law15146

Chapter 146

2015 -- S 0334 SUBSTITUTE B
Enacted 07/02/2015

A N A C T

RELATING TO BUSINESSES AND PROFESSIONS - MOTOR VEHICLE GLASS REPAIR AND REPLACEMENT

Introduced By: Senators DiPalma, Lombardo, Ciccone, and Goodwin

Date Introduced: February 12, 2015

It is enacted by the General Assembly as follows:

SECTION 1. Title 5 of the General Laws entitled "BUSINESSES AND PROFESSIONS"

is hereby amended by adding thereto the following chapter:

CHAPTER 38.5

MOTOR VEHICLE GLASS CONSUMER PROTECTION ACT

5-38.5-1. Short title. -- This chapter shall be known and may be cited as the "Motor

Vehicle Glass Consumer Protection Act."

5-38.5-2. Purpose. -- By enacting this chapter, it is the intent of the general assembly to

protect consumers of motor vehicle glass repair and replacement services through the licensing

and regulation of motor vehicle glass repair shops.

5-38.5-3. Definitions. -- As used in this chapter, the following terms shall have the

following meanings unless the context clearly specifies otherwise:

(1) "Department" means the Rhode Island department of business regulation and the

official actions, duties, and responsibilities of its director, deputy directors, employees, or

authorized designees.

(2) "Director" means the director of the Rhode Island department of business regulation,

department officials, or authorized individuals designated by the director to take official actions.

(3) "Person" means individuals, associations, partnerships, firms, and corporations, and

the officers, directors, and employees of a corporation.

(4) "Motor vehicle glass repair" means the business or act of repairing or replacing

damaged or undamaged glass in motor vehicles for compensation.

(5) "Motor vehicle glass repair shop" means a person or entity that, for compensation, or

with the intention or expectation of receiving the same, repairs or replaces, or undertakes to

repair or replace, motor vehicle glass.

(6) "Licensed motor vehicle glass repair shop" means a motor vehicle glass repair shop

that has a current valid license for motor vehicle glass repair issued under this chapter.

(7) "Unlicensed motor vehicle glass repair shop" means a motor vehicle glass repair shop

that does not have a current valid license issued under this chapter; that has had its license

revoked or suspended; or that has surrendered its license under this chapter.

5-38.5-4. Duties of the department of business regulation. – (a) The department shall

issue licenses as provided for in this chapter and shall authorize the transfer of licenses and the

establishment of new offices for previously licensed motor vehicle glass repair shops.

(b) Within one year of the effective date of this chapter, the department shall issue a

motor vehicle glass repair license, without payment of fee, to any holder of a limited glass license

for motor vehicle glass installation issued by the department who or that submits an application

as outlined in this chapter; persons or entities grandfathered under this subsection must be

compliant with all provisions of this chapter within one year of the effective date of this chapter

or such license shall be revoked by the department.

shops, including:

(1) Acting on complaints from consumers and law enforcement officials; and

(2) Revoking, suspending, or taking other disciplinary actions with respect to facilities,

corporations, or persons licensed under this chapter.

(d) The department may adopt reasonable rules and regulations for the licensing of motor

vehicle glass repair shops similar to other collision repair shops.

(e) The department may establish, adopt, amend, and rescind rules, regulations,

procedures, standards for sanitary, hygienic, and healthful conditions for work premises and

facilities used by motor vehicle glass repair shops as necessary to carry out the provisions of this

chapter.

(f) The department may establish minimum requirements for the certification of motor

vehicle glass repair technicians consistent with current vehicle glass standards established by

American National Standards Institute (ANSI) related to repair of laminated automotive glass and

auto glass replacement and other recognized national or corporate training programs.

(g) Notwithstanding any provision or law to the contrary, this chapter shall not prohibit or

restrict the installation or repair of motor vehicle glass by an auto body repair shop licensed by

the department.

5-38.5-5. Practices for which license is required. – (a) An annual license shall be issued

by the department to persons meeting the qualifications set by the department and paying the

required fees.

(b) No person shall engage in motor vehicle glass repair, or advertise or represent in any

form or manner that he, she, or it is a motor vehicle glass repair shop, unless such person

possesses a current valid license to operate or conduct a motor vehicle glass repair shop issued

under this chapter.

licensed motor vehicle glass repair shop pursuant to this chapter.

