2015 -- H 5607 SUBSTITUTE A | |
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LC001485/SUB A/3 | |
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STATE OF RHODE ISLAND | |
IN GENERAL ASSEMBLY | |
JANUARY SESSION, A.D. 2015 | |
____________ | |
A N A C T | |
RELATING TO BUSINESSES AND PROFESSIONS - MOTOR VEHICLE GLASS REPAIR | |
AND REPLACEMENT | |
| |
Introduced By: Representatives Lima, and Serpa | |
Date Introduced: February 25, 2015 | |
Referred To: House Corporations | |
It is enacted by the General Assembly as follows: | |
1 | SECTION 1. Title 5 of the General Laws entitled "BUSINESSES AND PROFESSIONS" |
2 | is hereby amended by adding thereto the following chapter: |
3 | CHAPTER 38.5 |
4 | MOTOR VEHICLE GLASS CONSUMER PROTECTION ACT |
5 | 5-38.5-1. Short title. -- This chapter shall be known and may be cited as the "Motor |
6 | Vehicle Glass Consumer Protection Act." |
7 | 5-38.5-2. Purpose. -- By enacting this chapter, it is the intent of the general assembly to |
8 | protect consumers of motor vehicle glass repair and replacement services through the licensing |
9 | and regulation of motor vehicle glass repair shops. |
10 | 5-38.5-3. Definitions. -- As used in this chapter, the following terms shall have the |
11 | following meanings unless the context clearly specifies otherwise: |
12 | (1) "Department" means the Rhode Island department of business regulation, and the |
13 | official actions, duties and responsibilities of its director, deputy directors, employees or |
14 | authorized designees. |
15 | (2) "Director" means the director of the Rhode Island department of business regulation, |
16 | department officials or authorized individuals designated by the director to take official actions. |
17 | (3) "Person" means individuals, associations, partnerships, firms and corporations, and |
18 | the officers, directors and employees of a corporation. |
| |
1 | (4) "Motor vehicle glass repair" means the business or act of repairing or replacing |
2 | damaged or undamaged glass in motor vehicles for compensation. |
3 | (5) "Motor vehicle glass repair shop" means a person or entity which, for compensation, |
4 | or with the intention or expectation of receiving the same, repairs or replaces or undertakes to |
5 | repair or replace motor vehicle glass. |
6 | (6) "Licensed motor vehicle glass repair shop" means a motor vehicle glass repair shop |
7 | which has a current valid license for motor vehicle glass repair issued under this chapter. |
8 | (7) "Unlicensed motor vehicle glass repair shop" means a motor vehicle glass repair shop |
9 | that does not have a current valid license issued under this chapter, that has had its license |
10 | revoked or suspended, or that has surrendered its license under this chapter. |
11 | 5-38.5-4. Duties of the department of business regulation. – (a) The department shall |
12 | issue licenses as provided for in this chapter; and shall authorize the transfer of licenses and the |
13 | establishment of new offices for previously licensed motor vehicle glass repair shops. |
14 | (b) Within one year of the effective date of this chapter, the department shall issue a |
15 | motor vehicle glass repair license, without payment of fee, to any holder of a limited glass license |
16 | for motor vehicle glass installation issued by the department who submits an application as |
17 | outlined in this chapter; persons grandfathered under this subsection must be compliant with all |
18 | provisions of this chapter within one year of the effective date of this chapter, or such license |
19 | shall be revoked by the department. |
20 | (c) The department shall, in its discretion, conduct oversight of motor vehicle glass repair |
21 | shops, including: |
22 | (1) Acting on complaints from consumers and law enforcement officials; and |
23 | (2) Revoking, suspending, or taking other disciplinary actions with respect to facilities, |
24 | corporations, or persons licensed under this chapter. |
25 | (d) The department may adopt reasonable rules and regulations for the licensing of motor |
26 | vehicle glass repair shops, similar to other collision repair shops. |
27 | (e) The department may establish, adopt, amend, and rescind rules, regulations, |
28 | procedures, standards for sanitary, hygienic, and healthful conditions for work premises and |
29 | facilities used by motor vehicle glass repair shops as necessary to carry out the provisions of this |
30 | chapter. |
31 | (f) The department may establish minimum requirements for the certification of motor |
32 | vehicle glass repair technicians consistent with current vehicle glass standards established by |
33 | American National Standards Institute (ANSI) related to repair of laminated automotive glass and |
34 | auto glass replacement and other recognized national or corporate training programs. |
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1 | (g) Notwithstanding any provision or law to the contrary, this chapter shall not prohibit or |
2 | restrict the installation or repair of motor vehicle glass by an auto body repair shop licensed by |
3 | the department. |
4 | 5-38.5-5. Practices for which license is required. – (a) An annual license shall be issued |
5 | by the department to persons meeting the qualifications set by the department and paying the |
6 | required fees. |
7 | (b) No person shall engage in motor vehicle glass repair, or advertise or represent in any |
8 | form or manner that he, she, or it is a motor vehicle glass repair shop, unless such person |
9 | possesses a current valid license to operate or conduct a motor vehicle glass repair shop issued |
10 | under this chapter. |
11 | (c) Any motor vehicle glass repair to be performed in the state shall be performed by a |
12 | licensed motor vehicle glass repair shop pursuant to this chapter. |
13 | 5-38.5-6. Applications for licenses. – (a) Application for motor vehicle glass repair shop |
14 | licenses shall be made to the department of business regulation in any form the department |
15 | requires and shall be accompanied by the required fee and evidence of financial responsibility. In |
16 | the application, the department: |
17 | (1) Shall require the name and address of the applicant and of any person having financial |
