Bill Text: MI HB4508 | 2019-2020 | 100th Legislature | Introduced
Bill Title: Insurance: other; regulation of travel insurance and annuities; modify, and allow for certain corporate business to meet electronically. Amends secs. 1202, 4151, 4153, 4155, 4158, 4159, 4160, 4165, 5228, 5230 & 5245 of 1956 PA 218 (MCL 500.1202 et seq.) & adds ch. 12b & sec. 4166.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2020-12-31 - Assigned Pa 266'20 With Immediate Effect [HB4508 Detail]
Download: Michigan-2019-HB4508-Introduced.html
HOUSE BILL No. 4508
April 25, 2019, Introduced by Rep. Webber and referred to the Committee on Insurance.
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending section 1202 (MCL 500.1202), as amended by 2016 PA 114,
and by adding chapter 12b.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1202. (1) This chapter does not require an insurer to
obtain an insurance producer license. As used in this section, the
term "insurer" does not include an insurer's officers, directors,
employees, subsidiaries, or affiliates.
(2) A license as an insurance producer is not required of any
of the following:
(a) An officer, director, or employee of an insurer or of an
insurance producer, if the officer, director, or employee does not
receive any commission on policies written or sold to insure risks
residing, located, or to be performed in this state and meets 1 or
more of the following:
(i) The officer's, director's, or employee's activities are
executive, administrative, managerial, clerical, or a combination
of these, and are only indirectly related to the sale,
solicitation, or negotiation of insurance.
(ii) The officer's, director's, or employee's function relates
to underwriting, loss control, inspection, or the processing,
adjusting, investigating, or settling of a claim on a contract of
insurance.
(iii) The officer, director, or employee is acting in the
capacity of a special agent or agency supervisor assisting
insurance producers if the person's activities are limited to
providing technical advice and assistance to licensed insurance
producers and do not include the sale, solicitation, or negotiation
of insurance.
(b) A person who performs and receives no commission for any
of the following services:
(i) Securing and furnishing information for the purpose of
group life insurance, group property and casualty insurance, group
annuities, or group or blanket accident and health insurance.
(ii) Securing and furnishing information for the purpose of
enrolling individuals under plans, issuing certificates under
plans, or otherwise assisting in administering plans.
(iii) Performing administrative services related to mass
marketed property and casualty insurance.
(c) An employer or association or its officers, directors,
employees, or the trustees of an employee trust plan, to the extent
that the employers, officers, employees, directors, or trustees are
engaged in the administration or operation of a program of employee
benefits for the employer's or association's own employees or the
employees of its subsidiaries or affiliates, which program involves
the use of insurance issued by an insurer, if the employers,
associations, officers, directors, employees, or trustees are not
in any manner compensated, directly or indirectly, by the company
issuing the contracts.
(d) Employees of insurers or organizations employed by
insurers who are engaging in the inspection, rating, or
classification of risks, or in the supervision of the training of
insurance producers and who are not individually engaged in the
sale, solicitation, or negotiation of insurance.
(e) A person whose activities in this state are limited to
advertising without the intent to solicit insurance in this state
through communications in printed publications or other forms of
electronic mass media, the distribution of which is not limited to
residents of this state, if the person does not sell, solicit, or
negotiate insurance that would insure risks residing, located, or
to be performed in this state.
(f) A person who is not a resident of this state who sells,
solicits, or negotiates a contract of insurance for commercial
property and casualty risks to an insured with risks located in
more than 1 state insured under that contract, if the person is
otherwise licensed as an insurance producer to sell, solicit, or
negotiate that insurance in the state where the insured maintains
its principal place of business and the contract of insurance
insures risks located in that state.
(g) A salaried full-time employee who counsels or advises his
or her employer concerning the insurance interests of the employer
or of the subsidiaries or business affiliates of the employer, if
the employee does not sell or solicit insurance or receive a
commission.
(h) A person whose only sale of insurance is for travel or
auto-related insurance sold in connection with and incidental to
the rental of a motor vehicle under a rental agreement for a period
not to exceed 90 days.
(i) A person whose only sale of insurance is for portable
electronics insurance sold in connection with and incidental to the
sale of a portable electronic device if written disclosure material
is provided to the customer at the time of solicitation and the
written material includes all of the following:
(i) A disclosure that portable electronics insurance may
duplicate coverage already provided by the customer's homeowners,
renters, or other insurance policies.
(ii) A statement that the enrollment by the customer in a
portable electronics insurance program is not required to purchase
or lease a portable electronic device or services for the device.