5-38.5-6. Applications for licenses. – (a) Application for motor vehicle glass repair shop

licenses shall be made to the department of business regulation in any form the department

requires and shall be accompanied by the required fee and evidence of financial responsibility. In

the application, the department:

(1) Shall require the name and address of the applicant and of any person having financial

interest, direct or indirect, in the business to be conducted by the applicant, identify at least one

natural person who is in charge of the operations of the applicant, and such other information as

the director shall require; and

(2) May require information relating to the applicant's financial standing, the applicant's

business integrity, whether the applicant has an established place of business, whether the

applicant is properly able to conduct the business of a motor vehicle glass repair shop, and any

other pertinent information consistent with the safeguarding of the public interest in the locations

in which the applicant proposes to engage in business, all of which may be considered by the

department in determining whether the granting of that application is in the public interest.

(b) A person applying for licensing or renewal as a licensed motor vehicle glass repair

shop shall:

(1)(i) Maintain a physical place of business within the state at which it has indoor

facilities suitable to perform motor vehicle glass repair services and from which it may lawfully

dispatch mobile service vans with the intention of performing glass repair services on a mobile

basis; or

(ii) If providing motor vehicle glass repair services on a mobile-only basis, have access to

indoor facilities licensed or subject to regulation under chapters 38, 38.3, or 38.5 of title 5 or

chapter 5 of title 31 at which services must be performed indoors during inclement weather, in

accordance with the resin and adhesive manufacturer instructions, as well as ANSI standards.

(2) If using a mobile service van, register and insure such van as a commercial vehicle;

(3) If providing motor vehicle glass repair services, possess and maintain in working

order, the equipment necessary to provide motor vehicle windshield glass stone chip repair;

(4) If providing motor vehicle glass repair services, possess and maintain the equipment

necessary to perform motor vehicle glass replacement services;

(5) Obtain all required local, state, and federal licenses and permits, including a state

sales tax identification number and a federal tax identification number;

(6) Not subcontract or sublet motor vehicle glass repair services to any other person or

entity not in the employ of the licensed motor vehicle glass repair shop unless such person or

entity is also a duly licensed motor vehicle glass repair shop.

5-38.5-7. Duration of license - Renewal. – (a) The department shall determine the term

of each license issued pursuant to this chapter and may issue multi-year licenses with a fee for

each year of licensure paid in full at issuance or renewal; provided, however, no license shall

remain in force for a period in excess of three (3) years. All licenses shall be issued for the

twelve-month (12) period commencing on January 1 of each year, and the fee thereafter shall be

at the full, annual rate specified in § 5-38.5-8, regardless of the date of application or issuance of

that license.

(b) Any fee for the initial issuance or renewal of a license issued pursuant to this chapter

shall be determined by multiplying the current annual fee by the term of initial licensure or

renewal. The total fee for the entire term of licensure or renewal shall be paid at the time of

application for the license or renewal. The license shall be renewed upon payment of the renewal

fee

5-38.5-8. License fee. – The license fee for each year shall be three hundred dollars

($300). If an applicant desires to do business in more than one location, he, she, or it shall pay a

separate fee of three hundred dollars ($300) for each location authorized by the department. For

the purposes of this section, the term "location" means a physical place of business at which a

licensed motor vehicle glass repair shop has indoor facilities suitable to perform motor vehicle

glass repair services and shall not apply to locations where a licensed motor vehicle glass repair

shop provides services on a mobile basis.

5-38.5-9. Licenses – Content and display. – (a) The license of motor vehicle glass

repair shop shall specify the name of the holder of that business and the location at which

business is conducted; shall not be transferable; may be exercised only by the person whose

name appears on the license; and must be conspicuously displayed at that location. The license

number shall appear on all business communications, estimates, signs, business cards, and other

written documentation relating to that business.

(b) No unlicensed motor vehicle glass repair shop shall display in its place of business

any license or copy or facsimile of a license, nor shall it in any manner state that it is, or hold

itself out to be, a licensed motor vehicle glass repair shop.

in accordance with the procedure and on the grounds set forth in this chapter or may be

terminated by voluntary surrender by the license holder.

(d) Upon the expiration, termination, or surrender of a license, the licensee shall deliver

the license to the department which shall cancel the license and endorse the date of expiration,

termination, or surrender on the certificate.

(e) The department shall open to public inspection, either by keeping on file in

convenient form or by publishing on the department's website, a list of names and addresses of all

motor vehicle glass repair shops licensed by the department and the names of all persons whose

licenses have been revoked, suspended, or surrendered and the specific time for which such

suspension, revocation, or surrender became effective.

