SB577 (2020) Detail

Relative to self-service storage insurance.


SB 577-FN - AS AMENDED BY THE SENATE

 

03/05/2020   0781s

2020 SESSION

20-2796

01/10

 

SENATE BILL 577-FN

 

AN ACT relative to self-service storage insurance.

 

SPONSORS: Sen. Watters, Dist 4; Sen. Cavanaugh, Dist 16; Rep. Van Houten, Hills. 45

 

COMMITTEE: Commerce

 

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ANALYSIS

 

This bill establishes procedures for self-storage insurance.

 

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

03/05/2020   0781s 20-2796

01/10

 

STATE OF NEW HAMPSHIRE

 

In the Year of Our Lord Two Thousand Twenty

 

AN ACT relative to self-service storage insurance.

 

Be it Enacted by the Senate and House of Representatives in General Court convened:

 

1  New Chapter; Self-Service Storage Insurance.  Amend RSA by inserting after chapter 402-N the following new chapter:

CHAPTER 402-O

SELF-SERVICE STORAGE INSURANCE

402-O:1  Definitions.  In this chapter:

I.  "Commissioner" means the insurance commissioner.

II.  "Location" means any physical location in the state of New Hampshire or any Internet website, call center site, or similar location directed to residents of the state of New Hampshire.

III.  "Owner" means a business entity that is the owner, lessor, or sublessor of a self-service storage facility, the owner's agent, or any other person authorized by the owner to manage the facility, or to receive rent from a renter.  The owner may be a resident or non-resident of this state.

IV.  "Personal property" means movable property not affixed to land.

V.  "Rental agreement" means any written agreement that establishes or modifies the terms, conditions, or rules concerning the use and occupancy of a rented space at a self-service storage facility.

VI.  "Renter" means a person, or any agent or representative of the person, entitled to the use of rented space at a self-service storage facility under a rental agreement to the exclusion of others.

VII.  "Self-service storage facility" means any real property designed and used for the purpose of renting or leasing individual storage space in which the renters themselves customarily store and remove their own personal property on a self-service basis.  A self-service storage facility is not a warehouse as the term "warehouse" is used in RSA 382-A:7-102.

VIII.  "Self-service storage insurance" means personal property insurance offered in connection with and incidental to the rental of a rented space at a self-service storage facility and which provides coverage to renters for the loss of or damage to personal property occurring at the facility or when the property is in transit to or from the facility during the period of the rental agreement.

IX.  "Supervising entity" means a business entity that is a licensed insurer or insurance producer that is appointed or authorized by an insurer to supervise the administration of a self-service storage insurance program.

402-O:2  Licensure of Owners.

I.  An owner shall hold a limited lines license to sell or offer coverage for self-service storage insurance at any location in this state.  An owner is not required to hold a license solely to display and make available to renters and prospective renters brochures and other promotional materials created by or on behalf of an authorized insurer or surplus lines insurer.

II.  A limited lines license issued under this chapter shall authorize the owner and the employees and authorized representatives of the owner to sell and offer coverage for self-service storage insurance to renters at each location at which the owner conducts business.

III.  The supervising entity shall maintain a registry of each location at which the owner sells or offers self-service storage insurance in this state.  Upon request by the commissioner and within 10 working days notice to the supervising entity, the registry shall be open to inspection and examination by the commissioner during regular business hours of the supervising entity.

IV.  Notwithstanding any other provision of law, a license issued pursuant to this chapter shall authorize the licensee and its employees and authorized representatives to engage in those activities that are permitted in this chapter.

V.  Owners, and their employees and authorized representatives, are exempt from all examination and education requirements.

402-O:3  Marketing Requirements for Sale of Self-Service Storage Insurance.

I.  At every location where self-service storage insurance is offered to renters, brochures or other written or electronic materials shall be made available to renters which:

(a)  Disclose that self-service storage insurance may provide a duplication of coverage already provided by a renter's homeowner's insurance policy, residential renter's insurance policy, motor vehicle insurance policy, or other source of coverage.

