HSB 150 (LSB 2061YC (2) 89)

HOUSE FILE _____ 

BY  (PROPOSED COMMITTEE ON COMMERCE BILL BY CHAIRPERSON LUNDGREN)

A BILL FOR

An Act relating to self-service storage insurance, and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  522F.1  Definitions.
   As used in this chapter, unless the context otherwise requires:
   1.  “Commissioner” means the commissioner of insurance.
   2.  “Endorsee” means an employee or an authorized representative of an owner authorized to sell or offer self-service storage insurance at one or more of the owner’s locations.
   3.  “Financial institution” means any bank, savings and loan association, credit union, or other entity subject to Title XIII, subtitle 2.
   4.  “Insurance producer” means the same as defined in section 522B.1.
   5.  “Insurer” means the same as defined in section 522B.1.
   6.  “License” means the same as defined in section 522B.1.
   7.  “Limited lines producer” means the same as defined in section 522B.1. 
   8.  “Location” means any physical location in this state, or any internet site, call center site, or other location at which an owner engages in transactions related to a self-service storage facility located in this state.
   9.  “Occupant” means a person, or the person’s successors or assigns, entitled to the use of space at a self-service storage facility under a rental agreement.
   10.  “Owner” means a resident or a nonresident person that is the owner, operator, property management company, lessor, or sublessor of a self-service storage facility. “Owner” does not mean an occupant.
   11.  “Person” means the same as defined in section 522B.1.
   12.  “Personal property” means movable property not affixed to land, including goods, wares, merchandise, household items, and furnishings.
   13.  “Rental agreement” means any written agreement that establishes or modifies the terms or conditions concerning an occupant’s use of space at a self-service storage facility.
   14.  “Self-service storage facility” or “facility” means any real property used for the purpose of renting or leasing individual storage space to occupants who have access to the space for the purpose of storing personal property, but does not include a garage used primarily for storage of motor vehicles, or a repository at a financial institution used by the financial institution’s customers for storage of money or valuables. If an owner issues a warehouse receipt, bill of lading, or other document of title for an occupant’s personal property stored at the facility, the owner and the occupant are subject to chapter 554, article 7, and this chapter shall not apply.
   15.  “Self-service storage insurance” means insurance providing coverage for the loss of, or damage to, personal property that is contained in a storage space at a facility, or is in transit to or from the storage space, during the term of a rental agreement covering an occupant’s use of storage space at the facility.
   16.  “Sell” means the same as defined in section 522B.1.
   17.  “Solicit” means the same as defined in section 522B.1.
   18.  “Supervising entity” means a person licensed as an insurance producer under chapter 522B who is appointed by an insurer to supervise the administration of self-service storage insurance at an owner’s locations.
    Sec. 2.  NEW SECTION.  522F.2  License required.
   1.  Except as provided in subsection 2, an owner or endorsee shall not sell or solicit self-service storage insurance unless the owner is licensed pursuant to chapter 522B as a self-service storage insurance limited lines producer and the sale or solicitation of self-service storage insurance is in conjunction with and incidental to the rental of self-service storage to an occupant.
   2.  A license shall not be required for an owner, or an endorsee on behalf of an insurer, to display and provide promotional information regarding self-service storage insurance to occupants and prospective occupants.
   3.  Any owner or endorsee that has solicited or sold self-service storage insurance before July 1, 2021, shall obtain a self-service storage insurance limited lines producer license on or before October 1, 2021, or shall be prohibited from continuing to solicit or sell self-service storage insurance until licensed. Any owner or endorsee that begins to solicit or sell self-service storage insurance on or after July 1, 2021, shall obtain a self-service storage limited lines insurance producer license prior to soliciting or selling self-service storage insurance.
    Sec. 3.  NEW SECTION.  522F.3  Application for license —— requirements.
   1.  The commissioner shall issue a self-service storage insurance limited lines producer license to an owner pursuant to section 522B.6 or 522B.7 if the owner satisfies the applicable requirements of section 522B.5 and as part of the application for the license the owner provides all of the following information:
   a.  The physical address of the home office of the owner’s facility and the physical address and internet sites of all locations.
   b.  If less than fifty percent of the facility’s revenue is derived from the sale of self-service storage insurance, the owner shall provide the name, residential address, and any other information required by the commissioner for one employee or one authorized representative of the owner, or for one employee or one authorized representative of a supervising entity, designated as the person responsible for the owner’s compliance with the requirements of this chapter.
   c.  If fifty percent or more of the facility’s revenue is derived from the sale of self-service storage insurance, the owner shall provide the residential address and any other information required by the commissioner for all officers, directors, and shareholders of record that have ten percent or more beneficial ownership of the facility.
