SECTIONS 1758.6-1758.693 - California Statutes

INSURANCE CODE

SECTION 1758.6-1758.693

1758.6. No communications equipment vendor shall offer or sell any
form of communications equipment insurance in this state unless that
person is licensed as an insurance agent or broker pursuant to
Article 3 (commencing with Section 1631) or has complied with the
requirements of this article and has been issued a license by the
commissioner as provided in this article.

1758.61. The commissioner may issue to an applicant that has
complied with the requirements of this article a communications
equipment insurance agent license that authorizes the licensee to
offer or sell insurance in connection with, and incidental to, the
sale of communications equipment or the sale or provision of service
for communications equipment by a retail vendor.

1758.62. (a) An applicant for a communications equipment insurance
agent license under this article shall submit all of the following to
the commissioner:
(1) A written application for licensure, signed by the applicant
or an officer of the applicant, in the form prescribed by the
commissioner.
(2) A certificate by the insurer that is to be named in the
communications equipment insurance license, stating that the insurer
has satisfied itself that the named applicant is trustworthy and
competent to act as its insurance agent limited to this purpose and
that the insurer will appoint the applicant to act as its agent to
transact the kind or kinds of insurance that are permitted by this
article, if the communications equipment insurance agent license
applied for is issued by the commissioner. The certification shall be
subscribed by an officer or managing agent of the insurer on a form
prescribed by the commissioner.
(3) An application fee, and for each license period thereafter, a
renewal fee, in an amount or amounts determined by the department as
sufficient to defray the department's actual cost of processing the
application or renewal and implementing this article. The limitation
on fee increases of 10 percent without prior approval of the
Legislature set forth in Section 12978 shall not apply to the
application or renewal fee set forth in this subdivision during the
years 2003, 2004, and 2005.
(b) Notwithstanding any other provision of law to the contrary,
the provisions set forth in Sections 1667, 1668, 1668.5, 1669, 1670,
1738, and 1739 apply to any application for or issuance of a license
pursuant to this article.
(c) Costs associated with any enforcement action or investigation
shall be paid for by the person or organization licensed pursuant to
this article.

1758.63. (a) An employee of a communications equipment vendor or
franchisee of a communications equipment vendor that has been issued
a communications equipment agent license pursuant to this article may
be an endorsee authorized to offer insurance products under the
authority of the communications equipment insurance agent license if
all of the following conditions have been met:
(1) The employee is 18 years of age or older.
(2) The communications equipment vendor, at the time it submits
its communications equipment agent's license application pursuant to
Section 1758.62, also establishes a list of the names of all
endorsees to its communications equipment agent license. The list
shall be maintained by the communications equipment vendor in a form
prescribed by, or format acceptable to, the commissioner, and shall
be updated annually. The list shall be retained by the communications
equipment vendor for three years and made available to the
commissioner for review and inspection.
(3) The communications equipment vendor submits to the
commissioner with its initial communications equipment agent license
application and annually thereafter a certification, subscribed by an
officer of the company on a form prescribed by the commissioner,
stating all of the following:
(A) The number of endorsees offering insurance products under the
authority of the communications equipment agent license for the
applicable period.
(B) A statement that no person other than an endorsee sells or
offers insurance on its behalf.
(C) That all endorsees offering insurance have completed training
as required by this article.
(b) Each communications equipment vendor licensed pursuant to this
article shall provide for the training of its endorsees under a
program developed by a licensed fire and casualty broker or agent
prior to allowing its endorsees to offer or sell insurance products.
The training shall meet the following minimum standards:
(1) Each communications equipment agent endorsee shall receive
instruction about the types of insurance specified in subdivision (d)
of Section 1758.69 that are offered for sale to prospective
customers.
(2) Each communications equipment agent endorsee shall receive
training about ethical sales practices.
(3) Each communications equipment agent endorsee shall receive
training about the disclosures to be given to prospective customers
pursuant to Section 1758.66.
(c) The training materials used by or on behalf of the
communications equipment vendor to train its endorsees shall be
submitted to the department by the licensed fire and casualty agent
or broker that develops the materials at the time the licensee
applies for its communications equipment insurance agent license. Any
changes to previously submitted training materials shall be
submitted to the department with the changes highlighted at least 30
days prior to their use by the licensee. Training materials and
changes to those materials submitted to the department pursuant to
this subdivision shall be deemed approved for use by the company
unless it is notified by the department to the contrary. Failure by
the communications equipment licensee to submit training materials or
changes for department review or use of unapproved or disapproved
training materials shall constitute grounds for denial of an
application for a license, nonrenewal of a license, or suspension of
a license, as appropriate.
(d) The retraining of endorsees shall be conducted whenever there
is a material change in the insurance products sold that requires
modification of the training materials, but in no event less
frequently than every two years for each endorsee.

