2020 -- S 2391 | |
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LC004461 | |
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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 | |
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Introduced By: Senator Mark P. McKenney | |
Date Introduced: February 13, 2020 | |
Referred To: Senate Commerce | |
It is enacted by the General Assembly as follows: | |
1 | SECTION 1. Title 27 of the General Laws entitled "INSURANCE" is hereby amended by |
2 | adding thereto the following chapter: |
3 | CHAPTER 82 |
4 | INSURANCE CONSUMER PROTECTION SALES ACT |
5 | 27-82-1. Short title. |
6 | This chapter shall be known and may be cited as the "Insurance Consumer Protection Sales |
7 | Act." |
8 | 27-82-2. Purpose. |
9 | The purpose of this chapter is to regulate noninsurance business entities in the disclosure |
10 | of personal identifiable information for insurance sales. |
11 | 27-82-3. Definitions. |
12 | For the purposes of this chapter: |
13 | (1) "Business entity" means an individual, firm, corporation, business trust, association, |
14 | partnership, limited liability company, limited liability partnership or any legal entity, its affiliates |
15 | or subsidiaries and any of its officers, agents, representatives or employees; provided, however, |
16 | "business entity" shall not include financial institutions as defined and subject to the provisions of |
17 | chapter 58 of title 27. |
18 | (2) "Director" means the director of the department of business regulation or their designee. |
19 | (3) "Insurance" includes all products defined or regulated as insurance by the department |
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1 | of business regulation except those products offered as follows: |
2 | (i) Portable electronics insurance as defined in § 27-2.7-1; |
3 | (ii) Credit life, credit accident and health, credit involuntary unemployment insurance; |
4 | group credit insurance, forced placed or voluntary credit personal property insurance; group |
5 | mortgage cancellation life insurance, or group mortgage accident and health insurance and |
6 | annuities; |
7 | (iii) Insurance placed by a financial institution in connection with collateral pledged as |
8 | security for a loan when the debtor breaches the contractual obligation to provide that insurance; |
9 | and |
10 | (iv) Private mortgage insurance. |
11 | 27-82-4. Authorization for implementing regulations. |
12 | The director may promulgate administrative regulations to effectuate the purposes of this |
13 | chapter. |
14 | 27-82-5. Anti-tying provisions. |
15 | (a) No person or business entity may offer any tangible personal property for sale or lease, |
16 | or fix or vary the conditions of an offer, on a condition or requirement that the customer obtains |
17 | insurance from the business entity, or any particular insurance producer or insurer. |
18 | (b) No business entity shall require or imply that the purchase of an insurance product from |
19 | a business entity or any particular insurance producer or insurer, by a customer or prospective |
20 | customer is required as a condition of, or is in any way related to the purchase or lease of any |
21 | tangible personal property, the lending of money or extension of credit or the provision of services |
22 | related to any of these activities. |
23 | (c) No business entity shall impose any requirement on any insurance producer or insurer |
24 | who is not associated with the business entity that is not imposed on any insurance producer or |
25 | insurer who is associated with that business entity. |
26 | 27-82-6. Sales force. |
27 | Solicitation for the purchase or sale of insurance by a business entity shall be conducted |
28 | only by persons licensed in accordance with chapter 2.4 of title 27 whose responsibilities do not |
29 | include the sale of a noninsurance related tangible personal property, including, but not limited to, |
30 | salespersons, persons whose responsibilities include a determination of credit qualification, |
31 | financing, or persons assisting those individuals in the sale or lease of any tangible personal |
32 | property. |
33 | 27-82-7. Confidential customer information. |
34 | (a) As used in this section, unless the context requires otherwise: |
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1 | (1) "Customer" means a person seeking to purchase or lease tangible personal property. |
2 | (2) "Nonpublic customer information" means personally identifiable financial |
3 | information regarding a person that has been derived from the sale or lease of tangible personal |
4 | property by a business entity, including, information on the product to be purchased or leased, |
5 | information concerning the terms and conditions of insurance coverage, insurance expirations, |
6 | insurance claims, or insurance history of an individual. Nonpublic customer information does not |
7 | include customer names, addresses or telephone numbers. |
8 | (b) No business entity shall use any nonpublic customer information derived from the sale |
9 | or lease of tangible personal property for the purpose of selling or soliciting the purchase of |
10 | insurance or provide the nonpublic customer information to a third party for the purpose of |
11 | another's sale or solicitation of the purchase of insurance. |
12 | 27-82-8. Insurance in connection with the sale or lease of a tangible personal property. |
13 | The transaction of a sale or lease of any tangible personal property and insurance |
14 | transactions shall be completed independently and through separate documents. |
15 | 27-82-9. Physical location of insurance activities. |
16 | The place of solicitation or sale of insurance by any insurance company or any insurance |
17 | producer affiliated with a business entity shall be from an office physically separated from the |
18 | activities associated with the sale or lease of any tangible personal property. Physical separation |
19 | shall not be defined as a separate building. The director shall have the authority to promulgate rules |
20 | and regulations to implement this section pursuant to § 27-82-4. |
21 | 27-82-10. Penalties. |
22 | Any business entity or person who violates the provisions of this chapter, who fails to |
23 | perform any duties imposed by this chapter, or who violates any administrative regulation |
24 | promulgated pursuant to this chapter shall be liable for a civil penalty not to exceed the sum of one |
25 | hundred dollars ($100) for each day which the violation continues, and may be concurrently |
26 | enjoined from any further violations by the superior court upon petition of the director. |
27 | 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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1 | This act would prevent anti-tying where an individual or business would not be able to |
2 | offer and/or sell tangible property based on a conditional requirement that said consumer purchase |
3 | insurance from the individual or business. Additionally, this act would prohibit businesses from |
4 | using any non-public information from the purchase or lease of tangible personal products for the |
5 | purpose of selling insurance. This act would impose a one hundred dollar ($100) civil fine for a |
6 | violation. |
7 | This act would take effect on January 1, 2021. |
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