2022 -- H 8191

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LC005822

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2022

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A N   A C T

RELATING TO INSURANCE -- SELF-SERVICE STORAGE INSURANCE

     

     Introduced By: Representative Jacquelyn M. Baginski

     Date Introduced: April 29, 2022

     Referred To: House Corporations

     It is enacted by the General Assembly as follows:

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     SECTION 1. Title 27 of the General Laws entitled "INSURANCE" is hereby amended by

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adding thereto the following chapter:

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CHAPTER 2.8

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SELF-SERVICE STORAGE INSURANCE

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     27-2.8-1. Definitions.

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     For purposes of this section, the following terms shall have the following meanings:

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     (1) "Commissioner" means the definition prescribed by § 42-14-5;

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     (2) "Location" means any physical location in the State of Rhode Island or any website,

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call center site or similar location directed to residents of the State of Rhode Island;

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     (3) "Occupant" means a person, or his or her sublessee, successor, or assign, who is entitled

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to the use of storage space at a self-service storage facility under a rental agreement, to the exclusion

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of others;

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     (4) "Owner" means a person or business entity, whether a resident or non-resident of this

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state, that is the proprietor, operator, lessor, or sublessor of a self-service storage facility, an agent

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of any of the foregoing, or any other person or business entity authorized to manage the facility or

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to receive rent from an occupant under a rental agreement.

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     (5) "Personal property" means movable property not affixed to land.

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     (6) "Rental agreement" means any written agreement or lease that establishes or modifies

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the terms, conditions, rules, or any other provisions concerning the use and occupancy of storage

 

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space at a self-service storage facility.

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     (7) "Self-service storage facility" means any real property designed and used for the

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purpose of renting or leasing individual storage space to occupants who are to have access to the

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space for the purpose of storing and removing personal property.

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     (8) "Self-service storage insurance" means personal property insurance offered in

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connection with and incidental to the rental of storage space at a self-service storage facility and

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which provides coverage to occupants for the loss of or damage to personal property occurring at

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the facility or when the property is in transit to or from the facility during the period of the rental

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agreement.

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     (9) "Supervising entity" means a business entity that is a licensed insurer or insurance

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producer that is authorized by an insurer to supervise the administration of a self-service storage

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insurance program.

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     27-2.8-2. Licensure exemption for owners.

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     (a) An owner and its authorized representatives and employees may sell, solicit, and offer

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self-service storage insurance coverage without obtaining an insurance producer license provided

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that the requirements of this chapter are met.

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     (b) The supervising entity shall maintain a registry of owner locations at which self-service

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storage insurance is sold, solicited, or offered in this state. Upon request by the commissioner and

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with ten (10) days' notice to the supervising entity, the registry shall be open to inspection and

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examination by the commissioner during regular business hours of the supervising entity.

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     27-2.8-3. Requirements for sale of self-service storage insurance.

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     (a) At every location where self-service storage insurance is offered to occupants,

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brochures or other written or electronic materials must be made available which:

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     (1) Disclose that self-service storage insurance may provide a duplication of coverage

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already provided by a homeowner's insurance policy, renter's insurance policy or other source of

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coverage;

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     (2) State that the enrollment in the self-service storage insurance program offered by the

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owner is not required in order to lease storage space at the self-service storage facility;

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     (3) Provide the actual terms of the insurance coverage, or summarize the material terms of

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the insurance coverage, including:

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     (i) The identity of the insurer;

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     (ii) The identity of the supervising entity;

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     (iii) The amount of any applicable deductible and how it is to be paid;

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     (iv) Benefits of the coverage; and

 

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     (v) Key terms and conditions of coverage.

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     (4) Summarize the process for filing a claim; and

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     (5) State that an occupant may cancel enrollment for self-service storage insurance

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coverage at any time and the person paying the premium shall receive a refund of any applicable

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unearned premium.

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     (b) Self-service storage insurance may be provided under a commercial, corporate, group,

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or master policy.

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     27-2.8-4. Authority of owners.

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     (a) The employees and authorized representatives of owners may sell, solicit, and offer

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self-service storage insurance and shall not be subject to licensure as an insurance producer under

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this title provided that:

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     (1) The insurer issuing the self-service storage insurance either directly supervises or

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appoints a supervising entity to supervise the administration of the program including development

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and implementation of a training program for employees and authorized representatives of the

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owners who are directly engaged in the activity of selling, soliciting, or offering self-service storage

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insurance. The training required by this subsection shall comply with the following:

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     (i) The training shall be delivered to employees and authorized representatives of owners

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who are directly engaged in the activity of selling, soliciting, or offering self-service storage

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insurance;

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     (ii) The training may be provided in electronic form. The supervising entity shall

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implement a system to monitor whether the electronic training has been taken by all relevant

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employees; and

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     (iii) Each employee and authorized representative shall receive basic instruction about the

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self-service storage insurance offered and the disclosures required under § 27-2.8-3(a).

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     (2) No employee or authorized representative of an owner shall advertise, represent or

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otherwise hold himself or herself out as a licensed insurance producer, unless so licensed.

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     (b) Notwithstanding any other provision of law, employees or authorized representatives

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of an owner shall not be compensated based primarily on the number of occupants enrolled for self-

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service storage insurance coverage but may receive compensation for self-service storage insurance

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which is incidental to their overall compensation.

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     (c) The charges for self-service storage insurance coverage may be billed and collected by

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the owner. Any charge for the self-service storage insurance coverage that is not included in the

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cost associated with the lease of storage space at the self-service storage facility shall be separately

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itemized on the occupant's bill. If the self-service storage insurance coverage is included in the cost

 

LC005822 - Page 3 of 5

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associated with the lease of storage space at the self-service storage facility, the owner shall clearly

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and conspicuously disclose to the occupant that the self-service storage insurance coverage is

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included in the cost associated with the lease of storage space at the self-service storage facility.

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Owners billing and collecting such charges shall not be required to maintain such funds in a

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segregated account; provided that, the owner is authorized by the insurer or supervising entity to

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hold such funds in an alternative manner and remits the premiums to the insurer or supervising

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entity within sixty (60) days of receipt. All premiums received by an owner from an occupant for

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the sale of self-service storage insurance shall be considered funds held by the owner in a fiduciary

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capacity for the benefit of the insurer. Owners may receive compensation for billing and collection

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services.

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     27-2.8-5. Penalties.

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     If an owner or its employee or authorized representative violates any provision of this

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section, the commissioner, after notice and opportunity for a hearing, may impose any penalty as

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appropriate pursuant to § 42-14-16.

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     SECTION 2. This act shall take effect on January 1, 2023.

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LC005822

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO INSURANCE -- SELF-SERVICE STORAGE INSURANCE

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     This act would create a legal framework for regulating self-service storage insurance in

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this state. It would declare that the sale, solicitation or offer of self-service storage insurance, as

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defined, would not require an insurance producer license.

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     This act would take effect on January 1, 2023.

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LC005822

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