(iii) A summary of the material terms of the portable
electronics insurance coverage, including all of the following:
(A) The identity of the insurer.
(B) The amount of any applicable deductible and how it is to
be paid.
(C) The benefits of the coverage.
(D) Key terms and conditions of the coverage, such as whether
the portable electronics may be repaired or replaced with a similar
make and model or reconditioned or nonoriginal manufacturer parts
or equipment.
(iv) A summary of the process for filing a claim, including a
description of how to return a portable electronic device and the
maximum fee applicable if the customer fails to comply with
equipment return requirements.
(v) A statement that the customer may cancel enrollment for
coverage under a portable electronics insurance policy at any time
and that the person paying the premium will receive a refund of or
credit for any unearned premium.
(j) A person whose only sale of insurance is for travel
insurance sold in conjunction with and incidental to planned
travel.
(k) A person whose only sale of insurance is stored property
insurance sold in connection with and incidental to the rental of
storage space in a self-service storage facility under a rental
agreement for a period not to exceed 1 year if written disclosure
material is provided to the customer at the time of solicitation
and the written material includes all of the following:
(i) A disclosure that the stored property insurance may
duplicate coverage already provided by the customer's homeowners,
renters, or other insurance policies.
(ii) A summary of the material terms of the stored property
insurance coverage, including all of the following:
(A) The identity of the insurer.
(B) The benefits of the coverage.
(C) The key terms and conditions of the coverage.
(iii) A summary of the process for filing a claim.
(3) As used in this section:
(a) "Motor vehicle" means a motorized vehicle designed for
transporting passengers or goods.
(b) "Self-service storage facility" means that term as defined
in section 2 of the self-service storage facility act, 1985 PA 148,
MCL 570.522.
(c) "Stored property insurance" means insurance that provides
coverage for the loss of, or damage to, tangible personal property
with an insured value not exceeding $10,000.00 contained in a
storage space located on a self-service storage facility or in
transit during the term of a self-service storage facility rental
agreement and that is provided under a group or master policy
issued to a self-service storage facility for the provision of
insurance to its customers.
(d) "Travel insurance" means, subject to subdivision (e), a
limited lines insurance coverage under section 1201(i) for personal
risk incident to planned travel, including 1 or more of the
following:
(i) Interruption or cancellation of a 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.
(v) Emergency evacuation.
(vi) Repatriation of remains.
(vii) Any other contractual obligations to indemnify or pay a
specified amount to the traveler on determinable contingencies
related to travel as approved by the director.
(e)
Travel insurance "Travel
insurance" does not include major
either of the following:
(i) Major medical plans, which provide comprehensive medical
protection for travelers with trips lasting longer than 6 months,
or
longer, including, for example,
those working or residing
overseas as an expatriate, or military personnel being deployed.
(ii) A product that requires a specific insurance producer's
license.
CHAPTER 12B
TRAVEL INSURANCE
Sec. 1281. This chapter applies to travel insurance that
covers a resident of this state and is sold, solicited, negotiated,
or offered in this state and for which policies and certificates
are delivered or issued for delivery in this state. Except as
otherwise provided in this chapter, this chapter does not apply to
cancellation fee waivers and travel assistance services.
Sec. 1283. As used in this chapter:
(a) "Aggregator site" means a website that provides access to
information regarding insurance products from more than 1 insurer,
including product and insurer information, for use in comparison
shopping.
(b) "Blanket travel insurance" means a policy of travel
insurance issued to any eligible group providing coverage for
specific classes of persons defined in the policy with coverage
provided to all members of the eligible group without a separate
charge to individual members of the eligible group.
(c) "Cancellation fee waiver" means a contractual agreement
between a supplier of travel services and its customer to waive
some or all of the nonrefundable cancellation fee provisions of the
supplier's underlying travel contract with or without regard to the
reason for the cancellation or form of reimbursement. A
cancellation fee waiver is not insurance.
(d) "Eligible group" means 2 or more persons that are engaged
in a common enterprise, or have an economic, educational, or social
affinity or relationship, including, but not limited to, any of the
following:
(i) Persons engaged in the business of providing travel or
travel services, including, but not limited to, tour operators,
lodging providers, vacation property owners, hotels and resorts,
travel clubs, travel agencies, property managers, cultural exchange
programs, and common carriers or the operators, owners, or lessors
of a means of transportation of passengers, including, but not
limited to, airlines, cruise lines, railroads, steamship companies,
and public bus carriers, in which, with regard to any particular
travel or type of travel or travelers, all members or customers of
the group must have a common exposure to risk attendant to the
travel.