5-38.5-10. Grounds for denial, suspension, or revocation of licenses. – The department

may deny an application for license or suspend or revoke a license after it has been granted for

any of the following reasons:

(1) On proof of unfitness of the applicant to do business as a motor vehicle glass repair

shop;

(2) For any misstatement by the applicant in his, her, or its application for a license;

(3) For any failure to comply with the provisions of this chapter or with any rule or

regulation promulgated by the department;

(4) For defrauding any customer;

(5) For dismantling any motor vehicle glass without the written authorization of the

motor vehicle owner;

(6) For refusing to surrender any motor vehicle to its owner upon tender of payment of

the proper charges for towing, storage, and work done on that motor vehicle;

(7) For having indulged in any unconscionable practice relating to the business as a motor

vehicle glass repair shop;

(8) For willful failure to perform work as contracted for;

(9) For failure to comply with the safety standards of the industry;

(10) For the purchase of used vehicle parts from unlicensed entities; or

(11) For failure to comply with the requirements of displaying of licenses or notices

required by this chapter.

5-38.5-11. Procedure for suspension or revocation of license. – No license shall be

suspended or revoked except after a hearing before the department or a hearing officer appointed

by the department. The hearing shall be conducted in accordance with the administrative

procedures act, chapter 35 of title 42. The order to suspend or revoke that license shall not be

effective for ten (10) days after written notice has been sent to the licensee.

5-38.5-12. Right to appeal. – Any licensee or applicant for license or other person in

interest being aggrieved by the final order or decision of the department of business regulation

has the right to appeal, pursuant to the administrative procedures act, chapter 35 of title 42.

5-38.5-13. Records; repair bills - Disclosure. – (a) Every licensed motor vehicle glass

repair shop shall maintain records for each motor vehicle upon which motor vehicle glass repair

services have been performed, showing the usage of all glass parts; major accessory parts,

including moldings and major hardware component parts; and the adhesive system used in the

motor vehicle glass repair. The record shall also include the brand, product number or name and

lot and batch numbers for the adhesive system product used. The record shall be maintained for

thirty-six (36) months or for so long as a warranty on the motor vehicle glass repair service

performed is in effect, whichever is longer.

(b) Each repair bill shall:

(1) Contain the motor vehicle glass repair shop license number and the license number of

any other facility where motor vehicle glass repair services are performed on the motor vehicle;

(2) Contain an itemized listing of the usage of all glass parts, major accessory parts,

including moldings and major hardware component parts, and the adhesive system used in the

motor vehicle glass repair;

(3) Include the brand, product number or name and lot and batch numbers for the

adhesive system product used;

(4) Include a certification, under the penalties of perjury, that the repairs to a particular

vehicle have actually been made and were completed by a licensed shop and certified technician

as determined by the department; and

(5) Advise the consumer of post-repair practices and the appropriate drive-away time

that may be necessary to ensure safe operation of the vehicle.

all information relating to the charges for repair or replacement services, including the amount of

the charges, the identification and line-item charges for the parts provided, and verification of

the parts used, regardless of whether the amount is paid by the consumer or billed to the

consumer's insurance company.

5-38.5-14. Responsibility of licensee for acts of agents. – If a licensee is a firm or

corporation, it is sufficient cause for the suspension or revocation of a license that any officer,

director, or trustee of the firm or corporation or any member, in the case of a partnership, has

been found by the department of business regulation guilty of any act or omission that would be

cause for refusing, suspending, or revoking a license to that party as an individual. Each licensee

shall be responsible for the acts of any salesperson or any person acting as the agent for that

licensee, and for the acts of any salesperson, estimator, or other employee acting as the agent for

that licensee.

5-38.5-15. Reimbursement fee. – The director of the department may assess a motor

vehicle glass repair shop for reimbursement of the department's actual expenses for the

investigation and hearing of significant motor vehicle glass repair shop matters. An assessment

may be sought in the event that a motor vehicle glass repair shop does not prevail after a final

judicial appeal.

5-38.5-16. Prohibited practices. – (a) No licensed motor vehicle glass repair shop or

other person shall:

(1) Advertise for motor vehicle glass repair services in the state without including its

license number issued by the department as part of the advertisement.

