An Act To Establish Standards for Portable Electronic Device Insurance
Maine Legislature, Session 125, LD 1464
Committee: Insurance and Financial Services
Sponsors: SNOWE-MELLO, BRANNIGAN, BECK, GOODE, MORISSETTE, RICHARDSON
Amends: 24-A MRSA §601, 24-A MRSA §1420-F

Legislative Document 
No. 1464 
S.P. 455 
In Senate, April 12, 2011 
An Act To Establish Standards for Portable Electronic Device 
Insurance 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
JOSEPH G. CARLETON, JR. 
Secretary of the Senate 
Presented by Senator SNOWE-MELLO of Androscoggin. 
Cosponsored by Senator: BRANNIGAN of Cumberland, Representatives: BECK of 
Waterville, GOODE of Bangor, MORISSETTE of Winslow, RICHARDSON of Warren. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  24-A MRSA §601, sub-§29 is enacted to read: 
29.  Portable electronic device insurance vendor.  Portable electronic device 
insurance vendor licensing fees may not exceed: 
A.  Original license issuance fee, $1,000; and 
B.  Annual renewal fee, $500. 
Sec. 2.  24-A MRSA §1420-F, sub-§1, ¶K, as enacted by PL 2001, c. 259, §24, 
is amended to read: 
K.  Automobile mechanical breakdown contracts, which are a limited line; and 
Sec. 3.  24-A MRSA §1420-F, sub-§1, ¶L, as repealed and replaced by PL 2007, 
c. 51, §3, is amended to read: 
L.  Insurance offered, sold or solicited in connection with and incidental to the rental 
of rental cars for a period of no more than 60 days, whether at the rental office or by 
preselection of coverage in master, corporate, group or individual agreements, that is 
nontransferable, applies only to the rental car that is the subject of the rental 
agreement and is limited to the following kinds of insurance:   
(1)  Personal accident insurance for renters and other rental car occupants for 
accidental death or dismemberment and for medical expenses resulting from an 
accident that occurs with the rental car during the rental period; 
(2)  Liability insurance that provides protection to the renters and other 
authorized drivers of a rental car for liability arising from the operation or use of 
the rental car during the rental period; 
(3)  Personal effects insurance that provides coverage to renters and other vehicle 
occupants for loss of, or damage to, personal effects in the rental car during the 
rental period; 
(4)  Roadside assistance and emergency sickness protection insurance; and 
(5)  Any other coverage designated by the superintendent.; and 
Sec. 4.  24-A MRSA §1420-F, sub-§1, ¶M is enacted to read: 
M.  Vendor’s portable electronic device insurance, which is a limited line. 
Sec. 5.  24-A MRSA c. 89 is enacted to read: 
CHAPTER 89 
PORTABLE ELECTRONIC DEVICE INSURANCE 
§7001.  Definitions 
As used in this chapter, unless the context otherwise indicates, the following terms 
have the following meanings. 
1.  Customer.  "Customer" means a person who purchases a portable electronic 
device or service.  
2.  Enrolled customer.  "Enrolled customer" means a customer who elects coverage 
under a portable electronic device insurance policy issued to a vendor. 
3.  Portable electronic device.  "Portable electronic device" means an electronic 
device that is portable in nature, its accessories and services related to the use of the 
device. 
4.  Portable electronic device insurance.  "Portable electronic device insurance" 
means insurance authorized under section 705 providing coverage for the repair or 
replacement of a portable electronic device that may cover a portable electronic device 
against any one or more of the following causes of loss: loss, theft, mechanical failure, 
malfunction, damage or other applicable perils.  "Portable electronic device insurance" 
does not include: 
A.  A service contract governed by Title 11, Article 2; 
B.  A policy of insurance covering a seller's or a manufacturer's obligations under a 
warranty; or 
C.  Personal insurance, as defined in section 2169-B, subsection 1, paragraph H or 
any similar policy. 
5.  Portable electronic device transaction.  "Portable electronic device transaction" 
means: 
A.  The sale or lease of a portable electronic device by a vendor to a customer; or 
B.  The sale of a service related to the use of a portable electronic device by a vendor 
to a customer. 
6.  Supervising agency.  "Supervising agency" means a business entity that is a 
licensed insurance producer. 
7.  Vendor.  "Vendor" means a person in the business of engaging in portable 
electronic device transactions directly or indirectly. 
§7002.  Licensure of vendors 
1.  License required.  A vendor is required to hold a limited lines license pursuant to 
section 1420-F to sell or offer coverage under a policy of portable electronic device 
insurance. 
2.  Authority provided by license.  A limited lines license issued under this chapter 
authorizes any employee or authorized representative of a vendor to sell or offer coverage 
under a policy of portable electronic device insurance to a customer at each location at 
which the vendor engages in portable electronic device transactions. 