   2.  An owner applying for a self-service storage limited lines producer license shall be exempt from the examination requirements pursuant to section 522B.4 and section 522B.5, subsection 1, paragraph “d”.
   3.  An owner applying to renew a self-service storage limited lines producer license shall be exempt from the continuing education requirements pursuant to section 522B.6, subsection 3.
    Sec. 4.  NEW SECTION.  522F.4  Endorsees —— conditions and limitations.
   1.  An owner licensed pursuant to section 522F.3 may authorize endorsees to solicit, offer, or sell self-service storage insurance to occupants and prospective occupants at any location.
   2.  An endorsee shall not be required to be licensed as an insurance producer if all of the following requirements are met:
   a.  The endorsee is eighteen years of age or older.
   b.  The insurer issuing the self-service storage insurance either directly supervises, or appoints a supervising entity to supervise, the administration of the self-service storage insurance, including the development and implementation of a training program for endorsees pursuant to subsection 3.
   c.  The owner has filed an affidavit with the commissioner, in the form and manner required by the commissioner by rule, acknowledging that the owner is legally responsible for the actions of all endorsees relating to an endorsee’s solicitation or sale of self-service storage insurance in conjunction with and incidental to the rental of storage space to an occupant at any location.
   3.  An owner, or the supervising entity, shall provide a training program for all endorsees who solicit or sell self-service storage insurance. The training program shall meet all of the following requirements:
   a.  The training shall be delivered to each endorsee who sells or offers self-service storage insurance at any location. The owner, or the supervising entity, shall maintain documentation evidencing that each endorsee has completed the training. The documentation and all training materials shall be made available to the commissioner within five business days of the commissioner’s request to review the documentation or the training materials.
   b.  If the training is conducted in an electronic form, the supervising entity shall implement a supplemental education program regarding self-service storage insurance that is conducted and overseen by an employee of the supervising entity who is licensed as an insurance producer pursuant to chapter 522B.
   c.  The training program shall include basic information about self-service storage insurance and shall address all of the following:
   (1)  No endorsee shall advertise or otherwise represent the endorsee as a licensed insurance producer unless the endorsee holds a license.
   (2)  No endorsee shall solicit or sell self-service storage insurance except in conjunction with and incidental to the rental of storage space to an occupant at a location.
   4.  An endorsee shall not be paid directly by an insurer, and an owner shall not pay an endorsee commission or compensate an endorsee based primarily on the number of occupants the endorsee enrolls for self-service storage insurance. An owner may, however, include an endorsee’s performance related to soliciting or selling self-service storage insurance to occupants and prospective occupants in an overall performance incentive compensation program the owner offers for all endorsees.
    Sec. 5.  NEW SECTION.  522F.5  Registry of locations.
   The owner, or the supervising entity, shall maintain a registry of all of the owner’s locations and of all endorsees at each location that are authorized to sell or solicit self-service storage insurance. The owner, or the supervising entity, shall make the registry available to the commissioner within five business days of the commissioner’s request for the registry.
    Sec. 6.  NEW SECTION.  522F.6  Required documents and disclosures.
   1.  At any location where self-service storage insurance is offered to occupants or prospective occupants, written or electronic documents shall be available to the occupants or prospective occupants and must include all of the following:
   a.  The material terms of the self-service storage insurance coverage, or a summary of the material terms of the self-service storage insurance coverage, including all of the following:
   (1)  The identity of the insurer.
   (2)  The identity of the supervising entity, if applicable.
   (3)  All benefits provided by the coverage.
   (4)  The key terms and conditions of the coverage, including all exclusions.
   (5)  The amount of all deductibles and the process for paying a deductible.
   b.  A summary of the claims process.
   c.  A disclosure specifying that self-service storage insurance may be a duplication of coverage already provided by an occupant’s or prospective occupant’s homeowner’s insurance policy, renter’s insurance policy, or other source of insurance coverage.
   d.  A disclosure specifying that self-service storage insurance sold by the owner or an endorsee is not required as a condition of obtaining a rental agreement.
   e.  Any other disclosures specified by rule as adopted by the commissioner.
   2.  The written or electronic documents provided pursuant to subsection 1 shall not be subject to filing with, or be subject to the approval of, the commissioner.
    Sec. 7.  NEW SECTION.  522F.7  Authority conveyed by license.
   1.  All charges for self-service storage insurance on a master, corporate, group, or individual policy basis may be billed and collected by an owner or an endorsee, and the owner may receive compensation for performing billing and collection services if all of the following conditions are met:
   a.  If any charges for self-service storage insurance are not included in the costs associated with an occupant’s rental of self-service storage space, the owner shall itemize the charges for the self-service storage insurance separately on the occupant’s bill.
   b.  If any charges for self-service storage insurance are included in the costs associated with an occupant’s rental of self-service storage space, the owner shall clearly and conspicuously disclose that information to the occupant in writing.
