In this subtitle the following words have the meanings indicated. “Covered customer” means a customer who elects to purchase coverage under a policy of portable electronics insurance issued to a vendor. “Customer” means a person who purchases or leases portable electronics or purchases service related to the use of portable electronics. “Location” means: a physical location in the State; or a website, call center site, or similar location where coverage under a policy of portable electronics insurance is offered or sold to residents of the State. “Portable electronics” means: an electronic device, including its accessories, that: is easily or conveniently transported by hand by an individual; and is used for communication, viewing, listening, recording, gaming, computing, or global positioning; and any other electronic device that is portable in nature that the Commissioner approves. “Portable electronics” includes: cellular or satellite phones; pagers; personal global positioning satellite units; portable computers; portable audio listening, video viewing, or recording devices; digital cameras; video camcorders; portable gaming systems; docking stations; and automatic answering devices. “Portable electronics” does not include telecommunications switching equipment, transmission wires, cell site transceiver equipment, or other equipment and systems used by telecommunications companies to provide telecommunications service to consumers. “Portable electronics insurance” means insurance that provides coverage for the repair or replacement of portable electronics, including coverage against one or more of the following causes of loss: loss by disappearance; theft; mechanical failure; malfunction; damage; and any other applicable peril, as approved by the Commissioner. “Portable electronics insurance” does not include: a service contract governed by Title 14, Subtitle 4 of the Commercial Law Article that does not include coverage for loss by disappearance or theft; a policy of insurance covering a seller’s or a manufacturer’s obligations under a warranty; or a homeowner’s, renter’s, motor vehicle, or similar policy that covers loss or theft of portable electronics. “Portable electronics transaction” means: the sale or lease of portable electronics by a vendor to a customer; or the sale of service related to the use of portable electronics by a vendor to a customer. “Supervising entity” means a business entity that is: an authorized insurer; or a licensed insurance producer that is appointed by an insurer to supervise the administration of a portable electronics insurance program. “Vendor” means a person in the business of leasing, selling, or providing portable electronics, or selling or providing service related to the use of portable electronics, to customers in the State.

This subtitle does not apply to: a service contract governed by Title 14, Subtitle 4 of the Commercial Law Article that does not include coverage for loss by disappearance or theft; a policy of insurance covering a seller’s or a manufacturer’s obligations under a warranty; or a homeowner’s, renter’s, motor vehicle, or similar policy that covers loss or theft of portable electronics.

A vendor shall hold a limited lines license to sell coverage under a policy of portable electronics insurance before the vendor or the employees of or authorized representatives of the vendor may sell or offer to sell coverage under a policy of portable electronics insurance to a customer. A limited lines license issued under this subtitle shall also authorize any salaried or hourly employee or authorized representative of the vendor to sell coverage under a policy of portable electronics insurance to a customer only if the employee or authorized representative is: trained under § 10–705 of this subtitle to act on behalf of the vendor; and acting under the supervision of the vendor. The acts of an employee or authorized representative offering to sell or selling coverage under a policy of portable electronics insurance shall be deemed the acts of the vendor for the purposes of this subtitle. A vendor may bill and collect premiums from covered customers for coverage under a policy of portable electronics insurance. A vendor that bills and collects premiums under this section is not required to maintain the premiums collected in a segregated account if: the vendor’s appointing insurer agrees in writing that segregation of funds is not required; the vendor remits the funds collected to the appointing insurer or that insurer’s appointed insurance producer within 60 days after receipt; and the funds received by the vendor from a covered customer for the sale of portable electronics insurance are held in trust by the vendor in a fiduciary capacity for the benefit of the vendor’s appointing insurer. Except as provided in subparagraph (ii) of this paragraph, the premiums for coverage under a policy of portable electronics insurance shall be separately itemized from the charges for the purchase or lease of the portable electronics. If portable electronics insurance coverage is included in the price of the purchase or lease of portable electronics or related services, the vendor shall provide clear and conspicuous written notice to the customer that the portable electronics insurance coverage is included with the portable electronics or related services. A vendor may receive compensation for billing and collection services under a policy of portable electronics insurance. A vendor or an authorized representative of the vendor may compensate the employees of the vendor or of the authorized representative in a manner that does not depend solely on the sale of portable electronics insurance.

