House File 2540 - ReprintedA Bill ForAn Act 1relating to the sale of travel insurance.
1   Section 1.  NEW SECTION.  515K.1  Short title.
   2This chapter shall be known and may be cited as the “Travel
3Insurance Model Act”
4   Sec. 2.  NEW SECTION.  515K.2  Definitions.
   5As used in this chapter, unless the context otherwise
   71.  “Aggregator site” means an internet site that provides
8access to information regarding insurance products, including
9product and insurer information, that is obtained from more
10than one insurer for use by consumers in comparison shopping.
   112.  “Blanket travel insurance” means a policy of travel
12insurance issued to any eligible group that provides coverage
13for specific classes of persons as defined in the policy, with
14coverage provided to all members of the eligible group without
15a separate charge to individual members of the eligible group.
   163.  “Cancellation fee waiver” means a contractual agreement
17between a supplier of travel services and the supplier’s
18customers to waive some or all of the nonrefundable
19cancellation fee provisions of the supplier’s underlying travel
20contract with or without regard to the reason for cancellation
21or to the form of reimbursement. A cancellation fee waiver
22shall not be considered insurance.
   234.  “Commissioner” means the commissioner of insurance.
   245.  “Designated responsible producer” means an employee of
25a limited lines travel insurance producer who is a licensed
26individual insurance producer and who is designated by the
27limited lines travel insurance producer as the individual
28responsible for compliance with the travel insurance laws and
29regulations applicable to the limited lines travel insurance
30producer and the limited lines travel insurance producer’s
   326.  “Eligible group” means two or more persons who
33are engaged in a common enterprise, or have an economic,
34educational, or social affinity or relationship, including but
35not limited to any of the following:
   1a.  An entity engaged in the business of providing travel
2or travel services, including but not limited to a tour
3operator, a lodging provider, a vacation property owner, a
4hotel, a resort, a travel club, a travel agency, a property
5manager, a cultural exchange program, and a common carrier or
6the operator, owner, or lessor of a means of transportation
7of passengers including but not limited to an airline, a
8cruise line, a railroad, a steamship company, and a public bus
9carrier, where with regard to any particular travel or type of
10travel or travelers, all members or customers have a common
11exposure to risk attendant to such travel.
   12b.  A college, school, or other institution of learning,
13covering students, teachers, employees, and volunteers of the
14college, school, or other institution of learning.
   15c.  An employer, covering any group of employees, volunteers,
16contractors, and members of the employer’s board of directors;
17and all dependents and guests of an employee, a volunteer, a
18contractor, or a member of the employer’s board of directors.
   19d.  A sports team, sports camp, or a sponsor of a sports
20team or sports camp, covering participants, members, campers,
21employees, officials, supervisors, or volunteers of the sports
22team, sports camp, or the sponsor of a sports team or sports
   24e.  A religious, charitable, recreational, educational,
25or civic organization, covering any group of members,
26participants, or volunteers of the religious, charitable,
27recreational, educational, or civic organization or a branch
   29f.  A financial institution, a financial institution vendor,
30or a parent holding company, trustee, agent of, or agent
31designated by, one or more financial institutions or financial
32institution vendors, including account holders, credit card
33holders, debtors, guarantors, or purchasers.
   34g.  An incorporated or unincorporated association, including
35a labor union, that has a common interest, a constitution, and
-2-1bylaws; and that is organized and maintained in good faith for
2a purpose other than obtaining insurance for the members or
3participants of the association.
   4h.  A trust or a trustee of a fund established, created, or
5maintained for the benefit of and covering members, employees,
6or customers, and that is subject to the commissioner
7permitting the use of a trust and the premium tax provisions
8under section 515K.8, of one or more associations meeting the
9requirements under paragraph “g”.
   10i.  An entertainment production company covering any group
11of participants, volunteers, audience members, contestants, or
   13j.  A volunteer fire department, ambulance or rescue
14organization, first aid organization, civil defense
15organization, and similar volunteer organizations.
   16k.  A preschool, or a day care facility for children or
   18l.  An organization for senior citizens.
   19m.  An automobile or truck rental or leasing company that
20covers a group of individuals who may become renters, lessees,
21or passengers as defined by an individual’s travel status on
22the rented or leased automobile or truck. The common carrier,
23the operator, owner, or lessor of a means of transportation,
24or the automobile or truck rental or leasing company is the
25policyholder under a policy to which this chapter applies.
