2020 -- S 2391

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2020

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A N   A C T

RELATING TO INSURANCE -- INSURANCE CONSUMER PROTECTION SALES ACT

     

     Introduced By: Senator Mark P. McKenney

     Date Introduced: February 13, 2020

     Referred To: Senate Commerce

     It is enacted by the General Assembly as follows:

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     SECTION 1. Title 27 of the General Laws entitled "INSURANCE" is hereby amended by

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adding thereto the following chapter:

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CHAPTER 82

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INSURANCE CONSUMER PROTECTION SALES ACT

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     27-82-1. Short title.

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     This chapter shall be known and may be cited as the "Insurance Consumer Protection Sales

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Act."

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     27-82-2. Purpose.

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     The purpose of this chapter is to regulate noninsurance business entities in the disclosure

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of personal identifiable information for insurance sales.

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     27-82-3. Definitions.

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     For the purposes of this chapter:

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     (1) "Business entity" means an individual, firm, corporation, business trust, association,

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partnership, limited liability company, limited liability partnership or any legal entity, its affiliates

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or subsidiaries and any of its officers, agents, representatives or employees; provided, however,

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"business entity" shall not include financial institutions as defined and subject to the provisions of

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chapter 58 of title 27.

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     (2) "Director" means the director of the department of business regulation or their designee.

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     (3) "Insurance" includes all products defined or regulated as insurance by the department

 

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of business regulation except those products offered as follows:

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     (i) Portable electronics insurance as defined in § 27-2.7-1;

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     (ii) Credit life, credit accident and health, credit involuntary unemployment insurance;

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group credit insurance, forced placed or voluntary credit personal property insurance; group

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mortgage cancellation life insurance, or group mortgage accident and health insurance and

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annuities;

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     (iii) Insurance placed by a financial institution in connection with collateral pledged as

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security for a loan when the debtor breaches the contractual obligation to provide that insurance;

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and

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     (iv) Private mortgage insurance.

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     27-82-4. Authorization for implementing regulations.

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     The director may promulgate administrative regulations to effectuate the purposes of this

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chapter.

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     27-82-5. Anti-tying provisions.

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     (a) No person or business entity may offer any tangible personal property for sale or lease,

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or fix or vary the conditions of an offer, on a condition or requirement that the customer obtains

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insurance from the business entity, or any particular insurance producer or insurer.

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     (b) No business entity shall require or imply that the purchase of an insurance product from

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a business entity or any particular insurance producer or insurer, by a customer or prospective

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customer is required as a condition of, or is in any way related to the purchase or lease of any

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tangible personal property, the lending of money or extension of credit or the provision of services

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related to any of these activities.

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     (c) No business entity shall impose any requirement on any insurance producer or insurer

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who is not associated with the business entity that is not imposed on any insurance producer or

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insurer who is associated with that business entity.

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     27-82-6. Sales force.

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     Solicitation for the purchase or sale of insurance by a business entity shall be conducted

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only by persons licensed in accordance with chapter 2.4 of title 27 whose responsibilities do not

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include the sale of a noninsurance related tangible personal property, including, but not limited to,

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salespersons, persons whose responsibilities include a determination of credit qualification,

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financing, or persons assisting those individuals in the sale or lease of any tangible personal

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property.

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     27-82-7. Confidential customer information.

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     (a) As used in this section, unless the context requires otherwise:

 

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     (1) "Customer" means a person seeking to purchase or lease tangible personal property.

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     (2) "Nonpublic customer information" means personally identifiable financial

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information regarding a person that has been derived from the sale or lease of tangible personal

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property by a business entity, including, information on the product to be purchased or leased,

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information concerning the terms and conditions of insurance coverage, insurance expirations,

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insurance claims, or insurance history of an individual. Nonpublic customer information does not

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include customer names, addresses or telephone numbers.

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     (b) No business entity shall use any nonpublic customer information derived from the sale

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or lease of tangible personal property for the purpose of selling or soliciting the purchase of

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insurance or provide the nonpublic customer information to a third party for the purpose of

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another's sale or solicitation of the purchase of insurance.

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     27-82-8. Insurance in connection with the sale or lease of a tangible personal property.

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     The transaction of a sale or lease of any tangible personal property and insurance

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transactions shall be completed independently and through separate documents.

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     27-82-9. Physical location of insurance activities.

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     The place of solicitation or sale of insurance by any insurance company or any insurance

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producer affiliated with a business entity shall be from an office physically separated from the

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activities associated with the sale or lease of any tangible personal property. Physical separation

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shall not be defined as a separate building. The director shall have the authority to promulgate rules

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and regulations to implement this section pursuant to § 27-82-4.

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     27-82-10. Penalties.

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     Any business entity or person who violates the provisions of this chapter, who fails to

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perform any duties imposed by this chapter, or who violates any administrative regulation

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promulgated pursuant to this chapter shall be liable for a civil penalty not to exceed the sum of one

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hundred dollars ($100) for each day which the violation continues, and may be concurrently

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enjoined from any further violations by the superior court upon petition of the director.

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     SECTION 2. This act shall take effect on January 1, 2021.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO INSURANCE -- INSURANCE CONSUMER PROTECTION SALES ACT

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     This act would prevent anti-tying where an individual or business would not be able to

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offer and/or sell tangible property based on a conditional requirement that said consumer purchase

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insurance from the individual or business. Additionally, this act would prohibit businesses from

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using any non-public information from the purchase or lease of tangible personal products for the

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purpose of selling insurance. This act would impose a one hundred dollar ($100) civil fine for a

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violation.

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     This act would take effect on January 1, 2021.

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