten- dent for approval prior to use, and which shall meet the following mini- mum standards: (1) each trainee shall receive basic instruction about the kinds of insurance specified in this section offered for purchase by prospective renters of rental vehicles
[or], purchasers or lessors of wireless communications equipment OR RENTERS OF STORAGE SPACE; (2) each trainee shall be instructed with respect to the disclosures required under subsection (e) of this section and to acknowledge to a prospective renter of a rental vehicle [or], purchaser or lessor of wireless communications equipment OR RENTER OF STORAGE SPACE that purchase of any such insurance specified in this section is not required in order for the consumer to rent a motor vehicle [or], purchase or lease wireless communications equipment OR RENT STORAGE SPACE; (3) each trainee shall be instructed to acknowledge to a prospective consumer of the kinds of insurance specified in this section that the consumer may have insurance policies that already provide the coverage being offered by the rental vehicle company [or], the wireless communi- cations equipment vendor OR SELF-SERVICE STORAGE COMPANY pursuant to this section; and (4) with regard to wireless communications equipment insurance [only]AND SELF-SERVICE STORAGE COMPANY INSURANCE, training materials may be developed and provided by an agent licensed pursuant to subsection (b) of section two thousand one hundred three of this article. (i) Limited licensees acting pursuant to and under the authority of this section shall comply with all applicable provisions of this arti- cle, except that notwithstanding section two thousand one hundred twenty of this article, a limited licensee pursuant to this section shall not be required to treat premiums collected from consumers purchasing such insurance when renting motor vehicles [or], purchasing or leasing wire- less communications equipment OR RENTING STORAGE SPACE as funds received in a fiduciary capacity, provided that:S. 7118 4
(1) the insurer represented by the limited licensee has consented in writing, signed by the insurer's officer, that premiums need not be segregated from funds received by the rental vehicle company
[or], wire- less communications equipment vendor OR SELF-SERVICE STORAGE COMPANY on account of vehicle rental [or], wireless communications equipment purchase or lease OR STORAGE SPACE RENTAL; and (2) the charges for insurance coverage are itemized but not billed to the consumer separately from the charges for rental vehicles [or], purchase or lease of wireless communications equipment OR RENTING STOR- AGE SPACE. S 2. The insurance law is amended by adding a new section 3453 to read as follows: S 3453. SELF-SERVICE STORAGE COMPANY INSURANCE POLICES. (A) AS USED IN THIS SECTION THE TERM "POLICY OF SELF-SERVICE STORAGE COMPANY INSURANCE" MEANS AN INSURANCE POLICY COVERING THE KIND OF INSURANCE DESCRIBED IN PARAGRAPH THREE OF SUBSECTION (D) OF SECTION TWO THOUSAND ONE HUNDRED THIRTY-ONE OF THIS CHAPTER. (B)(1) A GROUP POLICY, AND CERTIFICATES ISSUED THEREUNDER, OF SELF-SERVICE STORAGE COMPANY INSURANCE SHALL NOT BE SUBJECT TO THE PROVISIONS OF SECTION THREE THOUSAND FOUR HUNDRED TWENTY-FIVE OR THREE THOUSAND FOUR HUNDRED TWENTY-SIX OF THIS ARTICLE. (2) AN INSURER SHALL NOT TERMINATE OR OTHERWISE CHANGE THE TERMS AND CONDITIONS OF A POLICY OF SELF-SERVICE STORAGE COMPANY INSURANCE, EXCEPT IN ACCORDANCE WITH THE TERMS STATED IN THE POLICY. S 3. This act shall take effect on the one hundred eightieth day after it shall have become a law.