   26n.  Any other group, as determined by the commissioner by
27rule, that the members are engaged in a common enterprise,
28or have an economic, educational, or social affinity or
29relationship, and for which issuance of a travel insurance
30policy is not contrary to the public interest.
   317.  “Fulfillment materials” means documentation sent to
32the purchaser of a travel protection plan that confirms the
33purchase and that provides details of the travel protection
34plan coverage and the travel assistance services.
   358.  “Group travel insurance” means travel insurance that is
-3-1issued to an eligible group.
   29.  “Limited lines travel insurance producer” means any of the
   4a.  A licensed managing general agent or a licensed
5third-party administrator.
   6b.  A licensed insurance producer, including a licensed
7limited lines producer.
   8c.  A travel administrator.
   910.  “Offer and disseminate” means to provide general
10information regarding travel insurance or a travel protection
11plan, including a description of the coverage and price, and
12to process an application and collect premiums for travel
13insurance or a travel protection plan.
   1411.  “Primary certificate holder” means an individual who has
15elected and purchased travel insurance under a group policy.
   1612.  “Primary policyholder” means an individual who has
17elected and purchased individual travel insurance.
   1813.  “Travel administrator” means a person who directly
19or indirectly underwrites, collects charges, collateral, or
20premiums from, or adjusts or settles claims on, residents
21of this state in connection with travel insurance. “Travel
shall not include a person whose only actions
23that would otherwise cause the person to be considered a travel
24administrator are any of the following:
   25a.  A person that works for a travel administrator to
26the extent that the person’s activities are subject to the
27supervision and control of the travel administrator.
   28b.  A person that is an insurance producer and who sells
29insurance or is engaged in administrative and claims-related
30activities within the scope of the person’s producers license.
   31c.  A person that is a travel retailer that offers and
32disseminates travel insurance and that is registered under the
33license of a limited lines travel insurance producer.
   34d.  An individual who adjusts or settles claims in the
35normal course of the individual’s practice or employment as
-4-1an attorney and who does not collect charges or premiums in
2connection with insurance coverage.
   3e.  A business entity that is affiliated with a licensed
4insurer while acting as a travel administrator for the direct
5and assumed insurance business of an affiliated insurer.
   614.  “Travel assistance services” means a non-insurance,
7non-insurance-related service for which a consumer is not
8indemnified based on a fortuitous event and for which provision
9of the service does not result in the transfer or shifting of
10risk that constitutes the business of insurance, including but
11not limited to any of the following services:
   12a.  Security advisories.
   13b.  Destination information.
   14c.  Vaccination and immunization information services.
   15d.  Travel reservation services.
   16e.  Entertainment planning.
   17f.  Activity and event planning.
   18g.  Translation assistance.
   19h.  Emergency messaging.
   20i.  International legal and medical referrals.
   21j.  Medical case monitoring.
   22k.  Coordination of transportation arrangements.
   23l.  Emergency cash transfer assistance.
   24m.  Medical prescription replacement assistance.
   25n.  Passport and travel document replacement assistance.
   26o.  Lost luggage assistance.
   27p.  Concierge services.
   28q.  Any other service furnished in connection with planned
   3015.  a.  “Travel insurance” means insurance coverage for
31personal risks incident to planned travel including all of the
   33(1)  Interruption or cancellation of a trip or event.
   34(2)  Loss of baggage or personal effects.
   35(3)  Damage to an accommodation or to a rental vehicle.
   1(4)  Sickness, accident, disability, or death occurring
2during travel.
   3(5)  Emergency evacuation.
   4(6)  Repatriation of remains.
   5(7)  Any other contractual obligation to indemnify or pay a
6specified amount to a traveler upon a determinable contingency
7related to travel as approved by the commissioner.
   8b.  “Travel insurance” shall not include a major medical plan
9that provides comprehensive medical protection for a traveler
10for a trip that lasts longer than six months, including a
11traveler who works or resides overseas as an expatriate, or
12any other product that requires a specific insurance producer
   1416.  “Travel protection plan” means a product that provides
15one or more of any of the following:
   16a.  Travel insurance.
   17b.  Travel assistance services.
   18c.  Cancellation fee waivers.
   1917.  “Travel retailer” means a business entity that makes,
20arranges, or offers planned travel and that may offer and
21disseminate travel insurance as a service to the business’s
22customers on behalf of and under the direction of a limited
23lines travel insurance producer.
24   Sec. 3.  NEW SECTION.  515K.3  Licensing and registration —
25limited lines travel insurance producers and travel retailers.