(2) Make any false or fraudulent statement in connection with any motor vehicle glass

repair or attempt to collect for a motor vehicle glass repair; or without lawful authority, prevent

the owner of a motor vehicle from recovering the same.

(3) Knowingly submit a claim to an insurer or a third-party administrator for vehicle glass

repair, replacement, or for related services:

(i) If the vehicle glass was not damaged prior to repair or replacement;

(ii) If the services were not provided;

(iii) Showing work performed in a geographical area that in fact was not the location

where the services were provided and that results in a higher payment than would otherwise be

paid to the person by the policyholder's insurer;

(iv) Without having authorization by the owner, lessee, or insured driver of the vehicle

for the repair of the vehicle;

(v) Showing work performed on a date other than the date the work was actually

performed and resulting in a change of insurance coverage status; or

(vi) Making any other material misrepresentation related to any vehicle glass services

provided.

(4) Advise a policyholder to falsify the date of damage to the vehicle glass that results in

a change of insurance coverage for repair or replacement of the vehicle glass.

(5) Falsely sign, on behalf of a policyholder or another person, a work order, insurance

assignment form, or other related form in order to submit a claim to an insurer for vehicle glass

repair or replacement or for related services.

(6) Knowingly misrepresent to a policyholder or other person:

(i) The price of the proposed repairs or replacement being billed to the policyholder's

insurer; and

(ii) That the insurer has authorized the repairs or replacement of the glass of the insured

vehicle.

(7) Represent to a policyholder or other person that the repair or replacement will be paid

for entirely by the policyholder's insurer and at no cost or "free" to the policyholder unless the

insurance coverage has been verified by an authorized representative of the insurer.

(8) Add to the damage of vehicle glass before repair in order to increase the scope of

repair or replacement or encourage a policyholder or other person to add to the damage of vehicle

glass before repair.

(9) Perform work clearly and substantially beyond the level of work necessary to repair

or replace the vehicle glass to return the vehicle back to a safe, pre-loss condition.

(10) Perform work as an unlicensed motor vehicle glass repair shop.

(11) Perform work inconsistent with standards established by the American National

Standards Institute (ANSI) related to repair of laminated automotive glass and auto glass

replacement.

(b) It is unlawful for a person who sells or repairs and replaces motor vehicle glass to

intentionally misrepresent the relationship of the licensed motor vehicle glass repair shop to an

insurer.

representative, or anyone acting on its behalf, must not:

(1) Threaten, coerce, or intimidate a person to file a claim for motor vehicle glass repair

or replacement.

(2) Engage in unfair or deceptive practices to induce a person to file a motor vehicle glass

repair claim.

(3) Induce a person to file a motor vehicle glass repair claim when the damage to the

motor vehicle glass is insufficient to warrant vehicle glass repair or replacement.

(4) Perform motor vehicle glass repair or replacement services under an insurance policy

without first obtaining insurer approval.

(d) A violation of this section is subject to enforcement under this chapter.

5-38.5-17. Civil penalties for violations. – In addition to every other power granted to

the department of business regulation, the department may fine a licensee not more than one

hundred dollars ($100) for any violation or failure to comply with the provisions of this chapter or

with any rule or regulation promulgated by the department.

5-38.5-18. Criminal penalties for violations – Injunctive relief. – (a) Any person, firm,

or corporation required to be licensed under this chapter who or that conducts a motor vehicle

glass repair shop business without obtaining a license, or who, after the denial, suspension, or

revocation of a license, conducts that business, is guilty of a misdemeanor and shall, upon

conviction, be punished by a fine of not more than one thousand dollars ($1,000), or

imprisonment for not more than one year, or both; for a second conviction, is guilty of a felony

and shall, upon conviction, be punished by a fine of not less than one thousand dollars ($1,000)

and not more than five thousand dollars ($5,000), or by imprisonment for not more than two (2)

years, or both; and for a third and subsequent conviction, is guilty of a felony and shall, upon

conviction, be punished by a fine of not less than five thousand dollars ($5,000), or imprisonment

for not less than two (2) years nor more than five (5) years, or both. For the purposes of this

section, a plea of nolo contendere with probation shall be considered a conviction.

