As Reported by the Senate Insurance, Commerce and Labor Committee

129th General Assembly Regular Session 2011-2012

Sub. H. B. No. 250

Representative Hackett 

Cosponsors: Representatives Grossman, Stebelton, Beck, Letson, Antonio, Boose, Brenner, Fedor, Foley, Garland, Gerberry, Goyal, Heard, Luckie, Mallory, Phillips, Slaby 

Senator Beagle 

---

A BILL

To amend sections 3903.42, 3905.01, 3905.06, and

1

3905.40 and to enact section 3905.062 of the

2

Revised Code to establish requirements and

3

procedures for issuing portable electronics

4

insurance and to revise the order of distribution

5

of claims from an insurer's estate as it relates

6

to interest on the claim.

7

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1.  That sections 3903.42, 3905.01, 3905.06, and	8
3905.40 be amended and section 3905.062 of the Revised Code be	9
enacted to read as follows:	10

Sec. 3903.42.  The priority of distribution of claims from	11
the insurer's estate shall be in accordance with the order in	12
which each class of claims is set forth in this section. Every	13
claim in each class shall be paid in full or adequate funds	14
retained for such payment before the members of the next class	15
receive any payment. No subclasses shall be established within any	16
class. The order of distribution of claims shall be:	17

(A) Class 1. The costs and expenses of administration,	18
including but not limited to the following:	19

(1) The actual and necessary costs of preserving or	20
recovering the assets of the insurer;	21

(2) Compensation for all services rendered in the	22
liquidation;	23

(3) Any necessary filing fees;

24

(4) The fees and mileage payable to witnesses;

25

(5) Reasonable attorney's fees;

26

(6) The reasonable expenses of a guaranty association or	27
foreign guaranty association in handling claims.	28

(B) Class 2. All claims under policies for losses incurred,	29
including third party claims, all claims of contracted providers	30
against a medicaid health insuring corporation for covered health	31
care services provided to medicaid recipients, all claims against	32
the insurer for liability for bodily injury or for injury to or	33
destruction of tangible property that are not under policies, and	34
all claims of a guaranty association or foreign guaranty	35
association. All claims under life insurance and annuity policies,	36
whether for death proceeds, annuity proceeds, or investment	37
values, shall be treated as loss claims. That portion of any loss,	38
indemnification for which is provided by other benefits or	39
advantages recovered by the claimant, shall not be included in	40
this class, other than benefits or advantages recovered or	41
recoverable in discharge of familial obligations of support or by	42
way of succession at death or as proceeds of life insurance, or as	43
gratuities. No payment by an employer to an employee shall be	44
treated as a gratuity. Claims under nonassessable policies for	45
unearned premium or other premium refunds.	46

(C) Class 3. Claims of the federal government.

47

(D) Class 4. Debts due to employees for services performed to	48
the extent that they do not exceed one thousand dollars and	49
represent payment for services performed within one year before	50
the filing of the complaint for liquidation. Officers and	51
directors shall not be entitled to the benefit of this priority.	52
Such priority shall be in lieu of any other similar priority that	53
may be authorized by law as to wages or compensation of employees.	54

(E) Class 5. Claims of general creditors.

55

(F) Class 6. Claims of any state or local government. Claims,	56
including those of any state or local governmental body for a	57
penalty or forfeiture, shall be allowed in this class only to the	58
extent of the pecuniary loss sustained from the act, transaction,	59
or proceeding out of which the penalty or forfeiture arose, with	60
reasonable and actual costs occasioned thereby. The remainder of	61
such claims shall be postponed to the class of claims under	62
division (I)(J) of this section.	63

(G) Class 7. Claims filed late or any other claims other than	64
claims under divisions (H) and, (I), and (J) of this section.	65

(H) Class 8. Surplus or contribution notes, or similar	66
obligations, and premium refunds on assessable policies. Payments	67
to members of domestic mutual insurance companies shall be limited	68
in accordance with law.	69

(I) Class 9. Interest at the legal rate compounded annually	70
on all claims in the classes prescribed in divisions (A) to (H) of	71
this section, except for claims of the federal government, from	72
the date of the order for liquidation or the date on which the	73
claim becomes due, whichever is later, until the date on which the	74
interest or dividend is declared, according to the terms of a plan	75
proposed by the liquidator and approved by the court supervising	76
the liquidation. The liquidator, with the approval of the court,	77
may make reasonable approximate computations of interest to be	78
paid under this division.	79

(J) Class 10. The claims of shareholders or other owners.

