HSB 150

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. _____ 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. _____ 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.