Text: HSB00261                          Text: HSB00263
Text: HSB00200 - HSB00299               Text: HSB Index
Bills and Amendments: General Index     Bill History: General Index



House Study Bill 262

Bill Text

PAG LIN
  1  1    Section 1.  NEW SECTION.  522A.1  PURPOSE.
  1  2    The purpose of this chapter is to provide for the limited
  1  3 licensing of rental companies when a motor vehicle rental
  1  4 company sells travel or automobile-related insurance products
  1  5 or coverage in connection with and incidental to the rental of
  1  6 vehicles.
  1  7    Sec. 2.  NEW SECTION.  522A.2  DEFINITIONS.
  1  8    As used in this chapter, unless the context otherwise
  1  9 requires:
  1 10    1.  "Commissioner" means the commissioner of insurance
  1 11 appointed pursuant to section 505.2.
  1 12    2.  "Counter employee" means any employee at least eighteen
  1 13 years of age employed by a rental company that offers the
  1 14 products described in this chapter.
  1 15    3.  "Limited licensee" means a person at least eighteen
  1 16 years of age or an entity authorized to sell certain insurance
  1 17 coverages relating to the rental of vehicles.
  1 18    4.  "Rental agreement" means any written agreement setting
  1 19 forth the terms and conditions governing the use of a vehicle
  1 20 provided by a rental company for rental.
  1 21    5.  "Rental company" means any person or entity in the
  1 22 business of primarily providing vehicles intended for the
  1 23 private transportation of passengers to the public under a
  1 24 rental agreement for a period not to exceed ninety days.
  1 25    6.  "Rental period" means the term of the rental agreement.
  1 26    7.  "Renter" means any person obtaining the use of a
  1 27 vehicle from a rental company under the terms of a rental
  1 28 agreement for a period not to exceed ninety days.
  1 29    8.  "Vehicle" means a motor vehicle under section 321.1
  1 30 used for the private transportation of passengers, including
  1 31 passenger vans, minivans, and sport utility vehicles, or used
  1 32 for the transportation of cargo with a gross vehicle weight of
  1 33 less than twenty-six thousand and one pounds and not requiring
  1 34 the operator to possess a commercial driver's license,
  1 35 including cargo vans, pickup trucks, and trucks.
  2  1    Sec. 3.  NEW SECTION.  522A.3  LIMITED LICENSES.
  2  2    1.  Notwithstanding the provisions of chapter 522, the
  2  3 commissioner may issue a limited license to a rental company
  2  4 that has complied with the requirements of this chapter.  The
  2  5 limited license shall authorize the limited licensee to offer
  2  6 or sell insurance with the rental of vehicles.
  2  7    2.  As a prerequisite for issuance of a limited license
  2  8 under this section, a written application for a limited
  2  9 license, which is signed by an officer of the applicant, shall
  2 10 be filed with the commissioner.  The application shall be in a
  2 11 form and contain information prescribed by the commissioner.
  2 12 The application shall include a list of all rental locations
  2 13 where the rental company intends to conduct business.  An
  2 14 updated list shall be provided to the commissioner within
  2 15 thirty business days from any date on which the list is
  2 16 amended.
  2 17    3.  If a provision of this section is violated by a limited
  2 18 licensee, the commissioner may, after notice and a hearing,
  2 19 revoke or suspend a limited license issued under this section,
  2 20 or impose any other penalties, including suspending permission
  2 21 for the transaction of insurance offers or sales at specific
  2 22 rental locations where violations of this section have
  2 23 occurred, as the commissioner deems to be necessary or
  2 24 convenient to carry out the purposes of this section.
  2 25    4.  A rental company licensed pursuant to this section may
  2 26 offer or sell insurance issued by an insurance carrier
  2 27 authorized to do business in this state and only in connection
  2 28 with and incidental to the rental of a vehicle.  A renter
  2 29 shall not be required to purchase coverage in order to rent a
  2 30 vehicle.  The type of insurance offered or sold by a limited
  2 31 licensee, whether at the rental office or by preselection of
  2 32 coverage in a master, corporate, group rental, or individual
  2 33 agreement, may be in any of the following general categories:
  2 34    a.  Personal accident insurance covering the risks of
  2 35 travel, including, but not limited to, accident and health
  3  1 insurance that provides coverage, as applicable, to a renter
  3  2 and other rental vehicle occupants for accidental death or
  3  3 dismemberment and reimbursement for medical expenses resulting
  3  4 from an accident that occurs during the rental period.
  3  5    b.  Liability insurance that provides coverage, as
  3  6 applicable, to a renter and other authorized drivers of rental
  3  7 vehicles for liability arising from the operation of the
  3  8 rental vehicle.
  3  9    c.  Personal effects insurance that provides coverage, as
  3 10 applicable, to a renter and other vehicle occupants for the
  3 11 loss of, or damage to, personal effects that occurs during the