(ii) Colleges, schools, or other institutions of learning
covering students, teachers or employees, or volunteers.
(iii) Employers covering a group of employees, volunteers,
contractors, board of directors, dependents, or guests.
(iv) Sports teams, camps, or sponsors of sports teams or camps
covering participants, members, campers, employees, officials,
supervisors, or volunteers.
(v) Religious, charitable, recreational, educational, or civic
organizations or branches of religious, charitable, recreational,
educational, or civic organizations covering any group of members,
participants, or volunteers.
(vi) Financial institutions or financial institution vendors,
or parent holding company, trustee, or agent of or designated by 1
or more financial institutions or financial institution vendors,
including account holders, credit card holders, debtors,
guarantors, or purchasers.
(vii) Incorporated or unincorporated associations, including
labor unions, having a common interest, constitution, and bylaws,
and organized and maintained in good faith for purposes other than
obtaining insurance for members or participants of the association
covering its members.
(viii) A trust or the trustees of a fund established, created,
or maintained for the benefit of and covering members, employees,
or customers, subject to the director's permitting the use of a
trust and the premium tax under section 1285, of 1 or more
associations described in subparagraph (vii).
(ix) Entertainment production companies covering a group of
participants, volunteers, audience members, contestants, or
workers.
(x) Volunteer fire departments, ambulance, rescue, police, or
court, or any first aid, civil defense, or other volunteer groups.
(xi) Preschools, daycare institutions for children or adults,
and senior citizen clubs.
(xii) Automobile or truck rental or leasing companies covering
a group of individuals who may become renters, lessees, or
passengers defined by their travel status on the rented or leased
vehicles. The common carrier, the operator, owner, or lessor of a
means of transportation, or the automobile or truck rental or
leasing company is the policyholder under a policy to which this
subparagraph applies.
(xiii) Any other group as to which the director has determined
that the members are engaged in a common enterprise, or have an
economic, educational, or social affinity or relationship, and that
issuance of the policy would not be contrary to the public
interest.
(e) "Fulfillment materials" means documentation sent to the
purchaser of a travel protection plan confirming the purchase and
providing the travel protection plan's coverage and assistance
details.
(f) "Group travel insurance" means travel insurance issued to
any eligible group.
(g) "Limited lines travel insurance producer" means any of the
following:
(i) A licensed managing general agent or third-party
administrator.
(ii) A licensed insurance producer, including a limited lines
producer.
(iii) A travel administrator.
(h) "Offer and disseminate" means to provide general
information, including a description of the coverage and price, and
process the application and collect premiums.
(i) "Primary certificate holder" means an individual who
elects and purchases travel insurance under a group policy.
(j) "Primary policyholder" means an individual who elects and
purchases individual travel insurance.
(k) "Travel administrator" means a person that directly or
indirectly underwrites; collects charges, collateral, or premiums
for; or adjusts or settles claims on residents of this state in
connection with travel insurance. However, a person is not
considered a travel administrator if the person's only actions that
would otherwise cause it to be considered a travel administrator
are among any of the following:
(i) Working for a travel administrator to the extent that the
person's activities are subject to the supervision and control of
the travel administrator.
(ii) Selling insurance or engaging in administrative
activities and claims-related activities within the scope of an
insurance producer's license.
(iii) Offering and disseminating travel insurance while
registered under the license of a limited lines travel insurance
producer under this chapter.
(iv) Adjusting or settling claims in the normal course of the
individual's practice or employment as an attorney-at-law, while
not collecting charges or premiums in connection with insurance
coverage.
(v) Being affiliated with a licensed insurer while acting as a
travel administrator for the direct and assumed insurance business
of an affiliated insurer.
(l) "Travel assistance services" means noninsurance services
for which the consumer is not indemnified based on a fortuitous
event, and as to which providing the service does not result in the
transfer or shifting of risk that would constitute the business of
insurance. Travel assistance services include, but are not limited
to, security advisories, destination information, vaccination and
immunization information services, travel reservation services,
entertainment, activity and event planning, translation assistance,
emergency messaging, international legal and medical referrals,
medical case monitoring, coordination of transportation
arrangements, emergency cash transfer assistance, medical
prescription replacement assistance, passport and travel document
replacement assistance, lost luggage assistance, concierge
services, and any other service that is furnished in connection
with planned travel. Travel assistance services are not insurance
and not related to insurance.
(m) "Travel insurance" means that term as defined in section
1202.
(n) "Travel protection plans" means plans that provide 1 or
more of the following:
(i) Travel insurance.
