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HOUSE AMENDED
PRIOR PRINTER'S NO. 704
PRINTER'S NO. 1635
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
630
Session of
2017
INTRODUCED BY RESCHENTHALER, SCARNATI, BREWSTER, VULAKOVICH,
STEFANO, MENSCH, BARTOLOTTA, KILLION, VOGEL, COSTA, WHITE,
YUDICHAK, BOSCOLA, TARTAGLIONE, WAGNER, BLAKE AND McGARRIGLE,
APRIL 17, 2017
AS REPORTED FROM COMMITTEE ON INSURANCE, HOUSE OF
REPRESENTATIVES, AS AMENDED, APRIL 9, 2018
AN ACT
Providing for the licensure of limited lines travel insurance
producers, for requirements for sale of travel insurance, for
authority of limited lines travel insurance producers, for
registration and training of travel retailers and for renewal
of license.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Short title.
This act shall be known and may be cited as the Travel
Insurance Modernization Act.
Section 2. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Application." As defined in section 601-A of the Insurance
Department Act.
"Business entity." A person that is not an individual.
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"Commissioner." The Insurance Commissioner of the
Commonwealth.
"Customer." A person who purchases travel services or travel
insurance.
"Department." The Insurance Department of the Commonwealth.
"Designated licensee." As defined in section 601-A of the
Insurance Department Act.
"Enrolled customer." A customer who elects coverage under a
travel insurance policy.
"Insurance Department Act." The act of May 17, 1921
(P.L.789, No.285), known as The Insurance Department Act of
1921.
"Insurer." As defined in section 601-A of the Insurance
Department Act.
"Limited lines travel insurance producer." A person licensed
to sell, solicit or negotiate a contract of travel insurance.
"Location." A physical location in this Commonwealth or an
Internet website, call center site or similar location provided
to residents of this Commonwealth.
"Negotiate." To confer directly with or to offer advice
directly to a customer or prospective customer of a particular
contract of insurance concerning the substantive benefits, terms
or conditions of the contract, provided that the person engaged
in that act either sells insurance or obtains insurance from
insurers for customers.
"Offer and disseminate." To provide general information,
including a description of the coverage and price, as well as
processing an application for travel insurance, collecting
premiums and performing other activities for which no insurance
license is required.
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"Sell." To exchange a contract of insurance by any means for
money or its equivalent on behalf of an insurance entity.
"Solicit." To attempt to sell insurance or ask or urge a
person to apply for a particular kind of insurance from a
particular insurance entity.
"Travel insurance." Insurance providing coverage for
personal risks incident to planned travel. The following apply:
(1) The term includes:
(i) Interruption or cancellation of trip or event.
(ii) Loss of baggage or personal effects.
(iii) Damages to accommodations or rental vehicles.
(iv) Sickness, accident, disability or death
occurring during travel.
(2) The term does not include:
(i) A service contract as defined in section 358(b)
of the act of May 17, 1921 (P.L.682, No.284), known as
The Insurance Company Law of 1921.
(ii) A major medical plan that provides
comprehensive medical protection to a traveler with a
trip lasting six months or longer, including a person
working overseas as an expatriate or deployed military
personnel.
"Travel insurance transaction." The sale of travel insurance
to a customer.
"Travel retailer." A business entity that makes, arranges or
offers travel services and that may offer and disseminate travel
insurance as a service to its customers on behalf of and under
the direction of a limited lines travel insurance producer or
under its own license.
Section 3. Licensure of limited lines travel insurance
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producers.
(a) Requirement.--A limited lines travel insurance producer
is required to hold a limited lines travel insurance license to
sell, solicit or negotiate coverage under a policy of travel
insurance.
(b) Limited lines license.--A limited lines license issued
under this act shall authorize a travel retailer registered
under the license of the limited lines insurance producer, and
each employee or authorized representative of the travel
retailer, to offer and disseminate coverage under a policy of
travel insurance to a customer at each location where the travel
retailer or authorized representative engages in travel
insurance transactions and to receive compensation from the
limited lines travel insurance producer for those activities.
(c) License.--Notwithstanding any other provision of law, a
license issued under this section shall authorize the licensee,
a travel retailer registered under the licensee's license and an
employee or authorized representative of the travel retailer to
engage in activities permitted in this section.