   261.  a.  The commissioner may issue a limited lines travel
27insurance producer license to a person that has filed an
28application for a limited lines travel insurance producer
29license in the form and manner prescribed by the commissioner.
   30b.  A limited lines travel insurance producer must be
31licensed to sell, solicit, or negotiate travel insurance
32through a licensed insurer. A person shall not act as a
33limited lines travel insurance producer, or as a travel
34retailer, unless the person is licensed as a limited lines
35travel insurance producer or is registered as a travel
   22.  A travel retailer may offer and disseminate travel
3insurance under a limited lines travel insurance producer’s
4license only if all of the following conditions are satisfied:
   5a.  The travel retailer or the limited lines travel insurance
6producer provides all of the following to a purchaser of travel
   8(1)  A description of the material terms, or the actual
9material terms, of the travel insurance coverage.
   10(2)  A description of the claim filing process.
   11(3)  A description of the review and cancellation process.
   12(4)  The identity of, and the contact information for, the
13insurer and the limited lines travel insurance producer.
   14b.  (1)  Beginning on the date of licensure, a limited
15lines travel insurance producer shall establish and maintain
16a register, in the form and manner prescribed by the
17commissioner, of each travel retailer that offers travel
18insurance on behalf of the limited lines travel insurance
19producer. The register shall include all of the following
   21(a)  The name, address, and contact information of each
22travel retailer.
   23(b)  The name, address, and contact information of an
24officer or other individual who directs or controls each travel
25retailer’s operations.
   26(c)  Each travel retailer’s federal tax identification
   28(2)  A limited lines travel insurance producer shall submit
29the register under subparagraph (1) to the commissioner upon
30the commissioner’s reasonable request, and shall certify that
31the register complies with 18 U.S.C. §1033.
   32(3)  Provisions under Title XIII, subtitle 1, that are
33applicable to the suspension or revocation of a resident
34insurance producer’s license, or to the imposition of penalties
35on a resident insurance producer, shall be applicable to
-7-1limited lines travel insurance producers and travel retailers.
   2c.  The limited lines travel insurance producer has a
3designated responsible producer.
   4d.  The designated responsible producer, president,
5secretary, treasurer, and any other officer or individual
6who directs or controls the limited lines travel insurance
7producer’s insurance operations has complied with all
8fingerprinting requirements applicable to insurance producers
9in this state.
   10e.  The limited lines travel insurance producer has paid all
11licensing fees required by state law.
   12f.  The limited lines travel insurance producer requires
13each employee and each authorized representative of the travel
14retailer who offers and disseminates travel insurance to
15successfully complete a training program that, at a minimum,
16educates each employee and each authorized representative on
17the details of each type of insurance offered by the travel
18retailer, ethical sales practices, and all disclosures that are
19required to be made to prospective purchasers.
   203.  A travel retailer that offers and disseminates travel
21insurance shall make brochures or other written materials
22that have been approved by the travel insurer available
23to prospective purchasers. The brochures or other written
24materials shall, at a minimum, do all of the following:
   25a.  Provide the name, address, and telephone number of the
26insurer and the limited lines travel insurance producer.
   27b.  Explain that the purchase of travel insurance by the
28prospective purchaser is not required in order to purchase any
29other product or service from the travel retailer.
   30c.  Explain that a travel retailer that is not licensed as
31an insurance producer is only permitted to provide general
32information about travel insurance offered by the travel
33retailer, including a description of the coverage and price;
34however, the travel retailer is not qualified or authorized
35to answer technical questions about the terms and conditions
-8-1of the travel insurance, or to evaluate the adequacy of the
2prospective purchaser’s existing insurance coverage.
   34.  A travel retailer’s employee or authorized
4representative who is not licensed as an insurance producer
5shall not do any of the following:
   6a.  Evaluate or interpret the technical terms, benefits,
7or conditions of travel insurance offered to a prospective
   9b.  Evaluate or provide advice on a prospective purchaser’s
10existing insurance coverage.
   11c.  Represent themselves as a licensed insurer, a licensed
12insurance producer, or as an insurance expert.
   135.  Notwithstanding any other provision of law to the
14contrary, a travel retailer whose insurance-related activities
15and the insurance-related activities of the travel retailer’s
16employees and authorized representatives are limited to
17offering and disseminating travel insurance on behalf of
18and under the direction of a limited lines travel insurance
19producer in compliance with this chapter, shall be authorized
20to receive related compensation if the travel retailer is
21included in the register maintained by the limited lines travel
22insurance producer under subsection 2, paragraph “b”.