80

If any provision of this section or the application of any	81
provision of this section to any person or circumstance is held	82
invalid, the invalidity does not affect other provisions or	83
applications of this section, and to this end the provisions are	84
severable.	85

(J)(K) As used in sections 3903.42 and 3903.421 of the	86
Revised Code, "contracted provider" and "medicaid recipient" have	87
the same meanings as in secionsection 3903.14 of the Revised	88
Code.	89

Sec. 3905.01.  As used in this chapter:

90

(A) "Business entity" means a corporation, association,	91
partnership, limited liability company, limited liability	92
partnership, or other legal entity.	93

(B) "Home state" means the state or territory of the United	94
States, including the District of Columbia, in which an insurance	95
agent maintains the insurance agent's principal place of residence	96
or principal place of business and is licensed to act as an	97
insurance agent.	98

(C) "Insurance" means any of the lines of authority set forth	99
in Chapter 1739., 1751., or 1761. or Title XXXIX of the Revised	100
Code, or as additionally determined by the superintendent of	101
insurance.	102

(D) "Insurance agent" or "agent" means any person that, in	103
order to sell, solicit, or negotiate insurance, is required to be	104
licensed under the laws of this state, including limited lines	105
insurance agents and surplus line brokers.	106

(E) "Insurer" has the same meaning as in section 3901.32 of	107
the Revised Code.	108

(F) "License" means the authority issued by the	109
superintendent to a person to act as an insurance agent for the	110
lines of authority specified, but that does not create any actual,	111
apparent, or inherent authority in the person to represent or	112
commit an insurer.	113

(G) "Limited line credit insurance" means credit life, credit	114
disability, credit property, credit unemployment, involuntary	115
unemployment, mortgage life, mortgage guaranty, mortgage	116
disability, guaranteed automobile protection insurance, or any	117
other form of insurance offered in connection with an extension of	118
credit that is limited to partially or wholly extinguishing that	119
credit obligation and that is designated by the superintendent as	120
limited line credit insurance.	121

(H) "Limited line credit insurance agent" means a person that	122
sells, solicits, or negotiates one or more forms of limited line	123
credit insurance to individuals through a master, corporate,	124
group, or individual policy.	125

(I) "Limited lines insurance" means those lines of authority	126
set forth in divisions (B)(7) to (10)(11) of section 3905.06 of	127
the Revised Code or in rules adopted by the superintendent, or any	128
lines of authority the superintendent considers necessary to	129
recognize for purposes of complying with section 3905.072 of the	130
Revised Code.	131

(J) "Limited lines insurance agent" means a person authorized	132
by the superintendent to sell, solicit, or negotiate limited lines	133
insurance.	134

(K) "NAIC" means the national association of insurance	135
commissioners.	136

(L) "Negotiate" means to confer directly with, or offer	137
advice directly to, a purchaser or prospective purchaser of a	138
particular contract of insurance with respect to the substantive	139
benefits, terms, or conditions of the contract, provided the	140
person that is conferring or offering advice either sells	141
insurance or obtains insurance from insurers for purchasers.	142

(M) "Person" means an individual or a business entity.

143

(N) "Sell" means to exchange a contract of insurance by any	144
means, for money or its equivalent, on behalf of an insurer.	145

(O) "Solicit" means to attempt to sell insurance, or to ask	146
or urge a person to apply for a particular kind of insurance from	147
a particular insurer.	148

(P) "Superintendent" or "superintendent of insurance" means	149
the superintendent of insurance of this state.	150

(Q) "Terminate" means to cancel the relationship between an	151
insurance agent and the insurer or to terminate an insurance	152
agent's authority to transact insurance.	153

(R) "Uniform application" means the NAIC uniform application	154
for resident and nonresident agent licensing, as amended by the	155
NAIC from time to time.	156

(S) "Uniform business entity application" means the NAIC	157
uniform business entity application for resident and nonresident	158
business entities, as amended by the NAIC from time to time.	159

Sec. 3905.06. (A)(1) The superintendent of insurance shall	160
issue a resident insurance agent license to an individual	161
applicant whose home state is Ohio upon submission of a completed	162
application and payment of any applicable fee required under this	163
chapter, if the superintendent finds all of the following:	164

(a) The applicant is at least eighteen years of age.