Section 4. Requirements for sale of travel insurance.
(a) Authority and licensure.--A travel retailer and each
employee and authorized representative of the travel retailer
may offer and disseminate travel insurance to customers and
shall not be subject to licensure as an insurance producer under
Article VI-A of the Insurance Department Act if:
(1) The limited lines travel insurance producer obtains
a limited lines license.
(2) The limited lines travel insurance producer or
travel retailer provides to each customer of travel
insurance:
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(i) A description of the material terms or actual
material terms of the insurance coverage.
(ii) A description of the process for filing a
claim.
(iii) A description of the review or cancellation
process for the travel insurance policy.
(iv) The identity and contact information of the
travel retailer, insurer and limited lines travel
insurance producer.
(b) Register of travel retailers.--
(1) At the time of licensure, the limited lines travel
insurance producer shall establish and maintain a register of
each travel retailer in this Commonwealth where travel
insurance is offered on the limited lines travel insurance
producer's behalf.
(2) The register shall be maintained and updated
annually by the limited lines travel insurance producer and
shall include:
(i) The name, address and contact information of the
travel retailer.
(ii) The name of the officer or person who directs
or controls the travel retailer's operations.
(iii) The travel retailer's Federal Tax
Identification Number.
(3) INFORMATION IN THE REGISTER REGARDING EACH TRAVEL
RETAILER UNDER PARAGRAPHS (1) AND (2) SHALL BE MAINTAINED FOR
A PERIOD OF AT LEAST THREE YEARS FOLLOWING THE DATE THAT THE
INFORMATION WAS ENTERED INTO THE REGISTER.
(3) (4) The limited lines travel insurance producer
shall submit the register to the department upon request.
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(4) (5) The limited lines travel insurance producer
shall certify that the travel retailer registered complies
with 18 U.S.C. ยง 1033 (relating to crimes by or affecting
persons engaged in the business of insurance whose activities
affect interstate commerce).
(c) List of locations.--A travel retailer shall maintain a
list of the locations in this Commonwealth where it offers and
disseminates travel insurance coverage information and, upon
request, provide the list to the department.
(d) Training.--The insurer issuing the travel insurance must
either directly supervise or authorize a designated licensee to
supervise the administration of a training program, including
the development of the program, for employees and authorized
representatives of the travel retailer which may be subject to
review by the department. The training shall comply with the
following:
(1) The training shall be delivered to employees and
authorized representatives of a travel retailer who are
directly engaged in the activity of offering and
disseminating travel insurance information.
(2) The training may be provided in electronic form. If
conducted in an electronic form, the insurer shall implement
a supplemental education program regarding travel insurance
that is conducted and overseen by the designated licensee.
(3) Each employee and authorized representative, at a
minimum, shall receive basic instruction about the types of
travel insurance offered, ethical sales practices and the
disclosures required under this section.
(e) Written materials.--A travel retailer offering or
disseminating travel insurance shall provide to every
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prospective customer a brochure or other written material that:
(1) Provides the identity and contact information of the
insurer and the limited lines travel insurance producer.
(2) Discloses that travel insurance may provide a
duplication of coverage already provided under insurance
policies that the producer already maintains.
(3) Explains that purchase of travel insurance is not
required in order to purchase any other product or service
from the travel retailer.
(4) Explains that an unlicensed travel retailer is
permitted to provide general information about the insurance
offered by the travel retailer, including a description of
the coverage and price, but is not qualified or authorized to
answer technical questions about the terms and conditions of
insurance coverage, including those coverages that are
already maintained by the customer.
(f) Limitations.--A travel retailer's employee or authorized
representative who is not licensed as a designated licensee may
not:
(1) Evaluate or interpret the technical terms, benefits
and conditions of the offered travel insurance coverage.
(2) Evaluate or provide advice concerning a prospective
customer's existing insurance coverage.
(3) Advertise, represent or otherwise hold himself or
herself out as a licensed insurer, designated licensee or
insurance expert.