(b)  State that the enrollment by the renter in the self-service storage insurance program offered by the owner is not required in order to rent a rented space at the self-service storage facility.

(c)  Provide the actual terms of the self-service storage insurance coverage, or summarize the material terms of the insurance coverage, including:

(1)  The identity of the insurer;

(2)  The identity of the supervising entity;

(3)  The amount of any applicable deductible and how it is to be paid;

(4)  Benefits of the coverage; and

(5)  Key terms and conditions of the coverage.

(d)  Provide a toll-free number for the supervising entity or the insurer and a summary of the process for filing a claim.

(e)  State that a renter that purchases self-service storage insurance coverage may cancel such coverage at any time and the person paying the premium shall receive a refund of any applicable unearned premium.

II.  Self-service storage insurance may be offered on a month-to-month or other periodic basis under an individual policy or a group or master commercial inland marine policy.

III.  A certificate, endorsement, brochure, or other evidence, whether written or electronic, setting forth the terms and conditions of the self-service storage insurance coverage shall be provided to each renter that purchases self-service storage insurance.

402-O:4  Authority of Owners.

I.  The employees and authorized representatives of owners may sell and offer self-service storage insurance to renters and shall not be subject to licensure as an insurance producer under this chapter provided that:

(a)  The owner obtains a limited lines license to authorize its employees and authorized representatives to sell and offer self-service storage insurance pursuant to this chapter.

(b)  The insurer issuing the self-service storage insurance either directly supervises or appoints a supervising entity to supervise the administration of the program, including development of a training program for employees and authorized representatives of the owners.  The training required by this section shall comply with the following:

(1)  The training shall be delivered only to the employees and authorized representatives who are directly engaged in the activity of selling and offering self-service storage insurance.

(2)  The training may be provided in electronic form.  However, if conducted in electronic form the supervising entity shall implement a supplemental education program regarding the self-service storage insurance that is conducted and overseen by a licensed producer.

(3)  Each employee and authorized representative who is directly engaged in the activity of selling and offering self-service storage insurance shall receive basic instruction about the self-service storage insurance offered to renters and the disclosures required under RSA 402-O:3.

(c)  No employee or authorized representative of an owner shall advertise, represent, or otherwise hold himself or herself out as a non-limited lines licensed insurance producer, unless otherwise licensed.

II.  The charges for self-service storage insurance coverage may be billed and collected by the owner and its employees and authorized representatives.  Any charge to the renter for coverage that is not included in the cost associated with the rental of rented space shall be separately itemized on the renter's bill.  If the self-service storage insurance coverage is included with the rental of rented space, the owner shall clearly and conspicuously disclose to the renter, on the rental invoice or elsewhere, that the self-service storage insurance coverage is included with the rental of rented space.  Owners billing and collecting such charges shall not be required to maintain such funds in a segregated account provided that the owner is authorized by the insurer or supervising entity to hold such funds in an alternative manner and remits such amounts to the insurer or supervising entity within 60 days of receipt.  All premiums received by an owner from a renter for the sale of self-service storage insurance shall be considered funds held by the owner in a fiduciary capacity for the benefit of the insurer.  An owner may receive compensation for billing and collection services.

402-O:5  Suspension or Revocation of License.  If an owner or its employee or authorized representative violates any provision of this chapter, the commissioner may:

I.  After notice and hearing, impose fines not to exceed $500 per violation or $5,000 in the aggregate for such conduct.

II.  After notice and hearing, impose other penalties that the commissioner deems necessary and reasonable to carry out the purpose of this article, including:

(a)  Suspending the privilege of transacting self-service storage insurance pursuant to this section at specific business locations where violations have occurred; and

(b)  Suspending or revoking the ability of individual employees or authorized representatives to act under the license.

402-O:6  Application for License.

I.  A sworn application for a license under this chapter shall be made to and filed with the commissioner on forms prescribed and furnished by the commissioner.  The applicant may be a resident or non-resident of this state.