  3 12 rental period.
  3 13    d.  Roadside assistance and emergency sickness protection
  3 14 programs.
  3 15    5.  Insurance shall only be sold by a limited licensee
  3 16 pursuant to this section if all of the following apply:
  3 17    a.  The rental period of the rental agreement does not
  3 18 exceed ninety consecutive days.
  3 19    b.  At every rental location where a rental agreement is
  3 20 executed, brochures or other written materials are readily
  3 21 available to a prospective renter that include all of the
  3 22 following information:
  3 23    (1)  A clear and correct summary of the material terms of
  3 24 coverage offered to renters, including the identity of the
  3 25 insurer.
  3 26    (2)  A disclosure that the coverage offered by the rental
  3 27 company may provide a duplication of coverage already provided
  3 28 by a renter's personal automobile insurance policy,
  3 29 homeowner's insurance policy, personal liability insurance
  3 30 policy, or other source of coverage.
  3 31    (3)  A statement that the purchase by a renter of the types
  3 32 of coverage specified in this section is not required in order
  3 33 to rent a vehicle.
  3 34    (4)  A description of the process for filing a claim in the
  3 35 event a renter elects to purchase coverage and in the event of
  4  1 a claim.
  4  2    c.  Evidence of coverage in the rental agreement is
  4  3 provided to every renter who elects to purchase such coverage.
  4  4    d.  A fee, compensation, or commission is not paid to an
  4  5 employee by a rental company dependent based solely on the
  4  6 sale of insurance under any limited license issued pursuant to
  4  7 this section.
  4  8    6.  Any limited license issued under this section shall
  4  9 authorize a counter employee of the limited licensee to act
  4 10 individually on behalf, and under the supervision, of the
  4 11 limited licensee with respect to the offer and sale of
  4 12 coverage specified in this section.
  4 13    7.  A rental company counter employee must successfully
  4 14 pass an examination covering the insurance products offered
  4 15 for sale by the rental company in connection with and
  4 16 incidental to the rental of vehicles by the rental company.
  4 17 The examination shall be approved and administered by the
  4 18 insurance division or a vendor approved by the insurance
  4 19 division pursuant to section 522A.6.  The counter employee
  4 20 shall file an application with the commissioner for an
  4 21 individual license.  Any application shall be deemed approved
  4 22 unless the commissioner notifies the rental company of the
  4 23 denial or rejection of the application within thirty days of
  4 24 receiving the application.  An application shall not include
  4 25 requirements greater in scope than defined in this section.
  4 26    8.  A limited licensee pursuant to this section shall not
  4 27 be required to treat moneys collected from renters purchasing
  4 28 insurance when renting vehicles as moneys received in a
  4 29 fiduciary capacity, provided that the charges for coverage are
  4 30 itemized and are ancillary to a rental agreement.  The offer
  4 31 or sale of insurance not in conjunction with a rental
  4 32 agreement shall not be permitted.
  4 33    9.  A limited licensee under this section shall not
  4 34 advertise, represent, or otherwise hold itself out or hold any
  4 35 of its employees out as licensed insurers, insurance agents,
  5  1 or insurance brokers.
  5  2    10.  A limited licensee shall not engage in this state in
  5  3 any of the following:
  5  4    a.  A trade practice defined in chapter 507B as, or
  5  5 determined pursuant to section 507B.6 to be, an unfair method
  5  6 of competition or an unfair or deceptive act or practice in
  5  7 the business of insurance.
  5  8    b.  An illegal sales practice or unfair trade practice as
  5  9 defined in rules adopted pursuant to chapter 17A by the
  5 10 commissioner.
  5 11    11.  An individual license, authorization, and
  5 12 certification to offer or sell insurance products under this
  5 13 chapter shall expire when the counter employee's employment
  5 14 terminates with the rental company.
  5 15    Sec. 4.  NEW SECTION.  522A.4  TERM OF LIMITED LICENSE.
  5 16    A limited license issued pursuant to this chapter is valid
  5 17 for three years and may be renewed without examination if the
  5 18 renewal application is received in a timely manner.
  5 19    Sec. 5.  NEW SECTION.  522A.5  FEES.
  5 20    The fee for a limited license and renewal of a limited
  5 21 license is fifty dollars per location.  The fee for a counter
  5 22 employee license shall be ten dollars per counter employee.
  5 23 In no case shall any combined fees exceed five hundred dollars
  5 24 in any calendar year for any one rental company or limited
  5 25 license or licensee or renewal license.
  5 26    Sec. 6.  NEW SECTION.  522A.6  VENDOR QUALIFICATIONS.
  5 27    If a qualified vendor is available, the commissioner shall
  5 28 utilize the qualified vendor closest in proximity to where the
  5 29 counter employee is employed to meet the requirements in
  5 30 section 522A.3.  A vendor shall have at least two years