   236.  As an insurer’s designee, a limited lines travel
24insurance producer shall be responsible for the acts of each
25travel retailer that offers and disseminates travel insurance
26under the limited lines travel insurance producer’s license and
27shall use reasonable means to ensure that each travel retailer
28complies with this chapter.
   297.  A person that is licensed as an insurance producer in a
30major line of authority shall be authorized to sell, solicit,
31and negotiate travel insurance. A property and casualty
32insurance producer shall not be required to become appointed
33by an insurer in order to sell, solicit, or negotiate travel
35   Sec. 4.  NEW SECTION.  515K.4  Travel protection plans.
   1A travel protection plan may be offered in this state at one
2price for all features included in the travel protection plan
3if all of the following are true:
   41.  The travel protection plan clearly discloses to the
5purchaser, at or prior to the time of purchase, that the travel
6protection plan includes, as applicable, travel insurance,
7travel assistance services, and cancellation fee waivers.
   82.  A purchaser is provided with an opportunity at or prior
9to the time of purchase to obtain additional details regarding
10each feature and the cost of each feature.
   113.  The fulfillment materials provided to the purchaser do
12all of the following:
   13a.  Describe and delineate the travel insurance, travel
14assistance services, and cancellation fee waivers included in
15the travel protection plan.
   16b.  Include, as applicable, travel insurance disclosures
17and the contact information for all persons providing travel
18assistance services and cancellation fee waivers.
19   Sec. 5.  NEW SECTION.  515K.5  Sales and marketing practices.
   201.  All persons offering travel insurance to residents of
21this state shall be subject to sections 507B.3 and 507B.4,
22except as otherwise provided in this section. In the event of
23a conflict between this chapter and another provision under
24Title XIII, subtitle 1, regarding the sale and marketing of
25travel insurance and travel protection plans, this chapter
26shall control.
   272.  a.  Any document provided to a prospective purchaser
28prior to the prospective purchaser’s purchase of travel
29insurance, including but not limited to sales, advertising,
30and marketing materials, shall be consistent with the
31travel insurance policy, including but not limited to forms,
32endorsements, policies, rate filings, and certificates of
   34b.  If a travel insurance policy or a travel insurance
35certificate contains any preexisting condition exclusion, a
-10-1prospective purchaser shall, any time prior to the time of
2purchase, be provided an opportunity to learn more about the
3preexisting condition exclusion. Any preexisting condition
4exclusion information shall also be included in the travel
5insurance policy or travel insurance certificate fulfillment
   7c.  The fulfillment materials and the information described
8in section 515K.3, subsection 2, paragraph “a”, subparagraphs
9(1) through (4) shall be provided to a primary policyholder
10or to a primary certificate holder as soon as practicable
11following the policyholder’s or the certificate holder’s
12purchase of a travel protection plan. Unless an insured has
13either started a covered trip or filed a claim under the travel
14insurance coverage, a policyholder or certificate holder may
15cancel a policy or certificate for a full refund of the travel
16protection plan price from the date of purchase of a travel
17protection plan until at least fifteen days following the
18date of delivery of the travel protection plan’s fulfillment
19materials by postal mail, or ten days following the date
20of delivery of the travel protection plan’s fulfillment
21materials by means other than postal mail. For purposes
22of this paragraph, “delivery” means handing fulfillment
23materials to the policyholder or certificate holder or sending
24fulfillment materials by postal mail or electronic means to the
25policyholder or certificate holder.
   26d.  An insurer shall disclose in the policy documentation
27and fulfillment materials provided to the purchaser of travel
28insurance whether the travel insurance is primary or secondary
29to any other applicable insurance coverage.
   30e.  If travel insurance is marketed directly to consumers
31through an insurer’s internet site, or by another person via
32an aggregator site, it shall not be an unfair trade practice
33or other violation of law for the insurer or the other person
34to provide an accurate summary or short description of the
35available insurance coverage, if all provisions of each
-11-1available travel insurance policy are accessible to consumers
2via electronic means.
   33.  No person shall offer, solicit, or negotiate travel
4insurance or a travel protection plan on an individual or group
5basis through use of a negative option or an opt out that
6requires a consumer to take an affirmative action to deselect
7coverage, such as unchecking a box on an electronic form when
8the consumer purchases a trip.
