Senate Bill No. 593
(By Senators Tucker and D. Hall)
[Introduced February 14, 2014; referred to the Committee on Banking and Insurance; and then to the Committee on the Judiciary.]
A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new section, designated §33-12-32b, relating to travel insurance limited lines producers; defining terms; authorizing the Insurance Commissioner to issue a limited lines travel insurance producer license; authorizing a travel retailer to offer travel insurance under a limited lines travel insurance producer business entity license under certain conditions; requiring a limited lines travel insurance producer to maintain a register of travel retailers offering insurance on its behalf and to designate one of its employees as a designated responsible producer; requiring instruction or training of employees offering travel insurance on behalf of a limited lines travel insurance producer; providing exemptions from examination and continuing education requirements; requiring travel retailers offering travel insurance to make available written materials to prospective purchasers; prohibiting travel retailer employees who are not licensed as insurance producers from providing certain information; authorizing a travel retailer and its employees to offer travel insurance and to be compensated upon registration by the limited lines travel insurance producer; and providing for enforcement.
Be it enacted by the Legislature of West Virginia:
That the Code of West Virginia, 1931, as amended, be amended by adding thereto a new section, designated §33-12-32b, to read as follows:
ARTICLE 12. INSURANCE PRODUCERS AND SOLICITORS.
§33-12-32b. Travel Insurance Producer Limited License Act.
(a) Short title. -- This section shall be known as the Travel Insurance Producer Business Entity Limited License Act.
(b) Definitions. -- The following words when used in this section have the following meanings:
(1) A “group property travel insurance policy” means the policy issued to:
(A) Any railroad company, steamship company, carrier by air, public bus carrier, or other common carrier of passengers, which is deemed the policyholder, where the policy insures its passengers; or
(B) Any other group where the commissioner has determined in a rule that the members are engaged in a common enterprise, or have an economic or social affinity or relationship, and that the issuance of the policy would not be contrary to the best interests of the public.
(2) “Limited lines travel business entity insurance producer” means a licensed limited lines travel business entity insurance producer designated by an insurer as the travel insurance supervising entity as set forth in subsection (f) of this section.
(3) “Offer and disseminate” means providing general information, including a description of the coverage and price, as well as processing the application, collecting premiums, and performing other activities permitted by the state without a license.
(4) “Travel insurance” means insurance coverage for personal risks incident to planned travel, including but not limited to:
(A) Interruption or cancellation of trip or event;
(B) Loss of baggage or personal effects;
(C) Damages to accommodations or rental vehicles; or
(D) Sickness, accident, disability or death occurring during travel.
Travel insurance does not include major medical plans which provide comprehensive medical protection for travelers with trips lasting six months or longer, including but not limited to, those working overseas as an expatriot or military personnel being deployed.
(5) “Travel retailer” means a business entity that makes, arranges or offers travel services and 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 business entity licensee.
(c) Requirements. -- Notwithstanding any other provision of law:
(1) Notwithstanding any other provision of this chapter, the commissioner may issue to a person that has met the requirements of this section a limited lines travel insurance business entity producer license authorizing the business entity to sell, solicit or negotiate travel insurance through a licensed insurer. Application for a limited lines travel insurance business entity producer license shall be made on a form and in a manner prescribed by the commissioner. The fee for a limited lines travel insurance producer business entity license is $200. A person may only be issued a limited lines insurance business entity producer license under this section.
(2) A travel retailer may offer and disseminate travel insurance under a limited lines travel insurance business entity producer (“licensed business entity”) license only if the following conditions are met:
(A) The travel retailer provides to purchasers of travel insurance:
(i) A description of the material terms or the 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; and
(iv) The identity and contact information of the insurer and the limited lines travel insurance business entity producer.
(B) At the time of licensure, the limited lines travel insurance business entity producer shall establish and maintain a register on a form prescribed by the commissioner of each travel retailer that offers travel insurance on behalf of the limited lines travel insurance business entity producer. The register shall be updated annually by the limited lines travel insurance business entity producer and shall include the name, address and contact information of the travel retailer and an officer or person who directs or controls the travel retailer's operations, and the travel retailer's federal tax identification number. The limited lines travel insurance business entity producer shall submit the register to the commissioner within thirty days upon request. The limited lines travel insurance business entity producer shall also certify that the travel retailer register complies with 18 USC 1033.
(C) The limited lines travel insurance business entity producer has designated one of its employees who is a licensed individual producer as the designated responsible producer responsible for the limited lines travel insurance business entity producer's compliance with the travel insurance laws and rules of the state.
(D) The designated responsible producer, president, secretary, treasurer and any other officer or person who directs or controls the limited lines travel insurance business entity producer's insurance operations comply with the fingerprinting requirements applicable to insurance producers in the resident state of the limited lines travel insurance business entity producer.
(E) The limited lines travel insurance business entity producer has paid all applicable insurance producer business entity licensing fees set forth in state law.
(F) The limited lines travel insurance business entity producer requires each employee and authorized representative of the travel retailer whose duties include offering and disseminating travel insurance to receive a program of instruction or training, which the commissioner may review and approve or disapprove. The training material shall, at a minimum, contain instructions on the types of insurance offered, ethical sales practices, and required disclosures to prospective customers.
(3) A limited lines travel insurance business entity producer, and those registered under its license, are exempt from the examination requirements under section five of this article and the continuing education requirements under section eight of this article.