165

(b) The applicant has not committed any act that is a ground	166
for the denial, suspension, or revocation of a license under	167
section 3905.14 of the Revised Code.	168

(c) If required under section 3905.04 of the Revised Code,	169
the applicant has completed a program of insurance education for	170
each line of authority for which the applicant has applied.	171

(d) If required under section 3905.04 of the Revised Code,	172
the applicant has passed an examination for each line of authority	173
for which the applicant has applied.	174

(e) Any applicant applying for variable life-variable annuity	175
line of authority is registered with the financial industry	176
regulatory authority (FINRA) as a registered representative after	177
having passed at least one of the following examinations	178
administered by the FINRA: the series 6 examination, the series 7	179
examination, the series 63 examination, the series 66 examination,	180
or any other FINRA examination approved by the superintendent.	181

(f) If required under section 3905.051 of the Revised Code,	182
the applicant has consented to a criminal records check and the	183
results of the applicant's criminal records check are determined	184
to be satisfactory by the superintendent.	185

(g) The applicant is a United States citizen or has provided	186
proof of having legal authorization to work in the United States.	187

(h) The applicant is of good reputation and character, is	188
honest and trustworthy, and is otherwise suitable to be licensed.	189

(2) The superintendent shall issue a resident insurance agent	190
license to a business entity applicant upon submission of a	191
completed application and payment of any applicable fees required	192
under this chapter if the superintendent finds all of the	193
following:	194

(a) TheExcept as provided under division (C)(2) of section	195
3905.062 of the Revised Code, the applicant either is domiciled in	196
Ohio or maintains its principal place of business in Ohio.	197

(b) The applicant has designated a licensed insurance agent	198
who will be responsible for the applicant's compliance with the	199
insurance laws of this state.	200

(c) The applicant has not committed any act that is a ground	201
for the denial, suspension, or revocation of a license under	202
section 3905.14 of the Revised Code.	203

(d) Any applicant applying for a portable electronics	204
insurance license line of authority satisfies the requirements of	205
division (C)(1) of section 3905.062 of the Revised Code.	206

(e) The applicant has submitted any other documents requested	207
by the superintendent.	208

(B) An insurance agent license issued pursuant to division	209
(A) of this section shall state the licensee's name, the license	210
number, the date of issuance, the date the license expires, the	211
line or lines of authority for which the licensee is qualified,	212
and any other information the superintendent deems necessary.	213

A licensee may be qualified for any of the following lines of	214
authority:	215

(1) Life, which is insurance coverage on human lives,	216
including benefits of endowment and annuities, and may include	217
benefits in the event of death or dismemberment by accident and	218
benefits for disability income;	219

(2) Accident and health, which is insurance coverage for	220
sickness, bodily injury, or accidental death, and may include	221
benefits for disability income;	222

(3) Property, which is insurance coverage for the direct or	223
consequential loss or damage to property of any kind;	224

(4) Casualty, which is insurance coverage against legal	225
liability, including coverage for death, injury, or disability or	226
damage to real or personal property;	227

(5) Personal lines, which is property and casualty insurance	228
coverage sold to individuals and families for noncommercial	229
purposes;	230

(6) Variable life and variable annuity products, which is	231
insurance coverage provided under variable life insurance	232
contracts and variable annuities;	233

(7) Credit, which is limited line credit insurance;

234

(8) Title, which is insurance coverage against loss or damage	235
suffered by reason of liens against, encumbrances upon, defects	236
in, or the unmarketability of, real property;	237

(9) Surety bail bond, which is the authority set forth in	238
sections 3905.83 to 3905.95 of the Revised Code;	239

(10) Portable electronics insurance, which is a limited line	240
described in section 3905.062 of the Revised Code;	241

(11) Any other line of authority designated by the	242
superintendent.	243

(C)(1) An individual seeking to renew a resident insurance	244
agent license shall apply biennially for a renewal of the license	245
on or before the last day of the licensee's birth month. A	246
business entity seeking to renew a resident insurance agent	247
license shall apply biennially for a renewal of the license on or	248
before the date determined by the superintendent. The	249
superintendent shall send a renewal notice to all licensees at	250
least one month prior to the renewal date.	251