18 | interest, direct or indirect, in the business to be conducted by the applicant, identify at least one |
19 | natural person who is in charge of the operations of the applicant, and such other information as |
20 | the director shall require; |
21 | (2) May require information relating to the applicant's financial standing, the applicant's |
22 | business integrity, whether the applicant has an established place of business, whether the |
23 | applicant is properly able to conduct the business of a motor vehicle glass repair shop, and any |
24 | other pertinent information consistent with the safeguarding of the public interest in the locations |
25 | in which the applicant proposes to engage in business, all of which may be considered by the |
26 | department in determining whether the granting of that application is in the public interest. |
27 | (b) A person applying for licensing or renewal as a licensed motor vehicle glass repair |
28 | shop shall: |
29 | (1)(i) Maintain a physical place of business within the state at which it has indoor |
30 | facilities suitable to perform motor vehicle glass repair services and from which it may lawfully |
31 | dispatch mobile service vans with the intention of performing glass repair services on a mobile |
32 | basis; or |
33 | (ii) If providing motor vehicle glass repair services on a mobile-only basis, have access to |
34 | indoor facilities licensed or subject to regulation under chapters 38, 38.3, or 38.5 of title 5 or |
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1 | chapter 5 of title 31 at which services must be performed indoors during inclement weather, in |
2 | accordance with the resin and adhesive manufacturer instructions, as well as ANSI standards. |
3 | (2) If using a mobile service van, register and insure such van as a commercial vehicle; |
4 | (3) If providing motor vehicle glass repair services, possess and maintain in working |
5 | order the equipment necessary to provide motor vehicle windshield glass stone chip repair; |
6 | (4) If providing motor vehicle glass repair services, possess and maintain the equipment |
7 | necessary to perform motor vehicle glass replacement services; |
8 | (5) Obtain all required local, state and federal licenses and permits, including a state sales |
9 | tax identification number and a federal tax identification number; |
10 | (6) Not subcontract or sublet motor vehicle glass repair services to any other person or |
11 | entity not in the employ of the licensed motor vehicle glass repair shop unless such person or |
12 | entity is also a duly licensed motor vehicle glass repair shop. |
13 | 5-38.5-7. Duration of license - Renewal. – (a) The department shall determine the term |
14 | of each license issued pursuant to this chapter and may issue multi-year licenses with a fee for |
15 | each year of licensure paid in full at issuance or renewal; provided, however, no license shall |
16 | remain in force for a period in excess of three (3) years. All licenses shall be issued for the twelve |
17 | (12) month period commencing on January 1 of each year, and the fee thereafter shall be at the |
18 | full annual rate specified in § 5-38.5-8, regardless of the date of application or issuance of that |
19 | license. |
20 | (b) Any fee for the initial issuance or renewal of a license issued pursuant to this chapter |
21 | shall be determined by multiplying the current annual fee by the term of initial licensure or |
22 | renewal. The total fee for the entire term of licensure or renewal shall be paid at the time of |
23 | application for the license or renewal. The license shall be renewed upon payment of the renewal |
24 | fee |
25 | 5-38.5-8. License fee. – The license fee for each year shall be three hundred dollars |
26 | ($300). If an applicant desires to do business in more than one location, he, she, or it shall pay a |
27 | separate fee of three hundred dollars ($300) for each location authorized by the department. For |
28 | the purposes of this section, the term "location" means a physical place of business at which a |
29 | licensed motor vehicle glass repair shop has indoor facilities suitable to perform motor vehicle |
30 | glass repair services, and shall not apply to locations where a licensed motor vehicle glass repair |
31 | shop provides services on a mobile basis. |
32 | 5-38.5-9. Licenses – Content and display. – (a) The license of motor vehicle glass |
33 | repair shop shall specify the name of the holder of that business and the location at which |
34 | business is conducted, shall not be transferable, may be exercised only by the person whose name |
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1 | appears on the license, and must be conspicuously displayed at that location. The license number |
2 | shall appear on all business communications, estimates, signs, business cards, and other written |
3 | documentation relating to that business. |
4 | (b) No unlicensed motor vehicle glass repair shop shall display in its place of business |
5 | any license or copy or facsimile of a license, nor shall it in any manner state that it is, or hold |
6 | itself out to be, a licensed motor vehicle glass repair shop. |
7 | (c) Prior to its expiration date, a license may be suspended or revoked by the department |
8 | in accordance with the procedure and on the grounds set forth in this chapter, or may be |
9 | terminated by voluntary surrender by the license holder. |
10 | (d) Upon the expiration, termination or surrender of a license, the licensee shall deliver |
11 | the license to the department who shall cancel the license and endorse the date of expiration, |
12 | termination, or surrender on the certificate. |
13 | (e) The department shall open to public inspection either by keeping on file in convenient |
14 | form or by publishing on the department's website a list of names and addresses of all motor |
15 | vehicle glass repair shops licensed by the department, and the names of all persons whose |
16 | licenses have been revoked, suspended or surrendered and the specific time for which such |
17 | suspension, revocation or surrender became effective. |
18 | 5-38.5-10. Grounds for denial, suspension, or revocation of licenses. – The department |
