Bill Text: CA AB2354 | 2011-2012 | Regular Session | Chaptered
Bill Title: Travel insurance.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2012-09-07 - Chaptered by Secretary of State - Chapter 257, Statutes of 2012. [AB2354 Detail]
Download: California-2011-AB2354-Chaptered.html
BILL NUMBER: AB 2354 CHAPTERED
BILL TEXT
CHAPTER 257
FILED WITH SECRETARY OF STATE SEPTEMBER 7, 2012
APPROVED BY GOVERNOR SEPTEMBER 7, 2012
PASSED THE SENATE AUGUST 13, 2012
PASSED THE ASSEMBLY AUGUST 16, 2012
AMENDED IN SENATE JULY 6, 2012
AMENDED IN SENATE JUNE 25, 2012
AMENDED IN SENATE JUNE 4, 2012
AMENDED IN ASSEMBLY APRIL 11, 2012
INTRODUCED BY Assembly Member Solorio
FEBRUARY 24, 2012
An act to amend Sections 1752 and 1757 of, to add Section 1754 to,
to repeal Sections 10295 and 10296 of, and to repeal and add
Sections 1753 and 1755 of, the Insurance Code, relating to travel
insurance.
LEGISLATIVE COUNSEL'S DIGEST
AB 2354, Solorio. Travel insurance.
Existing law authorizes the issuance of limited licenses as travel
insurance agents for employees of railroads, steamships, airlines,
and other organizations engaged in transporting persons as common
carriers and to individuals or employees of persons engaged in
selling transportation on those common carriers.
This bill would revise and recast the provisions related to travel
insurance by, among other things, changing the definition of travel
insurance to delete references to transportation ticket policies in
disability insurance policies and include interruption or
cancellation of a trip or event, loss of baggage or personal effects,
damages to accommodations or rental vehicles, and sickness,
accident, disability, or death occurring during travel. The bill
would authorize the Insurance Commissioner to issue a limited lines
travel insurance agent license to any organization engaged in
transacting travel insurance through travel retailers, as those terms
are defined, and would define a limited lines travel insurance agent
to mean an insurer designee that is licensed to transact travel
insurance. The bill would require the licensed limited lines travel
insurance agent and a travel retailer to follow administrative and
disclosure requirements, such as including the agent's identification
information and making certain disclosures to the consumer in the
marketing materials and fulfillment packages, and requiring the agent
to establish and maintain a register noting each travel retailer
that transacts travel insurance.
Existing law requires that a limited license to sell travel
insurance be applied for and renewed in the same manner as is
provided for a licensee to act as a property broker-agent or a
casualty broker-agent, and that an applicant pay a filing fee, except
that an applicant for a limited license as a travel insurance agent
need not pass a qualifying examination.
This bill would delete those provisions and would instead require
that the applicant for a limited lines travel insurance agent license
file with the Insurance Commissioner a written application for
licensure, signed by the applicant or an officer of the applicant, in
the form prescribed by the commissioner, a certificate by the
insurer on a form prescribed by the commissioner stating, among other
things, that the insurer has satisfied itself that the applicant is
trustworthy and competent to act as its limited lines travel
insurance agent, and an application fee and a renewal fee in an
amount determined by the commissioner as sufficient to defray the
reasonable costs incurred by the department to implement the
provisions of this bill.
The bill would authorize the commissioner to take disciplinary
action against a limited lines travel insurance agent for a violation
of the provisions of the Insurance Code by a travel retailer or a
travel retailer's employee.
The bill would make conforming changes and delete obsolete
provisions.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1752 of the Insurance Code is amended to read:
1752. The commissioner may issue a limited lines travel insurance
agent license to any organization engaged in transacting travel
insurance through travel retailers not otherwise meeting the
conditions set forth in Section 1754.
SEC. 2. Section 1753 of the Insurance Code is repealed.
SEC. 3. Section 1753 is added to the Insurance Code, to read:
1753. As used in this article, the following terms have the
following meanings:
(a) "Limited lines travel insurance agent" means an insurer
designee that is licensed to transact travel insurance, as defined in
subdivision (b).
(b) "Transact" means, for the purposes of this article, the
following activities when engaged in by a travel retailer:
(1) Offering and disseminating information to a prospective or
current policyholder on behalf of a limited lines travel insurance
agent, including brochures, buyer guides, descriptions of coverage,
and price.