(b) If the department has reason to believe that any person, firm, corporation, or

association is conducting a motor vehicle glass repair shop business without obtaining a license,

or who after the denial, suspension, or revocation of a license is conducting that business, the

department may issue its order to that person, firm, corporation, or association commanding them

or it to appear before the department at a hearing to be held not sooner than ten (10) days after

issuance of that order to show cause why the department should not issue an order to that person

to cease and desist from the violation of the provisions of this chapter. That order to show cause

may be served on any person, firm, corporation, or association named by any person in the same

manner that a summons in a civil action may be served, or by mailing a copy of the order,

certified mail, return receipt requested, to that person at any address at which that person has done

business or at which that person lives. If during that hearing the department is satisfied that the

person is in fact violating any provision of this chapter, the department may order that person, in

writing, to cease and desist from that violation. All hearings herein are governed in accordance

with the administrative procedures act, chapter 35 of title 42. If that person fails to comply with

an order of the department after being afforded a hearing, the superior court for Providence

County has jurisdiction upon complaint of the department to restrain and enjoin that person from

violating this chapter.

5-38.5-19. Severability. – The provisions of this chapter are severable; and if any of the

provisions are held to be invalid, the decision of the court respecting that provision or provisions

shall not affect the validity of any other provision, which can be given effect without that invalid

provision.

SECTION 2. Section 27-29-4 of the General Laws in Chapter 27-29 entitled "Unfair

Competition and Practices" is hereby amended to read as follows:

27-29-4. Unfair methods of competition and unfair or deceptive acts or practices

defined. -- The following are defined as unfair methods of competition and unfair and deceptive

acts or practices in the business of insurance:

(1) Misrepresentations and false advertising of policies or contracts. - Making, issuing,

circulating, or causing to be made, issued, or circulated, any estimate, illustration, circular, or

statement, sales presentation, omission, or comparison misrepresenting the terms of any policy

issued or to be issued or the benefits, conditions, or advantages promised by any policy or the

dividends or share of the surplus to be received on any policy, or making any false or misleading

statement as to the dividends or share of surplus previously paid on any policy, or making any

misleading representation or any misrepresentation as to the financial condition of any insurer, or

as to the legal reserve system upon which any life insurer operates, or using any name or title of

any policy or class of policies misrepresenting the true nature of that policy or class of policies, or

making any misrepresentation to any policyholder insured in any company including any

intentional misquote of a premium rate, for the purpose of inducing or tending to induce the

policyholder to lapse, forfeit, or surrender his or her insurance, or misrepresenting for the purpose

of effecting a pledge or assignment of or effecting a loan against any policy, or misrepresenting

any policy as being share or stock;

(2) False information and advertising generally. - Making, publishing, disseminating,

circulating, or placing before the public or causing, directly or indirectly, to be made, published,

disseminated, circulated, or placed before the public in a newspaper, magazine, or other

publication, or in the form of a notice, circular, pamphlet, letter, or poster, or over any radio or

television station, or in any other way, an advertisement, announcement, or statement containing

any assertion, representation, or statement with respect to the business of insurance or with

respect to any person in the conduct of his or her insurance business which is untrue, deceptive,

or misleading;

(3) Defamation. - Making, publishing, disseminating, or circulating, directly or

indirectly, or aiding, abetting, or encouraging the making, publishing, disseminating, or

circulating of any oral or written statement or any pamphlet, circular, article of literature which is

false or maliciously critical of or derogatory to the financial condition of an insurer, and which is

calculated to injure any person engaged in the business of insurance;

(4) Boycott, coercion, and intimidation. - Entering into any agreement to commit, or by

any concerted action committing, any act of boycott, coercion, or intimidation resulting in or

tending to result in unreasonable restraint of, or monopoly in, the business of insurance;

(5) (i) False financial statements. - Knowingly filing with any supervisory or other public

official, or knowingly making, publishing, disseminating, circulating, or delivering to any person,

or placing before the public or causing directly or indirectly, to be made, published, disseminated,

circulated, delivered to any person, or placed before the public any false material statement of

financial condition of an insurer; or

(ii) Knowingly making any false entry of a material fact in any book, report, or statement

of any insurer or knowingly omitting to make a true entry of any material fact pertaining to the

business of the insurer in any book, report, or statement of the insurer;

(6) Stock operations and advisory board contracts. - Issuing or delivering or permitting

agents, officers, or employees to issue or deliver agency company stock or other capital stock, or

benefit certificates or shares in any common law corporation, or securities of any special or

advisory board contracts or other contracts of any kind promising returns and profits as an

inducement to insurance;