(4) Any travel retailer offering or disseminating travel insurance shall make available to prospective purchasers brochures or other written materials that:
(A) Provide the identity and contact information of the insurer and the limited lines travel insurance producer;
(B) Explain that the purchase of travel insurance is not required in order to purchase any other product or service from the travel retailer; and
(C) Explain 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 the insurance offered by the travel retailer or to evaluate the adequacy of the customer's existing insurance coverage.
(5) A travel retailer's employee or authorized representative who is not licensed as an insurance producer may not:
(A) Evaluate or interpret the technical terms, benefits and conditions of the offered travel insurance coverage;
(B) Evaluate or provide advice concerning a prospective purchaser's existing insurance coverage; or
(C) Hold himself or herself out as a licensed insurer, licensed producer or insurance expert.
(6) A licensee under this section is subject to the provisions of section six-b of this article as if it were an insurance agency.
(7) The commissioner may, in his or her discretion, fix the dates of expiration for limited lines travel insurance business entity producer licenses in any manner as is considered by him or her to be advisable for an efficient distribution of the work load of his or her office. If the expiration date so fixed would upon first occurrence shorten the period for which license fee has theretofore been paid, no refund of unearned fee shall be made; and if the expiration date so fixed would upon first occurrence lengthen the period for which license fee had theretofore been paid, the commissioner shall charge no additional fee for the lengthened period. If another date is not so fixed by the commissioner, each license shall, unless continued as herein above provided, expire at midnight on June 30 next following the date of issuance. The commissioner shall renew annually on the date as provided in this section the license of the licensee who qualifies and makes application therefor, and has paid the fees set forth in this section.
(8) A limited lines travel insurance business entity producer who allows its license to lapse may, within twelve months from the due date of the renewal fee, reinstate the same license. However, a penalty in the amount of $50 shall be required for any renewal fee received after the due date.
(d) A limited lines travel insurance business entity producer may not act as an agent of an insurer unless the limited lines travel insurance business entity producer becomes an appointed agent of that insurer.
(1) To appoint a limited lines travel insurance business entity producer as its agent, the appointing insurer shall file, in a format approved by the Insurance Commissioner, a notice of appointment within fifteen days from the date the agency contract is executed. An insurer may also elect to appoint a limited lines travel insurance business entity producer to all or some insurers within the insurer's holding company system or group by the filing of a single appointment request.
(2) Upon receipt of the notice of appointment, the Insurance Commissioner shall verify within a reasonable time not to exceed thirty days that the limited lines travel insurance business entity producer is eligible for appointment. If the limited lines travel insurance business entity producer is determined to be ineligible for appointment, the Insurance Commissioner shall notify the insurer within five days of its determination.
(3) An insurer shall pay a nonrefundable appointment processing fee in the amount of $25 for each appointment notification submitted by the insurer to the commissioner.
(4) An insurer shall remit, in a manner prescribed by the Insurance Commissioner, a renewal appointment fee in the amount of $25 no later than midnight on May 31 annually.
(5) Each insurer shall maintain a current list of limited lines travel insurance business entity producers appointed to accept applications on behalf of the insurer. Each insurer shall make a list available to the commissioner upon reasonable request for purposes of conducting investigations and enforcing the provisions of this chapter.
(e) Registration. -- Notwithstanding any other provision of law, a travel retailer whose insurance-related activities, and those of its employees and authorized representatives, are limited to offering and disseminating travel insurance on behalf of and under the direction of a limited lines travel insurance business entity producer meeting the conditions stated in this section, is authorized to do so and to receive related compensation for those services, upon registration by the limited lines travel insurance business entity producer as described in paragraph B, subdivision (2), subsection (c) of this section.
(f) Policy. -- Travel insurance may be provided under an individual policy or under a group or master policy.
(g) Responsibility. -- As the insurer designee, the limited lines travel insurance business entity producer is responsible for the acts of the travel retailer offering and disseminating travel insurance under the limited lines travel insurance business entity producer license and shall use reasonable means to ensure compliance by the travel retailer with this chapter.
(h) Enforcement. -- If a travel retailer or its employee violates any provision of this section, the Insurance Commissioner may do any of the following:
(1) After notice and hearing, impose fines not to exceed $500 per violation or $5,000 in the aggregate for the conduct.
(2) After notice and hearing, impose other or additional penalties that the commissioner deems necessary and reasonable to carry out the purpose of this article, including:
(A) Suspending or revoking the privilege of offering and disseminating travel insurance pursuant to this section at specific business retailers or business retail locations where violations have occurred;
(B) Suspending or revoking the ability of individual employees to act under this section; or
(C) Placing the individual or entity on probation under terms and conditions as prescribed by the commissioner.
(i) If a limited lines travel insurance business entity producer is determined by the Insurance Commissioner to have not performed its required duties under this section or has otherwise violated any provision of this section, it is subject to the administrative actions set forth in section twenty-four of this article.
(j) Effective date. -- This section shall take effect ninety days after enactment.
(NOTE: The purpose of this bill is to authorize the Insurance Commissioner to issue a limited lines travel insurance producer license to a business entity and to allow travel retailers and their employees to offer and disseminate travel insurance under the limited lines travel insurance business entity producer license.
This section is new; therefore, strike-throughs and underscoring have been omitted.)