1758.64. (a) The manager at each location of a communications
equipment vendor or a franchisee of a communications equipment vendor
licensed pursuant to this article, or the direct supervisor of the
vendor's endorsees at each location or region shall be an endorsee
and shall be responsible for the supervision of each additional
endorsee at that location or in that region. Each licensee shall
identify the endorsee who is the manager or supervisor at each
location or region for the purposes of this article.
(b) An endorsee may act on behalf of and under the supervision of
the communications equipment agent in matters relating to transacting
insurance under that agent's license. The conduct of an endorsee of
a communications equipment agent acting within the scope of
employment or agency shall be deemed the conduct of the
communications equipment agent for purposes of this article.

1758.65. (a) If a licensee or endorsee violates any provision of
this article or any other provision of this code, the commissioner
may do any of the following:
(1) After notice and hearing, suspend or revoke the license of the
communications equipment insurance agent.
(2) After notice and hearing, impose fines on the communications
equipment insurance agent for its conduct or that of its endorsees.
(3) After notice and hearing, impose other penalties that the
commissioner deems necessary and convenient to carry out the purpose
of this code, including suspending the privilege of transacting
communications equipment insurance pursuant to this article at
specific business locations where violations have occurred, imposing
fines on the communications equipment insurance agent, and suspending
or revoking the endorsement of individual endorsees or manager
endorsees.
(b) If any person sells insurance in connection with, or
incidental to, the sale of communications equipment or the sale or
provision of service for communications equipment, or holds himself
or herself or an organization out as a communications equipment
insurance agent without obtaining the license required by this
article, or as being an endorsee when that person is not an endorsee,
or as being licensed pursuant to Chapter 5 (commencing with Section
1631) without obtaining that license, the commissioner may issue a
cease and desist order pursuant to Section 12921.8.
(c) Notwithstanding any other provision of law to the contrary,
the provisions of Section 1748.5 are applicable to both the
organization issued a license pursuant to this article and any
endorsee to that license.

1758.66. A communications equipment insurance agent shall not sell
insurance pursuant to this article by unsolicited telephone calls or
otherwise unless, at the time of sale, or reasonably thereafter with
respect to a sale or enrollment occurring by telephone, all of the
following conditions are satisfied:
(a) The communications equipment insurance agent provides
brochures or other written materials to the prospective purchaser
that do all of the following:
(1) Summarize the material terms and conditions of coverage
offered, including the identity of the insurer.
(2) Describe the process for filing a claim, including a toll-free
telephone number to report a claim.
(3) Disclose any additional information on the price, benefits,
exclusions, conditions, or other limitations of those policies that
the commissioner may, by rule, prescribe.
(4) Provide the name, address, telephone number, and license
number of the licensee or the fire and casualty broker-agent
appointed by the insurer issuing communications equipment insurance
coverage to the licensee, as well as the department's toll-free
consumer hotline.
(b) The communications equipment insurance agent or its endorsees
makes all of the following disclosures, which shall be acknowledged
in writing by the purchaser, or displayed by clear and conspicuous
signs that are posted at every location where contracts are executed,
such as the counter where the purchaser signs the service agreement,
or provided in writing to the purchaser:
(1) That the purchase by the customer of the kinds of insurance
prescribed in this article is not required in order to purchase
communications equipment or service.
(2) That the insurance policies offered by the communications
equipment insurance agent may provide a duplication of coverage
already provided by other insurance policies covering the purchaser.
(3) That the endorsee of the communications equipment agent is not
qualified or authorized to evaluate the adequacy of the purchaser's
existing insurance coverages, unless that person is licensed pursuant
to Article 3 (commencing with Section 1631).
(4) That the customer may cancel the insurance at any time. If the
customer cancels any unearned premium will be refunded in accordance
with applicable law.
(c) The material terms and conditions of coverage are provided to
every person who elects to purchase that coverage.
(d) Costs for the insurance are separately itemized in any billing
statement for the insurance.
(e) The insurance is provided under an individual policy issued to
the purchaser, or under a group or master policy issued to an
organization licensed as a communications equipment insurance agent
by an insurer authorized to transact the applicable kinds or types of
insurance in this state.

1758.661. A licensee shall not be required to treat moneys
collected from consumers purchasing insurance pursuant to this
article as funds received in a fiduciary capacity if the insurer
represented by the licensee has provided in writing that the funds
need not be segregated from funds received by the communications
equipment vendor on account of the sale of communications equipment
and the charges for insurance coverage are itemized and incorporated
as part of the customer's bill.