Applications shall be submitted to the superintendent on	252
forms prescribed by the superintendent. Each application shall be	253
accompanied by a biennial renewal fee. The superintendent also may	254
require an applicant to submit any document reasonably necessary	255
to verify the information contained in the renewal application.	256

(2) To be eligible for renewal, an individual applicant shall	257
complete the continuing education requirements pursuant to section	258
3905.481 of the Revised Code prior to the renewal date.	259

(3) If an applicant submits a completed renewal application,	260
qualifies for renewal pursuant to divisions (C)(1) and (2) of this	261
section, and has not committed any act that is a ground for the	262
refusal to issue, suspension of, or revocation of a license under	263
section 3905.14 of the Revised Code, the superintendent shall	264
renew the applicant's resident insurance agent license.	265

(D) If an individual or business entity does not apply for	266
the renewal of the individual or business entity's license on or	267
before the license renewal date specified in division (C)(1) of	268
this section, the individual or business entity may submit a late	269
renewal application along with all applicable fees required under	270
this chapter prior to the first day of the second month following	271
the license renewal date.	272

(E) A license issued under this section that is not renewed	273
on or before its renewal date pursuant to division (C) of this	274
section or its late renewal date pursuant to division (D) of this	275
section automatically is suspended for nonrenewal on the first day	276
of the second month following the renewal date. If a license is	277
suspended for nonrenewal pursuant to this division, the individual	278
or business entity is eligible to apply for reinstatement of the	279
license within the twelve-month period following the date by which	280
the license should have been renewed by complying with the	281
reinstatement procedure established by the superintendent and	282
paying all applicable fees required under this chapter.	283

(F) A license that is suspended for nonrenewal that is not	284
reinstated pursuant to division (E) of this section automatically	285
is canceled unless the superintendent is investigating any	286
allegations of wrongdoing by the agent or has initiated	287
proceedings under Chapter 119. of the Revised Code. In that case,	288
the license automatically is canceled after the completion of the	289
investigation or proceedings unless the superintendent revokes the	290
license.	291

(G) An individual licensed as a resident insurance agent who	292
is unable to comply with the license renewal procedures	293
established under this section and who is unable to engage in the	294
business of insurance due to military service, a long-term medical	295
disability, or some other extenuating circumstance may request an	296
extension of the renewal date of the individual's license. To be	297
eligible for such an extension, the individual shall submit a	298
written request with supporting documentation to the	299
superintendent. At the superintendent's discretion, the	300
superintendent may not consider a written request made after the	301
renewal date of the license.	302

Sec. 3905.062.  (A) As used in this section:

303

(1) "Customer" means a person who purchases portable	304
electronics or services.	305

(2) "Enrolled customer" means a customer who elects coverage	306
under a portable electronics insurance policy issued to a vendor	307
of portable electronics by an insurer.	308

(3) "Endorsee" means an employee or authorized representative	309
of a vendor authorized to sell or offer portable electronics	310
insurance.	311

(4) "Location" means any physical location in this state or	312
any web site, call center site, or similar location directed to	313
residents of this state.	314

(5) "Portable electronics" means a personal, self-contained,	315
battery-operated electronic communication, viewing, listening,	316
recording, gaming, computing, or global positioning device that is	317
easily carried by an individual, including a cellular or satellite	318
telephone; pager; personal global positioning satellite unit;	319
portable computer; portable audio listening, video viewing or	320
recording device; digital camera; video camcorder; portable gaming	321
system; docking station; automatic answering device; and any other	322
similar device, and any accessory related to the use of the	323
device.	324

(6) "Portable electronics insurance" means insurance	325
providing coverage for the repair or replacement of portable	326
electronics, which may be offered on a month-to-month or other	327
periodic basis as a group or master commercial inland marine	328
policy issued to a vendor by an insurer, and may cover portable	329
electronics against loss, theft, inoperability due to mechanical	330
failure, malfunction, damage, or other applicable perils.	331
"Portable electronics insurance" does not mean any of the	332
following:	333

(a) A consumer goods service contract governed by section	334
3905.423 of the Revised Code;	335

(b) A policy of insurance covering a seller's or a	336
manufacturer's obligations under a warranty;	337

(c) A homeowner's, renter's, private passenger automobile,	338
commercial multi-peril, or similar insurance policy.	339

