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New Mexico, North Dakota Governors Sign Self-Storage Tenant-Insurance Bills

The governors of New Mexico and North Dakota have signed bills that allow self-storage operators to sell tenant insurance. New Mexico Gov. Michelle Lujan Grisham signed Senate Bill 378 (SB 378) on April 3, giving storage operators the opportunity to become licensed insurance producers under authority of the state insurance superintendent. In North Dakota, House Bill 1391 (HB 1391) was signed on March 28 by Gov. Doug Burgum and allows storage operators to sell tenant insurance with a limited-lines license.

The New Mexico Legislature passed a self-storage tenant insurance limited-lines license bill in 2017, but the measure was never signed by then Gov. Susana Martinez, and became a pocket veto. SB 378 allows operators to sell tenant insurance under an individual policy as well as commercial, corporate, group or master policies.

To obtain a license, operators must provide the insurance superintendent with a complete list of facilities where policies will be offered, along with a list of employees authorized to sell them. The list must be updated annually, kept for three years and made available to the superintendent upon request. Insurers must also maintain a registry of self-storage locations authorized to sell its policies and make it available to the superintendent upon request, according to the bill.

SB 378 prohibits self-storage employees from receiving commissions for selling tenant insurance based on the number of policies sold, unless the compensation would be considered “incidental” to “overall compensation.”

Authorizing insurers must oversee the administration of an operator’s insurance program and provide training to authorized employees who’ll be selling policies to tenants.

The new law goes into effect on July 1.

In North Dakota, HB 1391 allows self-storage operators to hold a limited-lines license from the insurance commissioner to sell tenant insurance. Similarly, the business owner or supervising insurer must maintain a list of locations authorized to sell insurance and provide a copy to the commissioner within five days when requested.

HB 1391 requires self-storage owners to assume responsibility for any representations of the insurance made by employees authorized to sell policies. Similar to the New Mexico legislation, it allows operators to sell tenant insurance under commercial, corporate, individual, group or master policies. It also requires the supervising insurer to help develop and implement a training program and limits the scope of commissions that can be paid to employees selling insurance.

Sources:
New Mexico Legislature, 2019 Regular Session - SB 378
North Dakota Legislative Branch, Bill Actions for HB 1391
SSA Magazine Weekly 4/29/19, Tenant Insurance Bills Signed in New Mexico and North Dakota

TAGS: News Insurance
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