1758.67. Under the authority of the communications equipment
insurance agent license, a communications equipment insurance agent
shall not do any of the following:
(a) Offer to sell insurance except in conjunction with, and
incidental to, the sale of communications equipment or the sale or
provision of service for communications equipment.
(b) Advertise, represent, or otherwise portray itself or its
employees or endorsees as licensed insurers or fire and casualty
broker-agents.
(c) Pay any endorsee any compensation, fee, or commission
dependent on the placement of insurance under the agent's license.
Nothing in this code shall prohibit the payment of a
performance-related incentive. For purposes of this subdivision, a
"performance-related incentive" is money or other tangible or
intangible items of value paid or given to any endorsee of the
licensee which is not based solely on the offering or selling of the
insurance products listed in subdivision (d) of Section 1758.69.

1758.68. Any insurer that provides insurance to be sold by an
organization licensed as a communications equipment insurance agent
shall file a copy of any individual policy issued to a purchaser, or
any policy or certificate issued under a group or master policy to an
organization licensed as a communications equipment insurance agent,
with the commissioner, who shall make that policy available to the
public.

1758.69. As used in this article, the following definitions have
the following meanings:
(a) "Enrollment" means the process of soliciting or accepting
enrollments or applications from a consumer under a communications
equipment insurance policy, which includes informing the consumer of
the availability of coverage, preparing and delivery of the
certificate of insurance or notice of proposed insurance, or
otherwise assisting the consumer in making an informed decision
whether or not to elect to purchase communications equipment
insurance.
(b) "Communications equipment" means handsets, pagers, personal
digital assistants, portable computers, cellular telephones,
batteries, and other devices or their accessories used to originate
or receive communications signals or service; however, the term does
not include telecommunications switching equipment, transmission
wires, cell site transceiver equipment, or other equipment and
systems used by telecommunications companies to provide
telecommunications service to consumers.
(c) "Communications equipment insurance agent license" means an
agent license issued to an individual or organization for the
enrollment and sale of communications equipment insurance.
(d) "Communications equipment insurance" means insurance issued to
cover the loss, theft, mechanical failure, or malfunction of or
damage to communications equipment.
(e) "Communications equipment vendor" means any person in the
business of selling, reselling, soliciting, or leasing communications
equipment or communications equipment service to customers.
(f) "Endorsee" means an unlicensed employee of a communications
equipment insurance agent who meets the requirements of this article.
(g) (1) "License period" means all of that two-year period
beginning as described in subparagraph (A) or (B) of paragraph (2),
as applicable, and ending the second succeeding year on the last
calendar day of the month in which the initial license was issued.
(2) A license period shall be determined for each person as
follows:
(A) Upon initial licensing, the license period shall start on the
date the license is issued.
(B) Subsequently, the license period shall start on the first day
following the month in which the initial license was issued.
(3) A license shall be renewed on or before the expiration date of
the license period.

1758.691. Nothing in this article regulating the sale of
communications equipment insurance shall be construed to impair or
impede the application of any other law regulating the sale of
communications equipment insurance.

1758.692. (a) Not less than 60 days before a permanent license will
expire, the commissioner may use an electronic delivery method,
including e-mail or other similar electronic method of delivery, to
deliver, or may mail, to the latest e-mail or mailing address
appearing on his or her records, an application to the licensee to
renew the license of a communications equipment insurance agent and
any endorsees for the appropriate succeeding license term. It is the
licensee's responsibility to renew, whether or not a renewal notice
is received.
(b) The commissioner may accept a late renewal without penalty,
provided that the licensee's failure to comply is due to a clerical
error or inadvertence.
(c) An application for renewal of a license may be filed on or
before the expiration date. An application for renewal of an expired
license may be filed after the expiration date and until that same
month and date of the next succeeding year.
(d) The commissioner shall impose a penalty fee equal to one-half
of the renewal fee for the communications equipment insurance agent
license and any endorsees for any renewal that is filed after the
expiration date of the license.

1758.693. (a) This article shall become operative only upon a
determination by the commissioner that the personnel positions needed
to carry out the provisions of this article are in existence or have
been authorized in the Budget Act of 2002 or a subsequent budget
act.
(b) On and after January 1, 2003, the commissioner may accept
applications from communications equipment vendors seeking licensure
pursuant to this article. However, the commissioner shall not act
upon the applications. If, prior to April 30, 2003, the commissioner
receives 50 applications or less, the commissioner shall be deemed to
have sufficient personnel to carry out the provisions of this
article and this article shall immediately become operative.