(7) "Portable electronics transaction" means the sale or	340
lease of portable electronics by a vendor to a customer or the	341
sale of a service related to the use of portable electronics by a	342
vendor to a customer.	343

(8) "Supervising entity" means an insurer or a business	344
entity licensed as an insurance agent under section 3905.06 of the	345
Revised Code that is appointed by an insurer to supervise the	346
administration of a portable electronics insurance program.	347

(9) "Vendor" means a person in the business of engaging in	348
portable electronics transactions directly or indirectly.	349

(B)(1) Except as provided in division (B)(2) of this section,	350
no vendor or vendor's employee shall offer, sell, solicit, or	351
place portable electronics insurance unless the vendor is licensed	352
under section 3905.06 or 3905.07 of the Revised Code with a	353
portable electronics insurance line of authority.	354

(2) Any vendor offering or selling portable electronics	355
insurance on or before the effective date of this section that	356
wishes to continue offering or selling that insurance shall apply	357
for a license within ninety days after the superintendent of	358
insurance makes the application available.	359

(C)(1) The superintendent shall issue a resident business	360
entity license to a vendor under section 3905.06 of the Revised	361
Code if the vendor satisfies the requirements of sections 3905.05	362
and 3905.06 of the Revised Code, except that the application for a	363
portable electronics insurance license shall satisfy the following	364
additional requirements:	365

(a) The application shall include the location of the	366
vendor's home office.	367

(b) If the application requires the vendor to designate an	368
individual or entity as a responsible insurance agent, that agent	369
shall not be required to be an employee of the applicant and may	370
be the supervising entity or an individual agent who is an	371
employee of the supervising entity.	372

(c) If the vendor derives less than fifty per cent of the	373
vendor's revenue from the sale of portable electronics insurance,	374
the application for a portable electronics insurance license may	375
require the vendor to provide the name, residence address, and	376
other information required by the superintendent for one employee	377
or officer of the vendor who is designated by the vendor as the	378
person responsible for the vendor's compliance with the	379
requirements of this chapter.	380

(d) If the vendor derives fifty per cent or more of the	381
vendor's revenue from the sale of portable electronics insurance,	382
the application may require the information listed under division	383
(C)(1)(c) of this section for all owners with at least ten per	384
cent interest or voting interest, partners, officers, and	385
directors of the vendor, or members or managers of a vendor that	386
is a limited liability company.	387

(2) The superintendent shall issue a nonresident business	388
entity license to a vendor if the vendor satisfies the	389
requirements of section 3905.07 of the Revised Code. However, if	390
the nonresident vendor's home state does not issue a limited lines	391
license for portable electronics insurance, the nonresident vendor	392
may apply for a resident license under section 3905.06 of the	393
Revised Code in the same manner and with the same rights and	394
privileges as if the vendor were a resident of this state.	395

(D) The holder of a limited lines license may not sell,	396
solicit, or negotiate insurance on behalf of any insurer unless	397
appointed to represent that insurer under section 3905.20 of the	398
Revised Code.	399

(E) Division (B)(34) of section 3905.14 of the Revised Code	400
shall not apply to portable electronics vendors or the vendors'	401
endorsees.	402

(F)(1) A vendor may authorize any endorsee of the vendor to	403
sell or offer portable electronics insurance to a customer at any	404
location at which the vendor engages in portable electronics	405
transactions.	406

(2) An endorsee is not required to be licensed as an	407
insurance agent under this chapter if the vendor is licensed under	408
this section and the insurer issuing the portable electronics	409
insurance either directly supervises or appoints a supervising	410
entity to supervise the administration of the portable electronics	411
insurance program including development of a training program for	412
endorsees in accordance with division (G) of this section.	413

(3) No endorsee shall do any of the following:

414

(a) Advertise, represent, or otherwise represent the	415
endorsee's self as an insurance agent licensed under section	416
3905.06 of the Revised Code;	417

(b) Offer, sell, or solicit the purchase of portable	418
electronics insurance except in conjunction with and incidental to	419
the sale or lease of portable electronics;	420

(c) Make any statement or engage in any conduct, express or	421
implied, that would lead a customer to believe any of the	422
following:	423

(i) That the insurance policies offered by the endorsee	424
provide coverage not already provided by a customer's homeowner's	425
insurance policy, renter's insurance policy, or by another source	426
of coverage;	427