  5 31 teaching experience relating to the topic of the products
  5 32 described in this chapter.  For purposes of this section, the
  5 33 commissioner may approve a rental company that meets the
  5 34 requirements of this section as a qualifying vendor to
  5 35 administer the requirements in section 522A.3.  In order to
  6  1 qualify as a vendor for purposes of this section, a rental
  6  2 company or other vendor shall do all of the following:
  6  3    1.  Certify any testing to be monitored by management
  6  4 personnel.
  6  5    2.  Require such testing to take place in a separate room
  6  6 from any room in which normal sales transactions occur.
  6  7    3.  Every four months, utilize a separate version of the
  6  8 test designed by the product underwriter for the rental
  6  9 company carrier.
  6 10    4.  Require counter employees to disclose if they were ever
  6 11 previously licensed to transact any kind of insurance in this
  6 12 state or elsewhere.
  6 13    5.  Require counter employees to disclose if any license
  6 14 for insurance was ever refused, suspended, or revoked.
  6 15    Sec. 7.  NEW SECTION.  522A.7  RULES.
  6 16    The commissioner shall adopt rules necessary for the
  6 17 administration of this chapter.  
  6 18                           EXPLANATION
  6 19    This bill creates new Code chapter 522A, which provides for
  6 20 the limited licensure of vehicle rental companies that offer
  6 21 and sell certain types of insurance with the rental of
  6 22 vehicles.
  6 23    The bill provides that a signed, written application must
  6 24 be filed with the commissioner of insurance.  The bill
  6 25 provides that, among other things, the application shall list
  6 26 all intended rental locations of the applicant.  The bill
  6 27 provides that the commissioner may revoke or suspend a limited
  6 28 license or impose other penalties as the commissioner deems
  6 29 necessary for a violation of the provisions of new Code
  6 30 chapter 522A.
  6 31    The bill provides that a limited licensee may offer or sell
  6 32 insurance issued by an insurance carrier authorized to do
  6 33 business in this state and only in connection with and
  6 34 incidental to the rental of a vehicle.  The bill provides that
  6 35 a limited licensee may offer or sell certain personal accident
  7  1 insurance, certain liability insurance, certain personal
  7  2 effects insurance, and roadside assistance and emergency
  7  3 sickness insurance protection programs.
  7  4    The bill provides that a limited license shall only be sold
  7  5 if the rental period does not exceed 90 days, certain
  7  6 information is provided and disclosed to prospective renters,
  7  7 evidence of coverage in the rental agreement is disclosed to
  7  8 every renter who elects to purchase such coverage, and a fee,
  7  9 compensation, or commission is not paid to an employee by a
  7 10 rental company based solely on the sale of insurance.
  7 11    The bill provides that a counter employee of a rental
  7 12 company must successfully pass an examination covering the
  7 13 insurance products offered for sale by the rental company.
  7 14 The bill provides that the examination shall be approved and
  7 15 administered by the insurance division or an approved vendor.
  7 16 The bill provides that a counter employee shall file an
  7 17 application with the commissioner for an individual license.
  7 18 The bill provides that an individual license, authorization,
  7 19 and certification shall expire when the counter employee's
  7 20 employment terminates with the rental company.
  7 21    The bill provides that a limited licensee shall not be
  7 22 required to treat moneys collected from renters purchasing
  7 23 insurance when renting vehicles as moneys received in a
  7 24 fiduciary capacity.
  7 25    The bill prohibits a limited licensee or a counter employee
  7 26 from advertising, representing, or otherwise holding
  7 27 themselves out as a licensed insurer, insurance agent, or
  7 28 insurance broker.
  7 29    The bill requires limited licensees to maintain certain
  7 30 records regarding counter employees and sales records.  The
  7 31 bill prohibits illegal sales practices as defined in the Code
  7 32 and the administrative code.
  7 33    The bill provides that a limited license issued under new
  7 34 Code chapter 522A shall be for a term of three years and cost
  7 35 $50 per location.  The bill provides that the fee for a
  8  1 counter employee license shall be $10.  The bill provides that
  8  2 combined fees shall not exceed $500 in any calendar year.
  8  3    The bill provides that a vendor qualifies to administer
  8  4 examinations to counter employees if the vendor has at least
  8  5 two years teaching experience relating to the topic of
  8  6 insurance products and the vendor meets certain test-taking
  8  7 requirements and requires certain disclosure statements by
  8  8 counter employees.  
  8  9 LSB 3364HC 78
  8 10 tm/jw/5.1
     

Text: HSB00261                          Text: HSB00263
Text: HSB00200 - HSB00299               Text: HSB Index
Bills and Amendments: General Index     Bill History: General Index

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