19 | may deny an application for license or suspend or revoke a license after it has been granted, for |
20 | any of the following reasons: |
21 | (1) On proof of unfitness of the applicant to do business as a motor vehicle glass repair |
22 | shop; |
23 | (2) For any misstatement by the applicant in his or her application for a license; |
24 | (3) For any failure to comply with the provisions of this chapter or with any rule or |
25 | regulation promulgated by the department; |
26 | (4) For defrauding any customer; |
27 | (5) For dismantling any motor vehicle glass without the written authorization of the |
28 | motor vehicle owner; |
29 | (6) For refusing to surrender any motor vehicle to its owner upon tender of payment of |
30 | the proper charges for towing, storage, and work done on that motor vehicle; |
31 | (7) For having indulged in any unconscionable practice relating to the business as a motor |
32 | vehicle glass repair shop; |
33 | (8) For willful failure to perform work as contracted for; |
34 | (9) For failure to comply with the safety standards of the industry; |
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1 | (10) For the purchase of used vehicle parts from unlicensed entities; or |
2 | (11) For failure to comply with the requirements of displaying of licenses or notices |
3 | required by this chapter. |
4 | 5-38.5-11. Procedure for suspension or revocation of license. – No license shall be |
5 | suspended or revoked except after a hearing before the department or a hearing officer appointed |
6 | by the department. The hearing shall be conducted in accordance with the administrative |
7 | procedures act, chapter 35 of title 42. The order to suspend or revoke that license shall not be |
8 | effective for ten (10) days after written notice has been sent to the licensee. |
9 | 5-38.5-12. Right to appeal. – Any licensee or applicant for license or other person in |
10 | interest being aggrieved by the final order or decision of the department of business regulation |
11 | has the right to appeal, pursuant to the administrative procedures act, chapter 35 of title 42. |
12 | 5-38.5-13. Records; repair bills - Disclosure. – (a) Every licensed motor vehicle glass |
13 | repair shop shall maintain records for each motor vehicle upon which motor vehicle glass repair |
14 | services have been performed, showing the usage of all glass parts, major accessory parts, |
15 | including moldings and major hardware component parts, and the adhesive system used in the |
16 | motor vehicle glass repair. The record shall also include the brand, product number or name and |
17 | lot and batch numbers for the adhesive system product used. The record shall be maintained for |
18 | thirty-six (36) months or for so long as a warranty on the motor vehicle glass repair service |
19 | performed is in effect, whichever is longer. |
20 | (b) Each repair bill shall: |
21 | (1) Contain the motor vehicle glass repair shop license number or if providing motor |
22 | vehicle glass repair services on a mobile-only basis, contain the license number of the facility or |
23 | facilities where work is to be performed during inclement weather; |
24 | (2) Contain an itemized listing of the usage of all glass parts, major accessory parts, |
25 | including moldings and major hardware component parts, and the adhesive system used in the |
26 | motor vehicle glass repair; |
27 | (3) Include the brand, product number or name and lot and batch numbers for the |
28 | adhesive system product used; |
29 | (4) Include a certification under the penalties of perjury that the repairs to a particular |
30 | vehicle have actually been made and were completed by a licensed shop and certified technician |
31 | as determined by the department; and |
32 | (5) Advise the consumer of post-repair practices and the appropriate drive away time that |
33 | may be necessary to insure safe operation of the vehicle. |
34 | (c) Upon request of a consumer, a licensed motor vehicle glass repair shop shall disclose |
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1 | all information relating to the charges for repair or replacement services, including the amount of |
2 | the charges, the identification and line item charges for the parts provided and verification of the |
3 | parts used, regardless of whether the amount is paid by the consumer or billed to the consumer's |
4 | insurance company. |
5 | 5-38.5-14. Responsibility of licensee for acts of agents. – If a licensee is a firm or |
6 | corporation, it is sufficient cause for the suspension or revocation of a license that any officer, |
7 | director, or trustee of the firm or corporation or any member, in the case of a partnership, has |
8 | been found by the department of business regulation guilty of any act or omission which would |
9 | be cause for refusing, suspending, or revoking a license to that party as an individual. Each |
10 | licensee shall be responsible for the acts of any salesperson or any person acting as the agent for |
11 | that licensee, and for the acts of any salesperson, estimator, or other employee acting as the agent |
12 | for that licensee. |
13 | 5-38.5-15. Reimbursement fee. – The director of the department may assess a motor |
14 | vehicle glass repair shop for reimbursement of the department's actual expenses for the |
15 | investigation and hearing of significant motor vehicle glass repair shop matters. An assessment |
16 | may be sought in the event that a motor vehicle glass repair shop does not prevail after a final |
17 | judicial appeal. |
18 | 5-38.5-16. Prohibited practices. – (a) No licensed motor vehicle glass repair shop or |
19 | other person shall: |
20 | (1) Advertise for motor vehicle glass repair services in the state without including its |
21 | license number issued by the department as part of the advertisement. |
22 | (2) Make any false or fraudulent statement in connection with any motor vehicle glass |
23 | repair or attempt to collect for a motor vehicle glass repair; or without lawful authority, prevent |
24 | the owner of a motor vehicle from recovering the same. |
25 | (3) Knowingly submit a claim to an insurer or a third-party administrator for vehicle glass |
26 | repair, replacement or for related-services: |