II.  The application shall provide:

(a)  The name, residence address, and other information required by the commissioner for an authorized representative of the owner or supervising entity that is designated by the applicant as the person responsible for the owner's compliance with the requirements of this chapter.  However, if the owner derives more than 50 percent of its revenue from the sale of self-service storage insurance the information noted above shall be provided for all officers, directors, and shareholder of record having beneficial ownership of 10 percent or more of any class of securities registered under the federal securities law; and

(b)  The location of the owner's home office.

III.  Any owner engaging in self-service storage insurance transactions on or before the effective date of this chapter shall apply for licensure within 90 days of the application being made available by the commissioner.  Any applicant commencing operations after the effective date of this chapter shall obtain a license prior to offering self-service storage insurance.

IV.  Initial licenses issued pursuant to this chapter shall expire on the second May 31 from the date of issue.  Renewed licenses shall be effective for 2 years, expiring on May 31.

V.  Each owner licensed under this chapter shall pay a fee as determined by the commissioner provided that the fee shall not exceed $500 for an initial self-service storage insurance license and $250 for each license renewal.  However, for an owner who sells self-service storage insurance at 10 or fewer locations in the state the fee shall not exceed $100 for an initial license and for each renewal of a license.

VI.  A self-service storage insurance license which lapses may, within 24 months from the due date of the renewal, be reinstated with a penalty in the amount of double the unpaid renewal fee for any renewal received after the due date pursuant to paragraph IV.

402-O:7  Consumer Protection.  Failure to comply with this chapter shall constitute an unfair insurance trade practice under RSA 417:4.

2  Effective Date.  This act shall take effect January 1, 2021.

 

LBAO

20-2796

Amended 3/9/20

 

SB 577-FN- FISCAL NOTE

AS AMENDED BY THE SENATE (AMENDMENT #2020-0781s)

 

AN ACT relative to self-service storage insurance.

 

FISCAL IMPACT:      [ X ] State              [    ] County               [    ] Local              [    ] None

 

 

 

Estimated Increase / (Decrease)

STATE:

FY 2020

FY 2021

FY 2022

FY 2023

   Appropriation

$0

$0

$0

$0

   Revenue

$0

Indeterminable Increase

Indeterminable Increase

Indeterminable Increase

   Expenditures

$0

$0

$0

$0

Funding Source:

  [    ] General            [    ] Education            [    ] Highway           [ X ] Other - License fee revenue

 

 

 

 

 

METHODOLOGY:

This bill establishes procedures for self-storage insurance.  The Insurance Department indicates this bill would permit owners of self-storage facilities to sell property insurance to their renters.  The bill would allow the facility to include the insurance premium in the monthly rental fee for the storage unit.  The Department expects there would be a small, but indeterminable, increase in licensing fees collected by the Department.  The Department assumes that, while there would be additional responsibilities for employees at the Insurance Department, there would not be a measurable increase in expenditures.

 

AGENCIES CONTACTED:

Insurance Department

 

Links

SB577 at GenCourtMobile
SB577 Discussion

Action Dates

Date Body Type
Jan. 14, 2020 Senate Hearing
March 5, 2020 Senate Floor Vote

Bill Text Revisions

SB577 Revision: 8219 Date: March 9, 2020, 12:05 p.m.
SB577 Revision: 7832 Date: Jan. 6, 2020, 3:23 p.m.

Docket


: Died on Table


June 30, 2020: Vacated and Laid on Table MA VV 06/30/2020 HJ 10 P. 2


March 12, 2020: Introduced 03/12/2020 and referred to Commerce and Consumer Affairs HJ 8 P. 227


March 5, 2020: Ought to Pass with Amendment 2020-0781s, MA, VV; OT3rdg; 03/05/2020; SJ 5


March 5, 2020: Committee Amendment # 2020-0781s, AA, VV; 03/05/2020; SJ 5


March 5, 2020: Committee Report: Ought to Pass with Amendment # 2020-0781s, 03/05/2020; Vote 5-0; CC; SC 9


Jan. 14, 2020: Hearing: 01/14/2020, Room 100, SH, 01:40 pm; SC 2


Jan. 8, 2020: To Be Introduced 01/08/2020 and Referred to Commerce; SJ 1