(2) Referring specific questions regarding coverage features and
benefits from a prospective or current policyholder to a limited
lines travel insurance agent.
(3) Disseminating and processing applications for coverage,
coverage selection forms, or other similar forms in response to a
request from a prospective or current policyholder.
(4) Collecting premiums from a prospective or current policyholder
on behalf of a limited lines travel insurance agent.
(5) Receiving and recording information from a policyholder to
share with a limited lines travel insurance agent.
(c) (1) "Travel insurance" means insurance coverage for personal
risks incidental to planned travel, including one or more of the
following:
(A) Interruption or cancellation of a trip or event.
(B) Loss of baggage or personal effects.
(C) Damages to accommodations or rental vehicles.
(D) Sickness, accident, disability, or death occurring during
travel.
(2) Travel insurance does not include major medical plans, which
provide comprehensive medical protection for travelers with trips
lasting six months or longer, including for example, those working
overseas as an expatriate or military personnel being deployed.
(3) Travel insurance does not include damage waiver contracts, as
defined in paragraph (5) of subdivision (a) of Section 1936 of the
Civil Code. The phrase "damage waiver" or "collision damage waiver"
cannot be used to describe travel insurance coverage, but the
insurance contract may otherwise refer to "damage waiver" or
"collision damage waiver" provided by a company, as defined in
paragraph (1) of subdivision (a) of Section 1936 of the Civil Code.
(d) "Travel retailer" means a business organization 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 agent.
SEC. 4. Section 1754 is added to the Insurance Code, to read:
1754. Transaction of travel insurance under the license of an
organization holding a limited lines travel insurance agent license
shall be subject to the following conditions:
(a) A limited lines travel insurance agent may authorize a travel
retailer to transact travel insurance on behalf of and under its
authority under the following conditions:
(1) The limited lines travel insurance agent is clearly identified
on marketing materials and fulfillment packages distributed by the
travel retailers to customers. The marketing materials and
fulfillment packages shall include the agent's name, business
address, email address, telephone number, license number, and the
availability of the department's toll-free consumer hotline.
(2) The limited lines travel insurance agent, at the time of
licensure and thereafter, maintains a register noting each travel
retailer that transacts travel insurance on the licensee's behalf.
The register shall be maintained and updated annually by the licensee
in a form prescribed by, or format acceptable to, the commissioner
and shall include the name 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 employer
identification number (FEIN). The licensee shall also certify that
the registered travel retailer complies with Section 1033 of Title 18
of the United States Code. The licensee shall submit the register
for review and inspection upon request by the department.
(3) The limited lines travel insurance agent has designated one of
its employees to be responsible for its compliance with the
insurance laws, rules, and regulations of the state. The limited
lines travel insurance agent and its designated responsible employees
shall hold property, casualty, life-only, and accident and health
agent licenses, to the extent required by this chapter, based upon
the types of insurance transacted by the licensee.
(4) The employee designated by the limited lines travel insurance
agent, pursuant to paragraph (3), and any of the organization's
partners, members, controlling persons, officers, directors, and
managers comply with the background check requirements as required by
the commissioner.
(5) The limited lines travel insurance agent has paid all
applicable licensing fees required under California law.
(6) The limited lines travel insurance agent uses all reasonable
means at its disposal to ensure compliance by the travel retailer and
the travel retailer's employees with their obligations under this
article. This includes requiring each employee of the travel retailer
whose duties include transacting travel insurance to receive
training. The training shall be provided whenever there is a material
change that requires a modification to the training materials, but
in no event less frequently than every three years. Training
materials used by or on behalf of the limited lines travel insurance
agent to train the employees of a travel retailer shall be submitted
to the department at the time the travel insurance agent applies for
a license under this article, and whenever modified thereafter. The
training materials, at a minimum, should contain instruction on the
types of insurance offered, ethical sales practices, and disclosures
to prospective insurance customers. Any changes to previously
submitted training materials shall be submitted to the department
with the changes highlighted 30 days prior to their use by the
limited lines travel insurance agent. Training materials and changes
to those materials submitted to the department pursuant to this
subdivision shall be deemed approved for use by the limited lines
travel insurance agent unless it is notified by the department to the
contrary. Failure by a limited lines travel insurance agent to
submit training materials or changes for departmental review or use
of unapproved or disapproved training materials shall constitute
grounds for denial of an application for a license, nonrenewal of a
license, or suspension of a license, or other action as deemed
appropriate by the commissioner.