(7) (i) Unfair discrimination. - Making or permitting any unfair discrimination between

individuals of the same class and equal expectation of life in the rates charged for any policy of

life insurance or of life annuity or in the dividends or other benefits payable on any such policy or

life annuity, or in any other of the terms and conditions of the policy; or

(ii) Making or permitting any unfair discrimination between individuals of the same

class and of essentially the same hazard in the amount of premium, policy fees, or rates charged

for any policy or contract of accident or health insurance or in the benefits payable under any

policy or contract, or in any of the terms or conditions of that policy, or in any other manner;

(iii) Making or permitting any unfair discrimination between individuals or risks of the

same class and of essentially the same hazards by refusing to issue, refusing to renew, canceling,

or limiting the amount of insurance coverage on a property or casualty risk because of the

geographic location of the risk, unless:

(A) The refusal, cancellation, or limitation is for a business purpose that is not a pretext

for unfair discrimination; or

(B) The refusal, cancellation, or limitation is required by law or regulation;

(iv) Making or permitting any unfair discrimination between individuals or risks of the

same class and of essentially the same hazards by refusing to issue, refusing to renew, canceling,

or limiting the amount of insurance coverage on a residential property risk, or the personal

property contained in the residential property risk, because of the age of the residential property,

unless:

(A) The refusal, cancellation, or limitation is for a business purpose that is not a pretext

for unfair discrimination; or

(B) The refusal, cancellation, or limitation is required by law or regulation;

(v) Refusing to insure, refusing to continue to insure, or limiting the amount of coverage

available to an individual because of the sex or marital status of the individual; nothing in this

subsection shall prohibit an insurer from taking marital status into account for the purpose of

defining persons eligible for dependent benefits; or

(vi) To terminate, or to modify coverage, or to refuse to issue or refuse to renew any

property or casualty policy solely because the applicant or insured or any employee of either is

mentally or physically impaired; provided, that this subsection shall not apply to accident and

health insurance sold by a casualty insurer and, provided that this subsection shall not be

interpreted to modify any other provision of law relating to the termination, modification,

issuance or renewal of any insurance policy or contract;

(8) (i) Rebates. - Except as otherwise expressly provided by law, knowingly permitting

or offering to make or making any policy or agreement as to the policy other than as plainly

expressed in the policy issued on it, or paying or allowing or giving or offering to pay, allow, or

give, directly or indirectly, as inducement to the policy, any rebate of premiums payable on the

policy, or any special favor or advantage in the dividends or other benefits on the policy, or any

valuable consideration or inducement not specified in the policy, or giving, selling, or purchasing

or offering to give, sell, or purchase as inducement to the policy, or in connection with the policy,

any stocks, bonds, or other securities of any insurance company or other corporation, association,

or partnership, or any dividends or profits accrued on the security, or anything of value not

specified in the policy;

(ii) Nothing in subdivision (7) of this section or paragraph (i) of this subdivision shall be

construed as including within the definition of discrimination or rebates any of the following

practices:

(A) In the case of any contract of life insurance policies or life annuity, annuities paying

bonuses to policyholders or abating their premiums in whole or in part out of surplus accumulated

from nonparticipating insurance; provided, that any bonuses or abatement of premiums shall be

fair and equitable to policyholders and for the best interests of the company and its policyholders;

(B) In the case of life insurance policies issued on the industrial debit plan, making

allowance to policyholders who have continuously for a specified period made premium

payments directly to an office of the insurer in an amount which fairly represents the saving in

collection expenses; and

or expense experience under it, at the end of the first or any subsequent policy year of insurance

under the policy, which may be made retroactive only for the policy year;

(9) (i) Free choice of insurance producer or insurer. - When any person, firm, or

corporation engaged in the business of lending money on the security of real or personal property,

or in the business of negotiating, purchasing, selling, or holding loans on the security of real

property, or in the business of building, selling, or financing the sale or purchase of real property,

or any trustee, director, officer, agent, or other employee of that person, firm, or corporation,

requires that property insurance be procured for the property, the borrower, debtor, or purchaser

shall have free choice of insurance producer and insurer through or by which the insurance is to

be placed or written, subject only to the right of the builder, creditor, lender, or seller:

(A) To require evidence, to be produced at a reasonable time prior to commencement or

renewal of risk, that the insurance providing reasonable coverage has been obtained in an amount

equal to the amount required by the builder, creditor, lender, or seller;

(B) To require insurance in an insurer authorized to do business and having a licensed

resident insurance producer agent in this state; and

solvency;