3.  List of locations.  In connection with a vendor's application for licensure and 
quarterly thereafter, the vendor shall provide a list to the superintendent of all locations in 
this State at which the vendor offers coverage.  
4.  Activities authorized by license.  Notwithstanding any other provision of law, a 
license issued pursuant to this chapter authorizes the licensee and its employees or 
authorized representatives to engage only in those activities that are expressly permitted 
in this chapter. 
§7003.  Requirements for sale of portable electronic device insurance 
1.  Brochures.  At every location where portable electronic device insurance is 
offered to customers, brochures or other written materials must be made available to a 
prospective customer that: 
A.  Disclose that portable electronic device insurance may provide a duplication of 
coverage already provided by a customer's homeowner's insurance policy, renter's 
insurance policy or other source of coverage;  
B.  State that the enrollment by the customer in a portable electronic device insurance 
policy is not required in order to purchase or lease a portable electronic device or 
service; 
C.  Summarize the material terms of the insurance coverage, including: 
(1)  The identity of the insurer; 
(2)  The identity of the supervising agency; 
(3)  The amount of any applicable deductible and how it is to be paid; 
(4)  Benefits of the coverage; and 
(5)  Key terms and conditions of coverage such as whether the portable electronic 
device may be replaced with a similar make and model or repaired using 
reconditioned or nonoriginal manufacturer parts or equipment; 
D.  Summarize the process for filing a claim, including a description of any 
requirements:  
(1)  To return the portable electronic device and the maximum fee applicable if 
the customer fails to comply with any equipment return requirements; and 
(2)  For proof of loss; and 
E.  State that the customer may cancel enrollment for coverage under a portable 
electronic device insurance policy at any time and receive a refund of any applicable 
premium.  
2.  Periodic basis of coverage.  Portable electronic device insurance may be offered 
on a month-to-month or other periodic basis as a group or inland marine policy issued to 
a vendor under which individual customers may elect to enroll for coverage. 
3.  Eligibility and underwriting standards.  Eligibility and underwriting standards 
for customers electing to enroll in coverage must be established by an insurer for each 
portable electronic device insurance policy. 
§7004.  Authority of vendors 
1.  Requirements for employees and authorized representatives of vendors.  An 
employee or authorized representative of a vendor may sell or offer portable electronic 
device insurance to a customer and is not subject to licensure as an insurance producer 
under this chapter if:  
A.  The vendor obtains a limited lines license to authorize its employees or authorized 
representatives to sell or offer portable electronic device insurance pursuant to this 
section; 
B.  The insurer issuing the portable electronic device insurance appoints a supervising 
agency to supervise the administration of the sale of insurance, including 
development of a training program for employees and authorized representatives of 
the vendors.  The training required by this paragraph must comply with the 
following: 
(1)  The training must be delivered to all employees and authorized 
representatives of the vendor who sell or offer portable electronic device 
insurance.  The training may be provided in electronic form.  If conducted in 
electronic form the supervising agency shall implement a program of in-person 
training conducted by licensed employees of the supervising agency to 
supplement the electronic training; and 
(2)  Each employee and authorized representative must receive basic instruction 
about the portable electronic device insurance offered to customers and the 
disclosures required under section 7003, subsection 1; and 
C.  The employee or authorized representative of the vendor does not advertise, 
represent or otherwise hold that employee or authorized representative out as a 
nonlimited lines licensed insurance producer.  
2.  Charges.  The charges for portable electronic device insurance coverage may be 
billed and collected by the vendor.  Any charge to the customer for coverage that is not 
included in the cost associated with the purchase or lease of a portable electronic device 
or related services must be separately itemized on the customer's bill.  If the charge for 
coverage is included in the cost associated with the purchase or lease of a portable 
electronic device or related services, the vendor shall clearly and conspicuously disclose 
to the customer that the charge for the portable electronic device or related services 
includes the charge for coverage.  A vendor billing and collecting charges for coverage is 
not required to maintain those funds in a segregated account as long as the vendor is 
authorized by the insurer to hold such funds in an alternative manner and remits the funds 
to the supervising agency within 60 days of receipt.  All funds received by a vendor from 
a customer for the sale of portable electronic device insurance are considered funds held 
in trust by the vendor in a fiduciary capacity for the benefit of the insurer.  A vendor may 
receive compensation for billing and collection services.  
§7005.  Violations 
1.  Penalties.  If a vendor or its employee or authorized representative violates any 
provision of this chapter, the superintendent may: 
A.  After notice and hearing, impose fines not to exceed $500 per violation or $5,000 
in the aggregate for such conduct; and 
B.  After notice and hearing, impose other penalties that the superintendent considers 
necessary and reasonable to carry out the purpose of this chapter, including:  
(1)  Suspending the authority for transacting portable electronic device insurance 
pursuant to this chapter at specific business locations where violations have 
occurred; and 
(2)  Suspending or revoking the authority for an individual employee or 
authorized representative of a vendor to act under the license under section 7002. 