   94.  It shall be an unfair trade practice pursuant to section
10507B.3 and section 507B.4 to do any of the following:
   11a.  Offer or sell a travel insurance policy that, due to an
12exclusion or other provisions in the policy, cannot result in
13payment of any claim made by any insured under the policy.
   14b.  Market blanket travel insurance coverage as no cost
   165.  If a consumer’s travel destination is located in a
17jurisdiction that mandates specific insurance coverage, it
18shall not be an unfair trade practice to require that the
19consumer, as a condition of purchasing a travel package, select
20one of the following options:
   21a.  Purchase of the coverage required by the destination
22jurisdiction through either the travel retailer or the limited
23lines travel insurance producer that provides the travel
   25b.  Agree to obtain and provide proof of coverage that
26meets the destination jurisdiction’s requirements prior to the
27consumer’s departure.
28   Sec. 6.  NEW SECTION.  515K.6  Travel administrators.
   291.  Notwithstanding any provision of Title XIII, subtitle
301, to the contrary, a person shall not act as, or represent
31itself as, a travel administrator for travel insurance in this
32state unless the person meets at least one of the following
   34a.  The person is a licensed property and casualty insurance
35producer in this state.
   1b.  The person is in compliance with all laws and regulations
2that are applicable to managing general agents in this state.
   3c.  The person is in compliance with all laws and regulations
4that are applicable to third-party administrators in this
   62.  An insurer shall be responsible for the acts of a travel
7administrator administering travel insurance underwritten by
8the insurer, and for ensuring that the travel administrator
9maintains all records related to the insurer and makes the
10records available to the commissioner upon request of the
12   Sec. 7.  NEW SECTION.  515K.7  Rates, forms, eligibility, and
   141.  Notwithstanding any provision of Title XIII, subtitle 1,
15to the contrary, travel insurance shall be classified and filed
16for purposes of rates and forms under an inland marine line of
17insurance provided that travel insurance that provides coverage
18for sickness, accident, disability or death occurring during
19travel, either exclusively, or in conjunction with related
20coverages of emergency evacuation or repatriation of remains,
21or incidental limited property and casualty benefits such as
22baggage or trip cancellation, may be filed under either an
23accident and health line of insurance or an inland marine line
24of insurance.
   252.  Travel insurance may be issued in the form of an
26individual insurance policy, a group travel insurance policy,
27or a blanket travel insurance policy.
   283.  Eligibility and underwriting standards for travel
29insurance may be developed and provided based on travel
30protection plans designed for individual or identified
31marketing or distribution channels, provided that the standards
32also meet the state’s underwriting standards for the line of
34   Sec. 8.  NEW SECTION.  515K.8  Tax on gross premiums.
   351.  An insurer that offers travel insurance shall pay tax
-13-1on gross premiums, as provided in section 432.1, on travel
2insurance premiums paid by any of the following:
   3a.  A primary policyholder who is a resident of this state.
   4b.  A primary certificate holder who is a resident of this
   6c.  A blanket travel insurance policyholder that is a
7resident of this state, or that has the policyholder’s
8principal place of business or the principal place of business
9of an affiliate or subsidiary that has purchased blanket
10travel insurance in this state for eligible blanket group
11members, subject to any apportionment rules that apply to the
12insurer across multiple taxing jurisdictions, or that permit
13the insurer to allocate premiums on an apportioned basis in a
14reasonable and equitable manner in those taxing jurisdictions.
   152.  An insurer that offers travel insurance shall do all of
16the following:
   17a.  Document the state of residence or the state of the
18principal place of business of the primary policyholder or
19primary certificate holder.
   20b.  Report as premiums only the amount allocable to travel
21insurance, and not report any amounts received from travel
22assistance services or cancellation fee waivers.
23   Sec. 9.  NEW SECTION.  515K.9  Applicability.
   241.  This chapter shall apply to travel insurance that covers
25any resident of this state, and travel insurance that is sold,
26solicited, negotiated, or offered in this state, and to any
27travel insurance policy or certificate that is delivered or
28issued for delivery in this state. This chapter shall not
29apply to cancellation fee waivers or to travel assistance
30services except as expressly provided in this chapter.
   312.  All applicable provisions of Title XIII, subtitle 1,
32shall apply to travel insurance except that specific provisions
33of this chapter shall supersede any general provisions of Title
34XIII, subtitle 1, that are otherwise applicable to travel
1   Sec. 10.  NEW SECTION.  515K.10  Rules.
   2The commissioner may adopt rules pursuant to chapter 17A as
3necessary to implement and administer this chapter.