Section 229: Self-service storage insurance
[Text of section added by 2016, 401. See, also, Section 229 added by 2016, 402, Sec. 4, below.]
Section 229. (a) For the purposes of this section, the term ''self-service storage agent'' shall mean a self-storage facility operator who is licensed pursuant to this section. The terms ''occupant'', ''operator'', ''personal property'' and ''self-service storage facility'' shall have the same meanings as provided in section 1 of chapter 105A.
(b) The commissioner may issue a renewable self-service storage agent license for a term of not more than 2 years to an operator that has complied with this section, authorizing the operator to sell or offer to sell the insurance prescribed in this section in connection with and incidental to the rental of space at a self-service storage facility. Notwithstanding any general or special law to the contrary, a license issued pursuant to this section shall authorize the licensee and its employees or authorized representatives to engage in the activities that are authorized in this section.
(c) An applicant for a self-service storage agent license shall file a written application in a form prescribed by the commissioner. The applicant shall be at least 18 years of age and shall provide: (i) the physical address of the applicant's company headquarters; and (ii) a list of all self-service storage facilities where the self-service storage agent will conduct business pursuant tot the license. The list shall, upon request, be provided to the commissioner or a designee upon 30 days notice. An applicant shall maintain a list of all employees and authorized representatives who will be authorized to sell or offer to sell insurance pursuant to the license and shall provide a copy of the list of employees and authorized representatives to the commissioner upon request. A self-service storage agent shall not be required to have a separate license for each self-service storage facility or other place where business is transacted. The self-service storage agent shall notify the commissioner not less than 15 days prior to commencing business pursuant to the self-service storage agent's license at any locations not included on the application, or if a location ceases to conduct business pursuant to the license.
(d) A self-service storage agent may sell or offer to sell insurance only in connection with and incidental to the rental of space at a self-service storage facility on a master, corporate, commercial, group or individual policy basis and only with respect to personal property insurance that provides coverage to occupants at the self-service storage facility where the insurance is transacted for the loss of or damage to stored personal property that occurs at the covered facility.
(e) A self-service storage agent shall not sell or offer to sell insurance pursuant to this section unless the self-service storage agent makes readily available to the prospective occupant brochures or other written materials that have been reviewed and approved by the commissioner that:
(i) summarize the material terms of insurance coverage offered to occupants, including the identity of the insurer, the amount of any applicable deductible and how it shall be paid, the benefits of the coverage and any exclusions and conditions;
(ii) disclose that the policies offered by the self-service storage agent may provide a duplication of coverage already provided by an occupant's homeowner's insurance policy, renter's insurance policy, motor vehicle insurance policy, watercraft insurance policy or other source of property insurance coverage;
(iii) state that if insurance is required as a condition of rental, the requirement may be satisfied by the occupant purchasing the insurance prescribed in this section or by presenting evidence of other applicable insurance coverage;
(iv) describe the process for filing a claim, including any appeal process for a denial;
(v) state that an enrolled customer may cancel enrollment for coverage under a self-storage insurance policy at any time and the person paying the premium shall receive a refund or credit of any applicable unearned premium;
(vi) all costs and charges related to the insurance are stated in writing;
(vii) require evidence of coverage or a voluntary declination of coverage, in a form approved by the insurer, is provided to each occupant to whom coverage is offered; provided, however, that if insurance is required as a condition of rental pursuant to clause (iii), the requirement of evidence of a voluntary declination of coverage shall not apply; and
(viii) the insurance is provided by an insurer authorized to provide the applicable kind of insurance in the commonwealth.
(f) An employee or authorized representative of a self-service storage agent may sell or offer to sell self-storage insurance to occupants and such employee or authorized representative shall not be subject to licensure as a self-service storage agent; provided, however, that such employee or authorized representative shall be at least 18 years of age and the self-service storage agent shall obtain a license to authorize its employees or authorized representatives to sell or offer self-storage insurance pursuant to this section; and provided further, that an employee or authorized representative of a self-service storage agent shall not advertise, represent or otherwise hold themselves out as having a self-storage agent license.
(g) Each self-service storage agent shall provide a training program that gives employees and authorized representatives of the self-service storage agent who are directly engaged in the activity of selling or offering to sell self-storage insurance basic instructions about this section, including the kinds of insurance coverage authorized in this section. A self-service storage agent shall provide the training materials to the commissioner upon request.
(h) A self-service storage agent shall not: (i) sell or offer to sell insurance except in connection with and incidental to the rental of space at a self-service storage facility; or (ii) advertise, represent or otherwise portray itself or any of its employees or agents as licensed insurers or insurance producers.
(i) Nothing in this section shall prohibit: (i) an insurer from paying, and a self-service storage agent from receiving, a reasonable commission, service fee or other valuable consideration dependent on the sale of the type of insurance authorized in this section; or (ii) a self-service storage agent from paying, and its employees or agents from receiving reasonable production payments or incentive payments; provided, however, that such payments shall not depend solely on the sale of insurance.
(j) An operator shall not be required to be licensed pursuant to this section solely to display and make available to prospective occupants brochures and other promotional materials created by or on behalf of an authorized insurer or by a surplus lines insurer.
(k) Section 177 shall apply to all persons not authorized to sell or offer to sell self-storage insurance pursuant to this section.
(l) A self-service storage agent shall not be subject to the continuing education requirements of section 177E.
(m) The charges for insurance coverage pursuant to this section may be billed and collected by the self-service storage agent. Any charge to the enrolled occupant for coverage that is not included in the cost associated with the rental of space at a self-service storage facility shall be separately itemized on the occupant's bill. If the coverage is included with the rental of space at a self-service storage facility, the self-service storage agent shall clearly and conspicuously disclose to the occupant that the coverage is included with the rental of space at a self-service storage facility. Self-service storage agents billing and collecting the charges shall not be required to maintain the funds in a segregated account provided that the agent is authorized by the insurer to hold the funds in an alternative manner and remits the amounts to the supervising entity within 60 days of receipt. All funds received by a self-service storage facility from an occupant for the sale of self-storage insurance coverage shall be considered funds held in trust by the self-service storage agent in a fiduciary capacity for the benefit of the insurer. A self-service storage agent may receive reasonable compensation for billing and collection services.
(n) Notwithstanding any general or special law to the contrary, if the self-storage insurance coverage terms and conditions are changed, then the self-service storage agent shall provide each occupant with a revised certificate, endorsement, updated brochure or other evidence indicating that a change in the terms and conditions has occurred and a summary of material changes.
(o) If a self-service storage agent or its employee or authorized representative violates this section, the commissioner may, after notice and a hearing, impose:
(i) a fine not to exceed $500 per violation or $5,000 in the aggregate for the violation; and
(ii) other penalties that the commissioner considers necessary and reasonable to carry out this section, including: (1) suspending the privilege of transacting self-storage insurance pursuant to this section at specific business locations where any such violations have occurred; and (2) suspending or revoking the right of individual employees or authorized representatives to act pursuant to the license.
(p) Chapter 176D shall apply to self-service storage agents, administrators and other persons marketing, selling or offering to sell self-storage insurance coverage.
(q) Nothing in this section shall be construed to require an insurer to obtain an insurance producer license pursuant to section 162I.
(r) The commissioner may promulgate regulations necessary to administer this section.
[Text of section added by 2016, 402, Sec. 4. See, also, Section 229 added by 2016, 401, above.]
Section 229. Notwithstanding any general or special law to the contrary, chapter 176V shall apply to insurers governed by this chapter.