§7006.  Termination of portable electronic device insurance 
1.  Notice.  Notwithstanding any other provision of law, an insurer may terminate or 
otherwise change the terms and conditions of a policy of portable electronic device 
insurance only upon providing the vendor policyholder and enrolled customers with at 
least 60 days' notice. 
2.  Revised documents.  Notwithstanding any other provision of law, if the insurer 
changes the terms and conditions of a policy of portable electronic device insurance, the 
insurer shall provide the vendor policyholder with a revised policy or endorsement and 
each enrolled customer with a revised certificate or endorsement, an updated brochure or 
other evidence indicating that a change in the terms and conditions has occurred and a 
summary of material changes. 
3.  Notice in case of fraud or material misrepresentation.  Notwithstanding 
subsection 1 or any other provision of law, an insurer may upon 15 days' notice terminate 
an enrolled customer's enrollment under a portable electronic device insurance policy for 
discovery of fraud or material misrepresentation in obtaining coverage or in the 
presentation of a claim thereunder.  
4.  Immediate termination of enrollment allowed.  Notwithstanding subsection 1 or 
any other provision of law, an insurer may immediately terminate an enrolled customer's 
enrollment under a portable electronic device insurance policy: 
A.  For nonpayment of premium; 
B.  If the enrolled customer ceases to have an active service with the vendor; or 
C.  If an enrolled customer exhausts the aggregate limit of liability, if any, under the 
terms of the portable electronic device insurance policy and the insurer sends notice 
of termination to the customer within 30 calendar days after exhaustion of the limit.  
If this notice is not timely sent, enrollment must continue notwithstanding the 
aggregate limit of liability until the insurer sends notice of termination to the enrolled 
customer. 
5.  Policy terminated by vendor policyholder.  Notwithstanding any other provision 
of law, when a portable electronic device insurance policy is terminated by a vendor 
policyholder, the vendor policyholder shall mail or deliver written notice to each enrolled 
customer advising the customer of the termination of the policy and the effective date of 
termination.  The written notice must be mailed or delivered to the customer at least 30 
days prior to the termination. 
6.  Method of notice.  Notwithstanding any other provision of law, whenever notice 
is required pursuant to this section, it must be in writing and may be mailed or delivered 
to the vendor at the vendor's mailing address and to the vendor's affected enrolled 
customers at the last known mailing addresses on file with the insurer.  If notice is 
mailed, the insurer or vendor, as the case may be, shall maintain proof of mailing in a 
form authorized or accepted by the United States Postal Service or other commercial mail 
delivery service.  Alternatively, an insurer or vendor policyholder may comply with any 
notice required by this section by providing notice to a vendor or its affected enrolled 
customers, as the case may be, by electronic means.  If notice is accomplished through 
electronic means, the insurer or vendor, as the case may be, shall maintain proof that the 
notice was sent. 
§7007.  Application for license and fees 
1.  Application for license to be filed with superintendent.  A sworn application 
for a license under this chapter must be made to and filed with the superintendent on 
forms prescribed and furnished by the superintendent. 
2.  Contents of application.  In addition to other information required by the 
superintendent, the application must: 
A.  Provide the name, residence address and other information required by the 
superintendent for an employee or officer of the vendor that is designated by the 
applicant as the person responsible for the vendor's compliance with the requirements 
of this chapter.  If the vendor derives more than 50% of its revenue from the sale of 
portable electronic device insurance, the information specified in this paragraph must 
be provided for all officers, directors and shareholders of record having beneficial 
ownership of 10% or more of any class of securities registered under the federal 
securities laws; 
B.  Appoint the superintendent as the applicant's attorney to receive service of all 
legal process issued against it in any civil action or proceeding in this State and agree 
that process so served is valid and binding against the applicant. The appointment is 
irrevocable, binds the company and any successor in interest as well as the assets or 
liabilities of the applicant and must remain in effect as long as the applicant's license 
remains in force in this State; and  
C.  Provide the location of the applicant's home office. 
3.  Time of application.  An application for licensure under this chapter must be 
made within 90 days of the application being made available by the superintendent.  
4.  Initial license valid for 24 months.  An initial license issued pursuant to this 
chapter is valid for 24 months and expires on the last day of the 24th month. 
5.  Fee.  Each vendor licensed under this chapter shall pay to the superintendent a fee 
as prescribed by section 601, subsection 29. 
SUMMARY 
This bill establishes portable electronic device insurance as a limited line of insurance 
and regulates its provision.