The new law goes into effect on July 1
April 30, 2019: The governors of New Mexico and North Dakota have signed bills that allow self-storage operators to sell tenant insurance. On April 3rd, New Mexico Gov. Michelle Lujan Grisham signed Senate Bill 378(SB 378). It allows 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. HB 1391 allows storage operators to sell tenant insurance with a limited-lines license.
SB 378 allows operators to sell tenant insurance under an individual policy as well as commercial, corporate, group or master policies. 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.”
To acquire the license, operators should follow a certain procedure. They 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.
HB 1391 in North Dakota allows self-storage operators to hold a limited-lines license from the insurance commissioner to sell tenant insurance.
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.