(g) Charges.--The charges for travel insurance coverage may
be billed and collected by the travel retailer. A charge to the
enrolled customer for coverage that is not included in the cost
associated with the purchase of travel services shall be
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separately itemized on the enrolled customer's bill. If the
travel insurance coverage is included with the purchase of
travel services, the travel retailer shall clearly and
conspicuously disclose to the enrolled customer that the travel
insurance coverage is included with the purchase of travel
services. The travel retailer that bills and collects the
charges shall not be required to maintain the funds in a
segregated account provided that the travel retailer is
authorized by the insurer to hold the funds in an alternative
manner and remits the amounts to the supervising entity within
60 days of receipt. The funds received by a travel retailer from
an enrolled customer for the sale of travel insurance shall be
considered funds held in trust by the travel retailer in a
fiduciary capacity for the benefit of the insurer.
(h) Compensation.--A travel retailer, whose insurance-
related activities and those of the employees or authorized
representatives are limited to offering and disseminating travel
insurance on behalf of and under the direction and license of a
limited lines travel insurance producer meeting the conditions
stated in this act, is authorized to conduct those activities
and receive related compensation upon registration by the
limited lines travel insurance producer as described in
subsection (b). No travel retailer employee or authorized
representative may be compensated based primarily on the number
of customers of travel insurance coverage, but nothing in this
act shall prohibit payment of compensation to a travel retailer
or its employees or authorized representatives for activities
under the limited lines travel insurance producer's license that
are incidental to the overall compensation of the travel
retailer or its employees or authorized representatives.
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Section 5. Policy.
(a) Offering.--Travel insurance may be offered under an
individual policy or under a group policy.
(b) Eligibility and underwriting standards.--Eligibility and
underwriting standards for customers electing to enroll in
coverage shall be established for each travel insurance program.
Section 6. Responsibility.
As the insurer designee, the limited lines travel insurance
producer and insurer shall be responsible for the acts of the
travel retailer and the travel retailer's employees and
authorized representatives who are not limited lines travel
insurance producers and shall use reasonable means to ensure
compliance with this act by the travel retailer and the travel
retailer's employees and authorized representatives.
Section 7. Enforcement.
(a) Actions by commissioner requiring no notice and
hearing.--If the commissioner determines that a travel retailer
or a travel retailer's employee or authorized representative has
violated any provision of this act, the commissioner may:
(1) Direct the limited lines travel insurance producer
to implement a corrective action plan with the travel
retailer.
(2) Direct the limited lines travel insurance producer
to revoke the authorization of the travel retailer to offer
and disseminate travel insurance on its behalf and under its
license and to remove the travel retailer's name from its
register.
(b) Actions by commissioner requiring notice and hearing.--
If the commissioner determines that a travel retailer or a
travel retailer's employee or authorized representative has
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violated any provision in this act, the commissioner, after
notice and hearing, may:
(1) Suspend or revoke the license of the limited lines
travel insurance producer as authorized under this act or the
registration of the travel retailer.
(2) Impose a monetary penalty on the limited lines
travel insurance producer.
(3) Impose other conditions and penalties as deemed
appropriate by the commissioner, including an order to cease
and desist in the engagement of travel insurance transactions
with a particular travel retailer and a particular employee
or authorized representative of a travel retailer.
(c) Monetary penalties.--In addition to any other action
authorized under this act or other law, a limited lines travel
insurance producer who aids and abets a travel retailer in the
transaction of travel insurance or in any activity concerning
travel insurance after being directed to revoke the travel
retailer's authorization shall be subject to a monetary penalty
under the act of July 22, 1974 (P.L.589, No.205), known as the
Unfair Insurance Practices Act.
(d) Effect of conduct.--For purposes of this act, the
conduct of a travel retailer and its employees and authorized
representatives regarding the offering or dissemination of
travel insurance on behalf of a licensed limited lines travel
insurance producer shall be deemed the conduct of the licensed
limited lines travel insurance producer.
Section 8. Licensing and fees.
(a) Renewal process generally.--An application for licensure
or license renewal under this act shall be processed in
accordance with sections 605-A, 606-A and 608-A of the Insurance
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Department Act.
(b) Amount of fees.--A nonrefundable fee of $400 shall
accompany an application for a limited lines travel insurance
producer license and any license renewal.
(c) Adjustment of fees.--A license fee under subsection (b)
may be adjusted no more than annually by the commissioner upon
publication of the new fee in the Pennsylvania Bulletin.
Section 9. Effective date.
This act shall take effect in 120 days.
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