(ii) That the purchase by the customer of portable	428
electronics insurance is required in order to purchase or lease	429
portable electronics or services from the portable electronics	430
vendor;	431

(iii) That the portable electronics vendor or its endorsees	432
are qualified to evaluate the adequacy of the customer's existing	433
insurance coverage.	434

(G) Each vendor, or the supervising entity to that vendor,	435
shall provide a training and education program for all endorsees	436
who sell or offer portable electronics insurance. The program may	437
be provided as a web-based training module or in any other	438
electronic or recorded video form. The training and education	439
program shall meet all of the following minimum standards:	440

(1) The training shall be delivered to each endorsee of each	441
vendor who sells or offers portable electronics insurance and the	442
endorsee shall complete the training;	443

(2) If the training is conducted in an electronic form, the	444
supervising entity shall implement a supplemental education	445
program regarding portable electronics insurance that is conducted	446
and overseen by employees of the supervising entity who are	447
licensed as insurance agents under section 3905.06 of the Revised	448
Code;	449

(3) The training and education program shall include basic	450
information about portable electronics insurance and information	451
concerning all of the following prohibited actions of endorsees:	452

(a) No endorsee shall advertise, represent, or otherwise	453
represent the endorsee's self as a licensed insurance agent.	454

(b) No endorsee shall offer, sell, or solicit the purchase of	455
portable electronics insurance except in conjunction with and	456
incidental to the sale or lease of portable electronics.	457

(c) No endorsee shall make any statement or engage in any	458
conduct, express or implied, that would lead a customer to believe	459
any of the following:	460

(i) That the insurance policies offered by the endorsee	461
provide coverage not already provided by a customer's homeowner's	462
insurance policy, renter's insurance policy, or by another source	463
of coverage;	464

(ii) That the purchase by the customer of portable	465
electronics insurance is required in order to purchase or lease	466
portable electronics or services from the portable electronics	467
vendor;	468

(iii) That the portable electronics vendor or its endorsees	469
are qualified to evaluate the adequacy of the customer's existing	470
insurance coverage.	471

(H) A supervising entity appointed to supervise the	472
administration of a portable electronics insurance program under	473
division (F)(2) of this section shall maintain a registry of	474
locations supervised by that entity that are authorized to sell or	475
solicit portable electronics insurance in this state. The	476
supervising entity shall make the registry available to the	477
superintendent upon request by the superintendent if the	478
superintendent provides ten days' notice to the vendor or	479
supervising entity.	480

(I) At every location where a vendor offers portable	481
electronics insurance to customers, the vendor shall provide	482
brochures or other written materials to prospective customers that	483
include all of the following:	484

(1) A summary of the material terms of the insurance	485
coverage, including all of the following:	486

(a) The identity of the insurer;

487

(b) The identity of the supervising entity;

488

(c) The amount of any applicable deductible and how it is to	489
be paid;	490

(d) Benefits of the coverage;

491

(e) Key terms and conditions of coverage such as whether	492
portable electronics may be replaced with a similar make and	493
model, replaced with a reconditioned device, or repaired with	494
nonoriginal manufacturer parts or equipment.	495

(2) A summary of the process for filing a claim, including a	496
description of how to return portable electronics equipment and	497
the maximum fee applicable if a customer fails to comply with any	498
equipment return requirements;	499

(3) A disclosure that portable electronics insurance may	500
provide a duplication of coverage already provided by a customer's	501
homeowner's insurance policy, renter's insurance policy, or other	502
source of coverage;	503

(4) A disclosure that the enrollment by the customer in a	504
portable electronics insurance program is not required to purchase	505
or lease portable electronics or services;	506

(5) A disclosure that neither the endorsee nor the vendor is	507
qualified to evaluate the adequacy of the customer's existing	508
insurance coverage;	509

(6) A disclosure that the customer may cancel enrollment for	510
coverage under a portable electronics insurance policy at any time	511
and receive a refund of any applicable premium.	512

(J)(1) The charges for portable electronics insurance may be	513
billed and collected by the vendor of portable electronics, and	514
the vendor may receive compensation for performing billing and	515
collection services, if either of the following conditions are	516
met:	517

