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