27 | (i) If the vehicle glass was not damaged prior to repair or replacement; |
28 | (ii) If the services were not provided; |
29 | (iii) Showing work performed in a geographical area that in fact was not the location |
30 | where the services were provided and that results in a higher payment than would otherwise be |
31 | paid to the person by the policyholder's insurer; |
32 | (iv) Without having authorization by the owner, lessee, or insured driver of the vehicle |
33 | for the repair of the vehicle; |
34 | (v) Showing work performed on a date other than the date the work was actually |
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1 | performed and resulting in a change of insurance coverage status; or |
2 | (vi) Making any other material misrepresentation related to any vehicle glass services |
3 | provided. |
4 | (4) Advise a policyholder to falsify the date of damage to the vehicle glass that results in |
5 | a change of insurance coverage for repair or replacement of the vehicle glass. |
6 | (5) Falsely sign, on behalf of a policyholder or another person, a work order, insurance |
7 | assignment form, or other related form in order to submit a claim to an insurer for vehicle glass |
8 | repair or replacement or for related services. |
9 | (6) Knowingly misrepresent to a policyholder or other person: |
10 | (i) The price of the proposed repairs or replacement being billed to the policyholder's |
11 | insurer; and |
12 | (ii) That the insurer has authorized the repairs or replacement of the glass of the insured |
13 | vehicle. |
14 | (7) Represent to a policyholder or other person that the repair or replacement will be paid |
15 | for entirely by the policyholder's insurer and at no cost or "free" to the policyholder unless the |
16 | insurance coverage has been verified by an authorized representative of the insurer. |
17 | (8) Add to the damage of vehicle glass before repair in order to increase the scope of |
18 | repair or replacement or encourage a policyholder or other person to add to the damage of vehicle |
19 | glass before repair. |
20 | (9) Perform work clearly and substantially beyond the level of work necessary to repair |
21 | or replace the vehicle glass to return the vehicle back to a safe pre-loss condition. |
22 | (10) Perform work as an unlicensed motor vehicle glass repair shop. |
23 | (11) Perform work inconsistent with standards established by the American National |
24 | Standards Institute (ANSI) related to repair of laminated automotive glass and auto glass |
25 | replacement. |
26 | (b) It is unlawful for a person who sells or repairs and replaces motor vehicle glass to |
27 | intentionally misrepresent the relationship of the licensed motor vehicle glass repair shop to an |
28 | insurer. |
29 | (c) A licensed motor vehicle glass repair shop, including any agent, contractor, vendor, |
30 | representative, or anyone acting on its behalf, must not: |
31 | (1) Threaten, coerce, or intimidate a person to file a claim for motor vehicle glass repair |
32 | or replacement. |
33 | (2) Engage in unfair or deceptive practices to induce a person to file a motor vehicle glass |
34 | repair claim. |
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1 | (3) Induce a person to file a motor vehicle glass repair claim when the damage to the |
2 | motor vehicle glass is insufficient to warrant vehicle glass repair or replacement. |
3 | (4) Perform motor vehicle glass repair or replacement services under an insurance policy |
4 | without first obtaining insurer approval. |
5 | (d) A violation of this section is subject to enforcement under this chapter. |
6 | 5-38.5-17. Civil penalties for violations. – In addition to every other power granted to |
7 | the department of business regulation, the department may fine a licensee not more than one |
8 | hundred dollars ($100) for any violation or failure to comply with the provisions of this chapter or |
9 | with any rule or regulation promulgated by the department. |
10 | 5-38.5-18. Criminal penalties for violations – Injunctive relief. – (a) Any person, firm, |
11 | or corporation required to be licensed under this chapter who conducts a motor vehicle glass |
12 | repair shop business without obtaining a license, or who after the denial, suspension, or |
13 | revocation of a license conducts that business, is guilty of a misdemeanor and shall, upon |
14 | conviction, be punished by a fine of not more than one thousand dollars ($1,000), or |
15 | imprisonment for not more than one year, or both; for a second conviction, is guilty of a felony |
16 | and shall, upon conviction, be punished by a fine of not less than one thousand dollars ($1,000) |
17 | and not more than five thousand dollars ($5,000), or by imprisonment for not more than two (2) |
18 | years, or both; and for a third and subsequent conviction, is guilty of a felony and shall, upon |
19 | conviction, be punished by a fine of not less than five thousand dollars ($5,000), or imprisonment |
20 | for not less than two (2) years nor more than five (5) years, or both. For the purposes of this |
21 | section, a plea of nolo contendere with probation shall be considered a conviction. |
22 | (b) If the department has reason to believe that any person, firm, corporation, or |
23 | association is conducting a motor vehicle glass repair shop business without obtaining a license, |
24 | or who after the denial, suspension, or revocation of a license is conducting that business, the |
25 | department may issue its order to that person, firm, corporation, or association commanding them |
26 | to appear before the department at a hearing to be held not sooner than ten (10) days after |
27 | issuance of that order to show cause why the department should not issue an order to that person |
28 | to cease and desist from the violation of the provisions of this chapter. That order to show cause |
29 | may be served on any person, firm, corporation, or association named by any person in the same |
30 | manner that a summons in a civil action may be served, or by mailing a copy of the order, |
31 | certified mail, return receipt requested, to that person at any address at which that person has done |
32 | business or at which that person lives. If during that hearing the department is satisfied that the |