(a) If the charge to the customer for coverage is not	518
included in the cost associated with the purchase or lease of	519
portable electronics or related services, the charge for coverage	520
is separately itemized on the customer's bill.	521

(b) If the charge to the customer for coverage is included in	522
the cost associated with the purchase or lease of portable	523
electronics or related services, the vendor clearly and	524
conspicuously discloses to the customer that the charge for	525
portable electronics insurance coverage is included with the	526
charge for portable electronics or related services.	527

(2) All funds received by a vendor from a customer for the	528
sale of portable electronics insurance shall be considered funds	529
held in trust by the vendor in a fiduciary capacity for the	530
benefit of the insurer. Vendors that bill and collect such charges	531
are not required to maintain those funds in a segregated account	532
if the vendor is authorized by the insurer to hold those funds in	533
an alternate manner and the vendor remits the amount of the	534
charges to the supervising entity within sixty days after	535
receiving the charges.	536

(K)(1) Except as otherwise provided in divisions (K)(2) and	537
(3) of this section, an insurer may terminate or otherwise change	538
the terms and conditions of a policy of portable electronics	539
insurance only upon providing the vendor policyholder and enrolled	540
customers with at least sixty days' prior notice. If the insurer	541
changes the terms and conditions, the insurer shall promptly	542
provide the vendor policyholder with a revised policy or	543
endorsement and each enrolled customer with a revised certificate,	544
endorsement, updated brochure, or other evidence indicating that a	545
change in the terms and conditions has occurred and a summary of	546
material changes.	547

(2) An insurer may terminate an enrolled customer's	548
enrollment under a portable electronics insurance policy upon	549
fifteen days' prior notice for discovery of fraud or material	550
misrepresentation in obtaining coverage or in the presentation of	551
a claim under the policy.	552

(3) An insurer may immediately terminate an enrolled	553
customer's enrollment under a portable electronics insurance	554
policy for any of the following reasons:	555

(a) The enrolled customer fails to pay the required premium;

556

(b) The enrolled customer ceases to have an active service	557
plan, if applicable, with the vendor of portable electronics;	558

(c) The enrolled customer exhausts the aggregate limit of	559
liability, if any, under the terms of the portable electronics	560
insurance policy and the insurer sends notice of termination to	561
the customer within thirty calendar days after exhaustion of the	562
limit. However, if the insurer does not send the notice within the	563
thirty-day time frame, enrollment shall continue notwithstanding	564
the aggregate limit of liability until the insurer sends notice of	565
termination to the enrolled customer.	566

(4) If a portable electronics insurance policy is terminated	567
by a vendor policyholder, the vendor policyholder shall provide	568
notice to each enrolled customer advising the customer of the	569
termination of the policy and the effective date of the	570
termination. The written notice shall be mailed or delivered to	571
the customer at least thirty days prior to the termination.	572

(5) Notice required pursuant to this section shall be	573
provided in writing, either via mail or by electronic means.	574

(a) If notice is provided via mail, it shall be mailed or	575
delivered to the vendor at the vendor's mailing address and to all	576
affected enrolled customers at the last known mailing addresses of	577
those customers on file with the insurer. The insurer or vendor of	578
portable electronics shall maintain proof of mailing in a form	579
authorized or accepted by the United States postal service or	580
other commercial mail delivery service.	581

(b) If notice is provided electronically, it shall be	582
transmitted via facsimile or electronic mail to the vendor at the	583
vendor's facsimile number or electronic mail address and to all	584
affected enrolled customers at the last known facsimile numbers or	585
electronic mail addresses of those customers on file with the	586
insurer. The insurer or vendor shall maintain proof that the	587
notice was sent.	588

(L) An enrolled customer may cancel the enrolled customer's	589
coverage under a portable electronics insurance policy at any	590
time. Upon cancellation, the insurer shall refund any applicable	591
unearned premium.	592

(M) A license issued pursuant to this section shall authorize	593
the vendor and its endorsees to engage only in those activities	594
that are expressly permitted by this section.	595

(N)(1) If a vendor or a vendor's endorsee violates any	596
provision of this section, the superintendent may revoke or	597
suspend the license issued or impose any other sanctions provided	598
under section 3905.14 of the Revised Code.	599

(2) If any provision of this section is violated by a vendor	600
or a vendor's endorsee at a particular location, the	601
superintendent may issue a cease and desist order to a particular	602
location, or take any other administrative action authorized in	603
section 3901.22 and division (D) of section 3905.14 of the Revised	604
Code.	605