   2.  All premiums received by an owner or endorsee from an occupant for self-service storage insurance shall be considered funds held by the owner in a fiduciary capacity for the benefit of the insurer that issues the self-service storage insurance. An owner that bills and collects such moneys shall not be required to maintain the moneys in a segregated account if any of the following apply:
   a.  The owner is authorized by the insurer to hold the funds in an alternate manner.
   b.  The owner remits the funds to the supervising entity as required by the supervising entity.
    Sec. 8.  NEW SECTION.  522F.8  License suspension, revocation, denial, nonrenewal.
   The commissioner may suspend, revoke, or refuse to issue or renew an owner’s limited lines self-service storage insurance producer license pursuant to section 522B.11.
    Sec. 9.  NEW SECTION.  522F.9  Rules.
   The commissioner shall adopt rules pursuant to chapter 17A as necessary to implement and administer this chapter.
    Sec. 10.  NEW SECTION.  522F.10  Enforcement.
   The commissioner may take any action within the commissioner’s authority to enforce compliance with this chapter.
    Sec. 11.  APPLICABILITY.  This Act applies to self-service storage insurance that is delivered, issued for delivery, continued, or renewed in this state on or after July 1, 2021.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to self-service storage insurance. The bill prohibits an owner or endorsee from soliciting or selling self-service storage insurance (insurance) unless the owner is licensed as a self-service storage insurance limited lines producer (limited lines producer) and the solicitation or sale of the insurance is in conjunction with or incidental to an occupant’s rental of storage space at a self-service storage facility (facility). “Self-service storage insurance” is defined in the bill as insurance providing coverage for the loss of, or damage to, personal property that is contained in a storage space at a facility, or is in transit to or from the storage space, during the term of a rental agreement covering an occupant’s use of storage space at the facility. A license is not required for an owner to display promotional information regarding insurance to occupants and prospective occupants. “Owner”, “endorsee”, “self-service storage facility”, “occupant”, “personal property”, and “rental agreement” are also defined in the bill.
   An owner or endorsee that has solicited or sold insurance before July 1, 2021, must obtain a limited lines producer license on or before October 1, 2021, to continue to solicit or sell insurance. Any owner or endorsee that begins to solicit or sell insurance on or after July 1, 2021, must obtain a limited lines producer license prior to soliciting or selling insurance. The application and licensing requirements for an owner to obtain a limited lines producer license, and the conditions and limitations imposed on endorsees, are contained in the bill.
   At any location where insurance is offered to occupants or prospective occupants, written or electronic documents must be available to the occupants or prospective occupants and must include the material terms of the insurance coverage as outlined in the bill. The documents are not subject to filing with, or requiring the approval of, the commissioner. The bill defines “location” as any physical location in this state, or any internet site, call center site, or other location at which an owner engages in transactions related to a facility located in this state.
   An endorsee cannot be paid directly by an insurer and an owner cannot pay an endorsee commission, or compensate an endorsee based primarily on the number of occupants the endorsee enrolls for insurance. An owner may, however, include an endorsee’s performance related to soliciting or selling insurance to occupants in an overall performance incentive compensation program the owner offers all endorsees.
   The bill allows all charges for insurance on a master, corporate, group, or individual basis to be billed and collected by the owner or an endorsee. The owner may receive compensation for performing billing and collection services if the owner itemizes the charges for the insurance separately on an occupant’s bill if any charges for the insurance are not included in the costs associated with the occupant’s rental of storage space; or the owner clearly and conspicuously discloses to the occupant that the charges for insurance are included with the storage space rental.
   All premiums received by an owner from an occupant for insurance must be considered funds held by the owner in a fiduciary capacity for the benefit of the insurer that issues the insurance. An owner that bills and collects such funds is not required to maintain the funds in a segregated account if the owner is authorized by the insurer to hold the funds in an alternate manner, or the owner remits the funds to a supervising entity as required by the supervising entity, if applicable. “Supervising entity” is defined in the bill as a person licensed as an insurance producer who is appointed by an insurer to supervise the administration of self-service storage insurance at an owner’s locations.
   The bill gave the commissioner the authority to suspend, revoke, or refuse to issue or renew an owner’s limited lines producer license. The commissioner must adopt rules as necessary to implement and administer the provisions of the bill, and may take any action within the commissioner’s authority to enforce compliance with the bill.
   The bill is applicable to self-service storage insurance that is delivered, issued for delivery, continued, or renewed in this state on or after July 1, 2021.