33 | person is in fact violating any provision of this chapter, the department may order that person, in |
34 | writing, to cease and desist from that violation. All hearings herein are governed in accordance |
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1 | with the administrative procedures act, chapter 35 of title 42. If that person fails to comply with |
2 | an order of the department after being afforded a hearing, the superior court for Providence |
3 | County has jurisdiction upon complaint of the department to restrain and enjoin that person from |
4 | violating this chapter. |
5 | 5-38.5-19. Severability. – The provisions of this chapter are severable; and if any of the |
6 | provisions are held to be invalid, the decision of the court respecting that provision or provisions |
7 | shall not affect the validity of any other provision, which can be given effect without that invalid |
8 | provision. |
9 | SECTION 2. Section 27-29-4 of the General Laws in Chapter 27-29 entitled "Unfair |
10 | Competition and Practices" is hereby amended to read as follows: |
11 | 27-29-4. Unfair methods of competition and unfair or deceptive acts or practices |
12 | defined. -- The following are defined as unfair methods of competition and unfair and deceptive |
13 | acts or practices in the business of insurance: |
14 | (1) Misrepresentations and false advertising of policies or contracts. - Making, issuing, |
15 | circulating, or causing to be made, issued, or circulated, any estimate, illustration, circular, or |
16 | statement, sales presentation, omission, or comparison misrepresenting the terms of any policy |
17 | issued or to be issued or the benefits, conditions, or advantages promised by any policy or the |
18 | dividends or share of the surplus to be received on any policy, or making any false or misleading |
19 | statement as to the dividends or share of surplus previously paid on any policy, or making any |
20 | misleading representation or any misrepresentation as to the financial condition of any insurer, or |
21 | as to the legal reserve system upon which any life insurer operates, or using any name or title of |
22 | any policy or class of policies misrepresenting the true nature of that policy or class of policies, or |
23 | making any misrepresentation to any policyholder insured in any company including any |
24 | intentional misquote of a premium rate, for the purpose of inducing or tending to induce the |
25 | policyholder to lapse, forfeit, or surrender his or her insurance, or misrepresenting for the purpose |
26 | of effecting a pledge or assignment of or effecting a loan against any policy, or misrepresenting |
27 | any policy as being share or stock; |
28 | (2) False information and advertising generally. - Making, publishing, disseminating, |
29 | circulating, or placing before the public or causing, directly or indirectly, to be made, published, |
30 | disseminated, circulated, or placed before the public in a newspaper, magazine, or other |
31 | publication, or in the form of a notice, circular, pamphlet, letter, or poster, or over any radio or |
32 | television station, or in any other way, an advertisement, announcement, or statement containing |
33 | any assertion, representation, or statement with respect to the business of insurance or with |
34 | respect to any person in the conduct of his or her insurance business which is untrue, deceptive, |
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1 | or misleading; |
2 | (3) Defamation. - Making, publishing, disseminating, or circulating, directly or |
3 | indirectly, or aiding, abetting, or encouraging the making, publishing, disseminating, or |
4 | circulating of any oral or written statement or any pamphlet, circular, article of literature which is |
5 | false or maliciously critical of or derogatory to the financial condition of an insurer, and which is |
6 | calculated to injure any person engaged in the business of insurance; |
7 | (4) Boycott, coercion, and intimidation. - Entering into any agreement to commit, or by |
8 | any concerted action committing, any act of boycott, coercion, or intimidation resulting in or |
9 | tending to result in unreasonable restraint of, or monopoly in, the business of insurance; |
10 | (5) (i) False financial statements. - Knowingly filing with any supervisory or other public |
11 | official, or knowingly making, publishing, disseminating, circulating, or delivering to any person, |
12 | or placing before the public or causing directly or indirectly, to be made, published, disseminated, |
13 | circulated, delivered to any person, or placed before the public any false material statement of |
14 | financial condition of an insurer; or |
15 | (ii) Knowingly making any false entry of a material fact in any book, report, or statement |
16 | of any insurer or knowingly omitting to make a true entry of any material fact pertaining to the |
17 | business of the insurer in any book, report, or statement of the insurer; |
18 | (6) Stock operations and advisory board contracts. - Issuing or delivering or permitting |
19 | agents, officers, or employees to issue or deliver agency company stock or other capital stock, or |
20 | benefit certificates or shares in any common law corporation, or securities of any special or |
21 | advisory board contracts or other contracts of any kind promising returns and profits as an |
22 | inducement to insurance; |
23 | (7) (i) Unfair discrimination. - Making or permitting any unfair discrimination between |
24 | individuals of the same class and equal expectation of life in the rates charged for any policy of |
25 | life insurance or of life annuity or in the dividends or other benefits payable on any such policy or |
26 | life annuity, or in any other of the terms and conditions of the policy; or |
27 | (ii) Making or permitting any unfair discrimination between individuals of the same |
28 | class and of essentially the same hazard in the amount of premium, policy fees, or rates charged |
29 | for any policy or contract of accident or health insurance or in the benefits payable under any |
30 | policy or contract, or in any of the terms or conditions of that policy, or in any other manner; |