(3) If any person violates division (B) or (F)(3) of this	606
section, the superintendent may issue a cease and desist order in	607
addition to taking any other administrative action provided for in	608
sections 3901.22 and division (D) of section 3905.14 of the	609
Revised Code.	610

(4) If the superintendent determines that a violation of this	611
section or section 3905.14 of the Revised Code has occurred, the	612
superintendent may assess a civil penalty in amount not exceeding	613
twenty-five thousand dollars per violation and an administrative	614
fee to cover the expenses incurred by the department in the	615
administrative action, including costs incurred in the	616
investigation and hearing process.	617

(O) The superintendent may adopt rules implementing this	618
section.	619

Sec. 3905.40.  There shall be paid to the superintendent of	620
insurance the following fees:	621

(A) Each insurance company doing business in this state shall	622
pay:	623

(1) For filing a copy of its charter or deed of settlement,	624
two hundred fifty dollars;	625

(2) For filing each statement, one hundred seventy-five	626
dollars;	627

(3) For each certificate of authority or license, one hundred	628
seventy-five, and for each certified copy thereof, five dollars;	629

(4) For each copy of a paper filed in the superintendent's	630
office, twenty cents per page;	631

(5) For issuing certificates of deposits or certified copies	632
thereof, five dollars for the first certificate or copy and one	633
dollar for each additional certificate or copy;	634

(6) For issuing certificates of compliance or certified	635
copies thereof, sixty dollars;	636

(7) For affixing the seal of office and certifying documents,	637
other than those enumerated herein, two dollars;	638

(8) For each agent appointment and each annual renewal of an	639
agent appointment, twenty dollars;	640

(9) For each termination of an agent appointment, five	641
dollars.	642

(B) Each domestic life insurance company doing business in	643
this state shall pay for annual valuation of its policies, one	644
cent on every one thousand dollars of insurance.	645

(C) Each applicant for licensure as an insurance agent except	646
applicants for licensure as surety bail bond agents and, surplus	647
line brokers, and portable electronics insurance vendors shall pay	648
ten dollars for each line of authority requested. Fees collected	649
under this division shall be credited to the department of	650
insurance operating fund created in section 3901.021 of the	651
Revised Code.	652

(D) Each domestic mutual life insurance company shall pay for	653
verifying that any amendment to its articles of incorporation was	654
regularly adopted, two hundred fifty dollars with each application	655
for verification. Any such amendment shall be considered to have	656
been regularly adopted when approved by the affirmative vote of	657
two-thirds of the policyholders present in person or by proxy at	658
any annual meeting of policyholders or at a special meeting of	659
policyholders called for that purpose.	660

(E) Each insurance agent doing business in this state shall	661
pay a biennial license renewal fee of twenty-five dollars, except	662
the following insurance agents are not required to pay thethat	663
license renewal fee:	664

(1) Individual resident agents who have met their continuing	665
education requirements under section 3905.481 of the Revised Code;	666

(2) Surety bail bond agents;

667

(3) Surplus line brokers;

668

(4) Portable electronics insurance vendors.

669

(F) Each applicant for licensure as a portable electronics	670
insurance vendor with a portable electronics insurance limited	671
lines license and each licensed vendor doing business in this	672
state shall pay the following fees prescribed by the	673
superintendent:	674

(1) For vendors engaged in portable electronic transactions	675
at more than ten locations in this state, an application fee not	676
to exceed five thousand dollars for an initial license and a	677
biennial license renewal fee not to exceed two thousand five	678
hundred dollars for each renewal thereafter;	679

(2) For vendors engaged in portable electronic transactions	680
at ten or fewer locations in this state, an application fee not to	681
exceed three thousand dollars for an initial license and a	682
biennial license renewal fee not to exceed one thousand dollars	683
for each renewal thereafter.	684

(G) All fees collected by the superintendent under this	685
section except any fees collected under divisions (A)(2), (3), and	686
(6) of this section shall be credited to the department of	687
insurance operating fund created under section 3901.021 of the	688
Revised Code.	689

Section 2.  That existing sections 3903.42, 3905.01, 3905.06,	690
and 3905.40 of the Revised Code are hereby repealed.	691