(ii) When any contractor or subcontractor is required to procure a surety bond or policy

of insurance with respect to any building or construction contract which is about to be, or which

has been bid or entered into, the contractor or subcontractor shall have free choice of insurance

producer and insurer through or by which the surety bond or insurance is to be written; provided,

that the owner or contractor shall have the right: (A) to require evidence, to be produced at a

reasonable time prior to commencement or renewal of risk, that the insurance providing

reasonable coverage has been obtained in an amount equal to the amount required by the builder,

creditor, lender, or seller; (B) to require insurance in an insurer authorized to do business and

having a licensed resident insurance producer in this state; and (C) to refuse to accept insurance in

a particular insurer on reasonable grounds related to solvency; provided, that the owner or

contractor shall have the right to approve the form, sufficiency, or manner of execution of the

surety bond or policy or insurance furnished by the insurance company or insurance producer

selected by the contractor or subcontractor;

(iii) No person who lends money or extends credit may:

(A) Solicit insurance for the protection of real property after a person indicates interest in

securing a first mortgage credit extension until that person has received a commitment in writing

from the lender as to a loan or credit extension;

(B) Unreasonably reject a policy furnished by the borrower for the protection of the

property securing the creditor lien. A rejection shall not be deemed unreasonable if it is based on

reasonable standards, uniformly applied, relating to the extent of coverage required and the

financial soundness and the services of an insurer. The standards shall not discriminate against

any particular type of insurer, nor shall the standards call for rejection of a policy because it

contains coverage in addition to that required in the credit transaction;

a separate charge, in connection with the handling of any policy required as security for a loan on

real estate, or pay a separate charge to substitute the policy of one insurer for that of another. This

subsection does not include the interest that may be charged on premium loans or premium

advancements in accordance with the terms of the loan or credit document;

(D) Use or disclose, without the prior written consent of the borrower, mortgagor, or

purchaser taken at a time other than the making of the loan or extension of credit, information

relative to a policy which is required by the credit transaction, for the purpose of replacing the

insurance; or

(E) Require any procedures or conditions of duly licensed insurance producers or

insurers not customarily required of those insurance producers or insurers affiliated or in any way

connected with the person who lends money or extends credit;

(iv) Every person who lends money or extends credit and who solicits insurance on real

and personal property subject to paragraph (iii) of this subdivision shall explain to the borrower in

writing that the insurance related to the credit extension may be purchased from an insurer or

insurance producer of the borrower's choice, subject only to the lender's right to reject a given

insurer or insurance producer as provided in paragraph (iii)(B) of this subdivision. Compliance

with disclosures as to insurance required by truth in lending laws or comparable state laws shall

be compliance with this subsection;

(v) This requirement for a commitment shall not apply in cases where the premium for

the required insurance is to be financed as part of the loan or extension of credit involving

personal property transactions;

(vi) The commissioner shall have the power to examine and investigate those insurance

related activities of any person or insurer that the commissioner believes may be in violation of

this section. Any affected person may submit to the commissioner a complaint or material

pertinent to the enforcement of this section;

(vii) Nothing in this section shall prevent a person who lends money or extends credit

from placing insurance on real or personal property in the event the mortgagor, borrower, or

purchaser has failed to provide required insurance in accordance with the terms of the loan or

credit document;

(viii) Nothing contained in this section shall apply to credit life or credit accident and

health insurance.

(10) Notice of free choice of insurance producer or insurer. - Every debtor, borrower, or

purchaser of property with respect to which insurance of any kind on the property is required in

connection with a debt or loan secured by the property or in connection with the sale of the

property, shall be informed in writing by the builder, creditor, lender, or seller, of his or her right

of free choice in the selection of the insurance producer and insurer through or by which the

insurance is to be placed. There shall be no interference, either directly or indirectly, with the

borrower's, debtor's, or purchaser's free choice of an insurance procedure and of an insurer which

complies with the requirements of this section, and the builder, creditor, lender, seller, owner, or

contractor shall not refuse the policy tendered by the borrower, debtor, purchaser, contractor, or

subcontractor. Upon notice of any refusal of the tendered policy, the insurance commissioner

shall order the builder, creditor, lender, seller, owner, or contractor to accept the tendered policy,

if the commissioner determines that the refusal is not in accordance with the requirements of this

section. Failure to comply with an order of the insurance commissioner shall be deemed a

violation of this section;