31 | (iii) Making or permitting any unfair discrimination between individuals or risks of the |
32 | same class and of essentially the same hazards by refusing to issue, refusing to renew, canceling, |
33 | or limiting the amount of insurance coverage on a property or casualty risk because of the |
34 | geographic location of the risk, unless: |
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1 | (A) The refusal, cancellation, or limitation is for a business purpose that is not a pretext |
2 | for unfair discrimination; or |
3 | (B) The refusal, cancellation, or limitation is required by law or regulation; |
4 | (iv) Making or permitting any unfair discrimination between individuals or risks of the |
5 | same class and of essentially the same hazards by refusing to issue, refusing to renew, canceling, |
6 | or limiting the amount of insurance coverage on a residential property risk, or the personal |
7 | property contained in the residential property risk, because of the age of the residential property, |
8 | unless: |
9 | (A) The refusal, cancellation, or limitation is for a business purpose that is not a pretext |
10 | for unfair discrimination; or |
11 | (B) The refusal, cancellation, or limitation is required by law or regulation; |
12 | (v) Refusing to insure, refusing to continue to insure, or limiting the amount of coverage |
13 | available to an individual because of the sex or marital status of the individual; nothing in this |
14 | subsection shall prohibit an insurer from taking marital status into account for the purpose of |
15 | defining persons eligible for dependent benefits; or |
16 | (vi) To terminate, or to modify coverage, or to refuse to issue or refuse to renew any |
17 | property or casualty policy solely because the applicant or insured or any employee of either is |
18 | mentally or physically impaired; provided, that this subsection shall not apply to accident and |
19 | health insurance sold by a casualty insurer and, provided that this subsection shall not be |
20 | interpreted to modify any other provision of law relating to the termination, modification, |
21 | issuance or renewal of any insurance policy or contract; |
22 | (8) (i) Rebates. - Except as otherwise expressly provided by law, knowingly permitting |
23 | or offering to make or making any policy or agreement as to the policy other than as plainly |
24 | expressed in the policy issued on it, or paying or allowing or giving or offering to pay, allow, or |
25 | give, directly or indirectly, as inducement to the policy, any rebate of premiums payable on the |
26 | policy, or any special favor or advantage in the dividends or other benefits on the policy, or any |
27 | valuable consideration or inducement not specified in the policy, or giving, selling, or purchasing |
28 | or offering to give, sell, or purchase as inducement to the policy, or in connection with the policy, |
29 | any stocks, bonds, or other securities of any insurance company or other corporation, association, |
30 | or partnership, or any dividends or profits accrued on the security, or anything of value not |
31 | specified in the policy; |
32 | (ii) Nothing in subdivision (7) of this section or paragraph (i) of this subdivision shall be |
33 | construed as including within the definition of discrimination or rebates any of the following |
34 | practices: |
| LC001485/SUB A/3 - Page 12 of 18 |
1 | (A) In the case of any contract of life insurance policies or life annuity, annuities paying |
2 | bonuses to policyholders or abating their premiums in whole or in part out of surplus accumulated |
3 | from nonparticipating insurance; provided, that any bonuses or abatement of premiums shall be |
4 | fair and equitable to policyholders and for the best interests of the company and its policyholders; |
5 | (B) In the case of life insurance policies issued on the industrial debit plan, making |
6 | allowance to policyholders who have continuously for a specified period made premium |
7 | payments directly to an office of the insurer in an amount which fairly represents the saving in |
8 | collection expenses; and |
9 | (C) Readjustment of the rate of premium for a group insurance policy based on the loss |
10 | or expense experience under it, at the end of the first or any subsequent policy year of insurance |
11 | under the policy, which may be made retroactive only for the policy year; |
12 | (9) (i) Free choice of insurance producer or insurer. - When any person, firm, or |
13 | corporation engaged in the business of lending money on the security of real or personal property, |
14 | or in the business of negotiating, purchasing, selling, or holding loans on the security of real |
15 | property, or in the business of building, selling, or financing the sale or purchase of real property, |
16 | or any trustee, director, officer, agent, or other employee of that person, firm, or corporation, |
17 | requires that property insurance be procured for the property, the borrower, debtor, or purchaser |
18 | shall have free choice of insurance producer and insurer through or by which the insurance is to |
19 | be placed or written, subject only to the right of the builder, creditor, lender, or seller: |
20 | (A) To require evidence, to be produced at a reasonable time prior to commencement or |
21 | renewal of risk, that the insurance providing reasonable coverage has been obtained in an amount |
22 | equal to the amount required by the builder, creditor, lender, or seller; |
23 | (B) To require insurance in an insurer authorized to do business and having a licensed |
24 | resident insurance producer agent in this state; and |
25 | (C) To refuse to accept insurance in a particular insurer on reasonable grounds related to |
26 | solvency; |
27 | (ii) When any contractor or subcontractor is required to procure a surety bond or policy |
28 | of insurance with respect to any building or construction contract which is about to be, or which |
29 | has been bid or entered into, the contractor or subcontractor shall have free choice of insurance |
30 | producer and insurer through or by which the surety bond or insurance is to be written; provided, |
31 | that the owner or contractor shall have the right: (A) to require evidence, to be produced at a |