(7) The limited lines travel insurance agent or the travel
retailer provides disclosure to the consumer in either the marketing
materials or fulfillment packages that is substantively similar to
the following:
This plan provides insurance coverage that only applies during the
covered trip. You may have coverage from other sources that provides
you with similar benefits but may be subject to different
restrictions depending upon your other coverages. You may wish to
compare the terms of this policy with your existing life, health,
home, and automobile insurance policies. If you have any questions
about your current coverage, call your insurer or insurance agent or
broker.
(8) The limited lines travel insurance agent or the travel
retailer makes all of the following disclosures to the prospective
insured, which shall be acknowledged in writing by the purchaser or
displayed by clear and conspicuous signs that are posted at every
location where contracts are executed, including, but not limited to,
the counter where the purchaser signs the service agreement, or
provided in writing to the purchaser:
(A) That purchasing travel insurance is not required in order to
purchase any other product or service offered by the travel retailer.
(B) If not individually licensed, that the travel retailer's
employee is not qualified or authorized to:
(i) Answer technical questions about the benefits, exclusions, and
conditions of any of the insurance offered by the travel retailer.
(ii) Evaluate the adequacy of the prospective insured's existing
insurance coverage.
(b) A travel retailer that meets the requirements set forth in
this section and whose activities are limited to offering and selling
travel insurance on behalf of a licensed limited lines travel
insurance agent is authorized to receive compensation.
(c) (1) If the commissioner determines that a travel retailer, or
a travel retailer's employee, has violated any provision of this
article or any other provision of this code, the commissioner may:
(A) Direct the limited lines travel insurance agent to implement a
corrective action plan with the travel retailer.
(B) Direct the limited lines travel insurance agent to revoke the
authorization of the travel retailer to transact travel insurance on
its behalf and under its license and to remove the travel retailer's
name from its register.
(2) If the commissioner determines that a travel retailer, or a
travel retailer's employee, has violated any provision in this
article or any other provision of this code, the commissioner, after
notice and hearing, may:
(A) Suspend or revoke the license of the limited lines travel
insurance agent as authorized under this code.
(B) Impose a monetary fine on the limited lines travel insurance
agent.
(3) A limited lines travel insurance agent who aids and abets a
travel retailer in the transaction of travel insurance, as defined in
this code, or aids and abets a travel retailer in any activity
concerning travel insurance after being directed to revoke the travel
retailer's authorization, in addition to any other action authorized
under this code, shall be subject to a monetary penalty pursuant to
paragraphs (2) and (3) of subdivision (a) of Section 12921.8.
(d) The conduct of employees of the travel retailer who have been
designated to transact travel insurance on behalf of the licensed
limited lines travel insurance agent shall be deemed the conduct of
the licensed limited lines travel insurance agent for purposes of
this article.
SEC. 5. Section 1755 of the Insurance Code is repealed.
SEC. 6. Section 1755 is added to the Insurance Code, to read:
1755. (a) An applicant for a limited lines travel insurance agent
license under this article shall submit the following documents to
the commissioner:
(1) A written application for licensure, signed by the applicant
or an officer of the applicant, in the form prescribed by the
commissioner.
(2) A certificate by the insurer that is to be named in the
limited lines travel insurance agent license, stating that the
insurer has satisfied itself that the named applicant is trustworthy
and competent to act as its limited lines travel insurance agent and
that the insurer will appoint the applicant to act as its agent if
the travel insurance agent license applied for is issued by the
commissioner. The certification shall be subscribed by an officer or
managing agent of the insurer on a form prescribed by the
commissioner.
(3) An application fee, and, for each license period thereafter, a
renewal fee, in an amount or amounts determined by the commissioner
as sufficient to defray the reasonable costs incurred by the
department from implementing the provisions of Assembly Bill 2354, as
enacted in the 2011-12 Regular Session of the Legislature.
(b) Notwithstanding any other provision of law to the contrary,
the provisions set forth in Sections 1667, 1668, 1668.5, 1669, 1670,
1738, and 1739 apply to any application for or issuance of a license
pursuant to this article.
(c) Costs associated with any enforcement action shall be paid for
by the person or organization licensed pursuant to this article.
SEC. 7. Section 1757 of the Insurance Code is amended to read:
1757. The commissioner may adopt rules and regulations for the
implementation of this article.
SEC. 8. Section 10295 of the Insurance Code is repealed.
SEC. 9. Section 10296 of the Insurance Code is repealed.