(11) Using insurance information to detriment of another. - Whenever the instrument

requires that the purchaser, mortgagor, or borrower furnish insurance of any kind on real property

being conveyed or is collateral security to a loan, the mortgagee, vendor, or lender shall refrain

from disclosing or using any and all insurance information to his or her or its own advantage and

to the detriment of either the borrower, purchaser, mortgagor, insurance company, or agency

complying with the requirements relating to insurance;

(12) Prohibited group enrollments. - No insurer shall offer more than one group policy of

insurance through any person unless that person is licensed, at a minimum, as an insurance

producer. This prohibition shall not apply to employer-employee relationships, or to any of these

enrollments;

(13) Failure to maintain complaint handling procedures. - No insurer shall fail to

maintain a complete record of all the complaints it received since the date of its last examination

pursuant to the general laws providing for examination of insurers. This record shall indicate the

total number of complaints, their classification by line of insurance, the nature of each complaint,

the disposition of each complaint, and the time it took to process each complaint. For the

purposes of this subsection, "complaint" means any written communication primarily expressing

a grievance;

(14) Misrepresentation in insurance applications. - Making false or fraudulent statements

or representations on or relative to an application for a policy, for the purpose of obtaining a fee,

commission, money, or other benefit from any insurers, insurance producer, or individual person;

and

(15) Requiring that repairs be made to an automobile at a specified auto body repair shop

or interfering with the insured's or claimant's free choice of repair facility. - The insured or

claimant shall be promptly informed by the insurer of his or her free choice in the selection of an

auto body repair shop. Once the insured or claimant has advised the insurer that an auto body

repair shop has been selected, the insurer may not recommend that a different auto body repair

shop be selected to repair the automobile. An auto body repair shop may file a complaint with the

department of business regulation alleging a violation of this subdivision (15). Whenever the

department of business regulation has reason to believe that an insurer has violated this

subdivision (15), the department shall conduct an investigation and may convene a hearing. A

complaint filed by an auto body repair shop must be accompanied by a statement written and

signed by the insured or claimant setting forth the factual basis of the complaint, and the insured

or claimant must voluntarily appear and testify at any administrative proceedings on the

complaint.

(16) Requiring that motor vehicle glass repair be made at a specified motor vehicle glass

repair shop or interfering with the insured's or claimant's free choice of a licensed repair facility.

The insured or claimant shall be promptly informed by the insurer of his or her free choice in the

selection of a licensed motor vehicle glass repair shop. The insurer shall not require a person to

use or employ unfair or deceptive acts or practices, threaten, coerce, or intimidate to induce a

person to use or select a particular licensed motor vehicle glass repair shop to provide motor

vehicle glass repair services. An insurer shall not knowingly contract with, refer motor vehicle

glass repair services to, or otherwise negotiate with an unlicensed motor vehicle glass repair shop,

as defined in chapter 38.5 of title 5. Once the insured or claimant has advised the insurer that a

motor vehicle glass repair shop has been selected, the insurer may not recommend that a different

motor vehicle glass repair shop be selected to repair the motor vehicle glass, and an insurer shall

not assign or dispatch the repair work or forward a related policy or policyholder's contact or

repair scheduling information to a different licensed motor vehicle glass repair shop without the

knowledge and consent of the insured. An insured may at any point in time elect to change the

insured's choice of licensed motor vehicle glass repair shop. However, an insurer authorized to

conduct business in the state may provide directly, or through other means, including electronic

transmissions, specific, truthful and non-deceptive information regarding the features and benefits

available to the insured under the policy to assist the insured in selecting a licensed motor vehicle

glass repair shop or scheduling a licensed motor vehicle glass repair shop to perform motor

vehicle glass repair, or enter into any preferred provider agreements and/or participate in direct

repair programs or direct repair networks with licensed motor vehicle glass repair shops. A motor

vehicle glass repair shop may file a complaint with the department of business regulation alleging

a violation of subsection (16) of this section. Whenever the department of business regulation has

reason to believe that an insurer has violated subsection (16) of this section, the department shall

conduct an investigation and may convene a hearing. A complaint filed by a motor vehicle glass

repair shop must be accompanied by a statement written and signed by the insured or claimant

setting forth the factual basis of the complaint, and the insured or claimant must voluntarily

appear and testify at any administrative proceedings on the complaint.

SECTION 3. This act shall take effect on January 1, 2016.

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LC001242/SUB B

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