32 | reasonable time prior to commencement or renewal of risk, that the insurance providing |
33 | reasonable coverage has been obtained in an amount equal to the amount required by the builder, |
34 | creditor, lender, or seller; (B) to require insurance in an insurer authorized to do business and |
| LC001485/SUB A/3 - Page 13 of 18 |
1 | having a licensed resident insurance producer in this state; and (C) to refuse to accept insurance in |
2 | a particular insurer on reasonable grounds related to solvency; provided, that the owner or |
3 | contractor shall have the right to approve the form, sufficiency, or manner of execution of the |
4 | surety bond or policy or insurance furnished by the insurance company or insurance producer |
5 | selected by the contractor or subcontractor; |
6 | (iii) No person who lends money or extends credit may: |
7 | (A) Solicit insurance for the protection of real property after a person indicates interest in |
8 | securing a first mortgage credit extension until that person has received a commitment in writing |
9 | from the lender as to a loan or credit extension; |
10 | (B) Unreasonably reject a policy furnished by the borrower for the protection of the |
11 | property securing the creditor lien. A rejection shall not be deemed unreasonable if it is based on |
12 | reasonable standards, uniformly applied, relating to the extent of coverage required and the |
13 | financial soundness and the services of an insurer. The standards shall not discriminate against |
14 | any particular type of insurer, nor shall the standards call for rejection of a policy because it |
15 | contains coverage in addition to that required in the credit transaction; |
16 | (C) Require that any borrower, mortgagor, purchaser, insurer, or insurance producer pay |
17 | a separate charge, in connection with the handling of any policy required as security for a loan on |
18 | real estate, or pay a separate charge to substitute the policy of one insurer for that of another. This |
19 | subsection does not include the interest that may be charged on premium loans or premium |
20 | advancements in accordance with the terms of the loan or credit document; |
21 | (D) Use or disclose, without the prior written consent of the borrower, mortgagor, or |
22 | purchaser taken at a time other than the making of the loan or extension of credit, information |
23 | relative to a policy which is required by the credit transaction, for the purpose of replacing the |
24 | insurance; or |
25 | (E) Require any procedures or conditions of duly licensed insurance producers or |
26 | insurers not customarily required of those insurance producers or insurers affiliated or in any way |
27 | connected with the person who lends money or extends credit; |
28 | (iv) Every person who lends money or extends credit and who solicits insurance on real |
29 | and personal property subject to paragraph (iii) of this subdivision shall explain to the borrower in |
30 | writing that the insurance related to the credit extension may be purchased from an insurer or |
31 | insurance producer of the borrower's choice, subject only to the lender's right to reject a given |
32 | insurer or insurance producer as provided in paragraph (iii)(B) of this subdivision. Compliance |
33 | with disclosures as to insurance required by truth in lending laws or comparable state laws shall |
34 | be compliance with this subsection; |
| LC001485/SUB A/3 - Page 14 of 18 |
1 | (v) This requirement for a commitment shall not apply in cases where the premium for |
2 | the required insurance is to be financed as part of the loan or extension of credit involving |
3 | personal property transactions; |
4 | (vi) The commissioner shall have the power to examine and investigate those insurance |
5 | related activities of any person or insurer that the commissioner believes may be in violation of |
6 | this section. Any affected person may submit to the commissioner a complaint or material |
7 | pertinent to the enforcement of this section; |
8 | (vii) Nothing in this section shall prevent a person who lends money or extends credit |
9 | from placing insurance on real or personal property in the event the mortgagor, borrower, or |
10 | purchaser has failed to provide required insurance in accordance with the terms of the loan or |
11 | credit document; |
12 | (viii) Nothing contained in this section shall apply to credit life or credit accident and |
13 | health insurance. |
14 | (10) Notice of free choice of insurance producer or insurer. - Every debtor, borrower, or |
15 | purchaser of property with respect to which insurance of any kind on the property is required in |
16 | connection with a debt or loan secured by the property or in connection with the sale of the |
17 | property, shall be informed in writing by the builder, creditor, lender, or seller, of his or her right |
18 | of free choice in the selection of the insurance producer and insurer through or by which the |
19 | insurance is to be placed. There shall be no interference, either directly or indirectly, with the |
20 | borrower's, debtor's, or purchaser's free choice of an insurance procedure and of an insurer which |
21 | complies with the requirements of this section, and the builder, creditor, lender, seller, owner, or |
22 | contractor shall not refuse the policy tendered by the borrower, debtor, purchaser, contractor, or |
23 | subcontractor. Upon notice of any refusal of the tendered policy, the insurance commissioner |
24 | shall order the builder, creditor, lender, seller, owner, or contractor to accept the tendered policy, |
25 | if the commissioner determines that the refusal is not in accordance with the requirements of this |
26 | section. Failure to comply with an order of the insurance commissioner shall be deemed a |
27 | violation of this section; |
28 | (11) Using insurance information to detriment of another. - Whenever the instrument |
29 | requires that the purchaser, mortgagor, or borrower furnish insurance of any kind on real property |
30 | being conveyed or is collateral security to a loan, the mortgagee, vendor, or lender shall refrain |
31 | from disclosing or using any and all insurance information to his or her or its own advantage and |