The Commissioner shall issue to a vendor a limited lines license authorizing the vendor to sell or offer to sell coverage under a policy of portable electronics insurance to a customer if the vendor: meets the requirements of § 10–705 of this subtitle; pays the fees for insurance producers required under § 2–112 of this article that are applicable to an insurance producer license; and submits to the Commissioner a sworn application for a limited lines license under this subtitle on the form required by the Commissioner. Subject to paragraph (2) of this subsection, a vendor shall provide the name, residence address, and any other information required by the Commissioner for an officer or employee of the vendor who is designated by the vendor as the person responsible for the vendor’s compliance with the requirements of this subtitle. If the vendor derived more the 25% of its total revenue in the preceding year from the sale of portable electronics insurance, the vendor shall provide the information required in paragraph (1) of this subsection for all officers, directors, and shareholders of record under the federal securities law. The supervising entity shall maintain a registry of all vendor locations that are authorized to sell or offer portable electronics insurance coverage in the State. On request by the Commissioner, the registry shall be open to inspection and examination no later than 10 days after the request. A limited lines license under this subtitle is subject to the same term and renewal conditions that are specified for an insurance producer license under § 10–115 of this title.

A limited lines license to offer or sell coverage under a policy of portable electronics insurance to a customer issued under this subtitle authorizes a vendor or an authorized representative of the vendor to sell coverage under a policy of portable electronics insurance to customers at each location at which the vendor engages in portable electronics transactions in the State if: the portable electronics insurance policies have been filed with and approved by the Commissioner; the vendor holds an appointment under § 10–118 of this title with each authorized insurer that the vendor intends to represent; at each location where coverage under a policy of portable electronics insurance is offered or sold to customers, the vendor provides to the customers disclosures approved by the Commissioner that: summarize the material terms of the coverage under the policy of portable electronics insurance including: the identity of the insurer; the premium to be paid; any applicable deductible; the major features of the benefits of the coverage; and the key terms and conditions of coverage including whether the portable electronics may be repaired or replaced with similar make and model reconditioned or nonoriginal manufacturer parts or equipment; state that portable electronics insurance may duplicate insurance coverage already provided by a customer’s homeowner’s insurance policy, renter’s insurance policy, or other source of insurance coverage; and state that the purchase of coverage under a policy of portable electronics insurance would make this coverage primary to any other coverage, including duplicate coverage; state that the purchase of coverage under a policy of portable electronics insurance is not required in order to enter into the portable electronics transaction; describe the process for filing a claim if the customer elects to purchase coverage under a policy of portable electronics insurance including a description of: any requirement to pay a deductible; any requirement to return portable electronics; the maximum fee applicable if the customer fails to comply with a return requirement; and any requirement to file a proof of loss; state that: the customer may cancel coverage under the portable electronics insurance at any time; and if the customer cancels coverage under the portable electronics insurance, any unearned premium will be refunded to the person paying the premium in accordance with applicable law; and provide the toll–free consumer hotline telephone number of the Administration; and the vendor provides a training program, approved by the Commissioner, for any employee or authorized representative who sells coverage under a policy of portable electronics insurance to customers under this subtitle that includes instruction: about the portable electronics insurance offered to customers of the vendor; that the employee or authorized representative may not represent or imply to a customer that purchase of coverage under a policy of portable electronics insurance is required in order to purchase portable electronics; that portable electronics insurance may duplicate insurance coverage already provided by a customer’s homeowner’s insurance policy, renter’s insurance policy, or other source of insurance coverage; and about the other disclosures required by item (3) of this subsection. The training required under subsection (a)(4) of this section may be provided in electronic form. If training is conducted in electronic form, the supervising entity shall implement a supplemental education program about the portable electronics insurance product that is conducted and overseen by licensed insurance producers employed by the supervising entity.

Coverage under a policy of portable electronics insurance sold under this subtitle is primary to any other valid and collectible coverage.

The Commissioner may suspend, revoke, or refuse to renew a limited lines license issued under this subtitle after notice and opportunity for a hearing under Title 2, Subtitle 2 of this article if the vendor or an employee or authorized representative of the vendor has: willfully violated this article or another law of the State that relates to insurance; operated without a limited lines license as required under this subtitle; failed to provide the disclosures required under § 10–705 of this subtitle; offered or sold unapproved insurance products; failed to hold an appointment with an insurer; failed to train employees or authorized representatives as required under § 10–705 of this subtitle; or misrepresented pertinent facts or policy provisions concerning a policy of portable electronics insurance. A vendor and the employees and authorized representatives of the vendor may not advertise, represent, or otherwise hold themselves out as an authorized insurer or as an insurance producer for any kind or subdivision of insurance, except as provided in this subtitle. Instead of, or in addition to, suspending or revoking a limited lines license issued under this subtitle, the Commissioner may: impose on the vendor a penalty of not more than $2,500 for each violation of this subtitle; and require that restitution be made to any person who has suffered financial injury because of a violation of this subtitle.

The Commissioner may adopt regulations to carry out this subtitle, including regulations concerning: the form and content of required disclosures to customers; the training requirements for employees and authorized representatives of vendors; and the qualifications of the individuals who provide training.