Banking Commerce and Insurance

Portable electronics insurance bill advances

Senators gave first-round approval April 18 to a bill that would require vendors of cell phones and other portable electronic devices to obtain a license to offer insurance on those products.

LB535, introduced by Hastings Sen. Dennis Utter, would establish a limited lines insurance license to sell portable electronics insurance or provide similar coverage. Portable electronics insurance would be defined as insurance covering repair or replacement of portable electronics due to theft, misplacement, damage, mechanical faults or similar damage.

Utter said the bill would create a licensing framework under which vendors could offer this specialized insurance.

“This model is consistent with a national trend that we have seen with respect to regulation of this product,” he said.

A Banking, Commerce and Insurance Committee amendment, adopted 40-0, became the bill and would establish the Portable Electronics Insurance Act.

Under the bill as amended, vendors interested in selling portable electronics insurance would apply to the state Department of Insurance for a one-year license, which would have an initial fee of no more than $100. The license would allow an employee or authorized representative of the vendor to offer insurance policies at each location at which the vendor sells portable electronics.

The bill also would require vendors to disclose information to consumers covering topics such as deductable amounts, how to file a claim and how to return a device.

Violators of the bill’s provisions could be subject to administrative fines of up to $1,000 per violation. The bill would have an operative date of Jan. 1, 2012.

Following adoption of a technical amendment offered by Imperial Sen. Mark Christensen, senators voted 36-0 to advance LB535 to select file.

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