32 | to the detriment of either the borrower, purchaser, mortgagor, insurance company, or agency |
33 | complying with the requirements relating to insurance; |
34 | (12) Prohibited group enrollments. - No insurer shall offer more than one group policy of |
| LC001485/SUB A/3 - Page 15 of 18 |
1 | insurance through any person unless that person is licensed, at a minimum, as an insurance |
2 | producer. This prohibition shall not apply to employer-employee relationships, or to any of these |
3 | enrollments; |
4 | (13) Failure to maintain complaint handling procedures. - No insurer shall fail to |
5 | maintain a complete record of all the complaints it received since the date of its last examination |
6 | pursuant to the general laws providing for examination of insurers. This record shall indicate the |
7 | total number of complaints, their classification by line of insurance, the nature of each complaint, |
8 | the disposition of each complaint, and the time it took to process each complaint. For the |
9 | purposes of this subsection, "complaint" means any written communication primarily expressing |
10 | a grievance; |
11 | (14) Misrepresentation in insurance applications. - Making false or fraudulent statements |
12 | or representations on or relative to an application for a policy, for the purpose of obtaining a fee, |
13 | commission, money, or other benefit from any insurers, insurance producer, or individual person; |
14 | and |
15 | (15) Requiring that repairs be made to an automobile at a specified auto body repair shop |
16 | or interfering with the insured's or claimant's free choice of repair facility. - The insured or |
17 | claimant shall be promptly informed by the insurer of his or her free choice in the selection of an |
18 | auto body repair shop. Once the insured or claimant has advised the insurer that an auto body |
19 | repair shop has been selected, the insurer may not recommend that a different auto body repair |
20 | shop be selected to repair the automobile. An auto body repair shop may file a complaint with the |
21 | department of business regulation alleging a violation of this subdivision (15). Whenever the |
22 | department of business regulation has reason to believe that an insurer has violated this |
23 | subdivision (15), the department shall conduct an investigation and may convene a hearing. A |
24 | complaint filed by an auto body repair shop must be accompanied by a statement written and |
25 | signed by the insured or claimant setting forth the factual basis of the complaint, and the insured |
26 | or claimant must voluntarily appear and testify at any administrative proceedings on the |
27 | complaint. |
28 | (16) Requiring that motor vehicle glass repair be made at a specified motor vehicle glass |
29 | repair shop or interfering with the insured's or claimant's free choice of a licensed repair facility. |
30 | The insured or claimant shall be promptly informed by the insurer of his or her free choice in the |
31 | selection of a licensed motor vehicle glass repair shop. The insurer shall not require a person to |
32 | use or employ unfair or deceptive acts or practices, threaten, coerce or intimidate to induce a |
33 | person to use or select a particular licensed motor vehicle glass repair shop to provide motor |
34 | vehicle glass repair services. An insurer shall not knowingly contract with, refer motor vehicle |
| LC001485/SUB A/3 - Page 16 of 18 |
1 | glass repair services to, or otherwise negotiate with an unlicensed motor vehicle glass repair shop, |
2 | as defined in chapter 38.5 of title 5. Once the insured or claimant has advised the insurer that a |
3 | motor vehicle glass repair shop has been selected, the insurer may not recommend that a different |
4 | motor vehicle glass repair shop be selected to repair the motor vehicle glass, and an insurer shall |
5 | not assign or dispatch the repair work or forward a related policy or policyholder's contact or |
6 | repair scheduling information to a different licensed motor vehicle glass repair shop without the |
7 | knowledge and consent of the insured. An insured may at any point in time elect to change the |
8 | insured's choice of licensed motor vehicle glass repair shop. However, an insurer authorized to |
9 | conduct business in the state may provide directly or through other means, including electronic |
10 | transmissions, specific truthful and non-deceptive information regarding the features and benefits |
11 | available to the insured under the policy to assist the insured in selecting a licensed motor vehicle |
12 | glass repair shop or scheduling a licensed motor vehicle glass repair shop to perform motor |
13 | vehicle glass repair, or enter into any preferred provider agreements and/or participate in direct |
14 | repair programs or direct repair networks with licensed motor vehicle glass repair shops. A motor |
15 | vehicle glass repair shop may file a complaint with the department of business regulation alleging |
16 | a violation of subsection (16) of this section. Whenever the department of business regulation has |
17 | reason to believe that an insurer has violated subsection (16) of this section, the department shall |
18 | conduct an investigation and may convene a hearing. A complaint filed by a motor vehicle glass |
19 | repair shop must be accompanied by a statement written and signed by the insured or claimant |
20 | setting forth the factual basis of the complaint, and the insured or claimant must voluntarily |
21 | appear and testify at any administrative proceedings on the complaint. |
22 | SECTION 3. This act shall take effect on January 1, 2016. |
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LC001485/SUB A/3 | |
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| LC001485/SUB A/3 - Page 17 of 18 |
EXPLANATION | |
BY THE LEGISLATIVE COUNCIL | |
OF | |
A N A C T | |
RELATING TO BUSINESSES AND PROFESSIONS - MOTOR VEHICLE GLASS REPAIR | |
AND REPLACEMENT | |
*** | |
1 | This act would create a procedure for the licensing of motor vehicle glass repair or |
2 | replacement shops. |
3 | This act would take effect on January 1, 2016. |
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LC001485/SUB A/3 | |
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| LC001485/SUB A/3 - Page 18 of 18 |