(ii) Travel assistance services.
(iii) Cancellation fee waivers.
(o) "Travel retailer" means a business entity that makes,
arranges, or offers planned travel 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.
Sec. 1284. (1) The director may issue a limited lines travel
insurance producer license to an individual or business entity that
has filed with the director an application for a limited lines
travel insurance producer license in a form and manner prescribed
by the director. A limited lines travel insurance producer licensed
under this section may sell, solicit, or negotiate travel insurance
through a licensed insurer. A person shall not act as a limited
lines travel insurance producer or travel insurance retailer unless
the person is properly licensed or registered, respectively.
(2) A travel retailer may offer and disseminate travel
insurance under a limited lines travel insurance producer business
entity license only if all of the following conditions are met:
(a) The limited lines travel insurance producer or travel
retailer provides to purchasers of travel insurance all of the
following:
(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.
(iv) The identity and contact information of the insurer and
limited lines travel insurance producer.
(b) At the time of licensure, the limited lines travel
insurance producer establishes and maintains a register on a form
prescribed by the director of each travel retailer that offers
travel insurance on the limited lines travel insurance producer's
behalf. The register must be maintained and updated by the limited
lines travel insurance producer and 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 producer shall submit the register to the
department on reasonable request. The limited lines travel
insurance producer shall also certify that the travel retailer
registered complies with 18 USC 1033. The grounds for the
suspension or revocation of licenses issued to and the penalties
that apply to resident insurance producers apply to the limited
lines travel insurance producers and travel retailers.
(c) The limited lines travel insurance producer has designated
1 of its employees who is a licensed individual producer as the
designated responsible producer responsible for the compliance with
the travel insurance laws and regulations applicable to the limited
lines travel insurance producer and its registrants.
(d) The designated responsible producer described in
subdivision (c), the president, secretary, or treasurer of the
limited lines travel insurance producer, and any other officer or
person who directs or controls the limited lines travel insurance
producer's insurance operations comply with the fingerprinting
requirements applicable to insurance producers in the resident
state of the limited lines travel insurance producer.
(e) The limited lines travel insurance producer has paid all
applicable licensing fees as set forth in applicable state law.
(f) The limited lines travel insurance 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 that is subject, at
the discretion of the director, to review and approval. The
training material must, at a minimum, contain adequate instructions
on the types of insurance offered, ethical sales practices, and
required disclosures to prospective customers.
(3) A travel retailer that offers or disseminates travel
insurance shall make available to prospective purchasers brochures
or other written materials that have been approved by the travel
insurer. The materials must include information that does all of
the following:
(a) Provides the identity and contact information of the
insurer and the limited lines travel insurance producer.
(b) Explains that the purchase of travel insurance is not
required to purchase any other product or service from the travel
retailer.
(c) Explains that an unlicensed travel retailer is permitted
to provide only 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.
(4) A travel retailer employee or authorized representative,
who is not licensed as an insurance producer, shall not do any of
the following:
(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.
(c) Hold himself, herself, or itself out as a licensed
insurer, licensed producer, or insurance expert.
(5) Notwithstanding any other provision in 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 producer meeting the
conditions under this chapter may receive related compensation on
registration by the limited lines travel insurance producer as
described in subsection (2)(b).
(6) As the insurer designee, the limited lines travel
insurance producer is responsible for the acts of the travel
retailer and shall use reasonable means to ensure compliance by the
travel retailer with this chapter.
(7) A person licensed in a major line of authority as an
insurance producer may sell, solicit, and negotiate travel
insurance. A property and casualty insurance producer is not
required to become appointed by an insurer to sell, solicit, or
negotiate travel insurance.
Sec. 1285. (1) A travel insurer shall pay a premium tax, as
provided in section 1905, on travel insurance premiums paid by any
of the following:
(a) An individual primary policyholder who is a resident of
this state.
(b) A primary certificate holder who is a resident of this
state who elects coverage under a group travel insurance policy.
(c) A blanket travel insurance policyholder that is a resident
in, or has its principal place of business or the principal place
of business of an affiliate or subsidiary that has purchased
blanket travel insurance in, this state for eligible blanket group
members, subject to any apportionment rules that apply to the
insurer across multiple taxing jurisdictions or that permits the
insurer to allocate premium on an apportioned basis in a reasonable
and equitable manner in those jurisdictions.
(2) A travel insurer shall do both of the following:
(a) Document the state of residence or principal place of
business of the policyholder or certificate holder, as required in
subsection (1).
(b) Report as premium only the amount allocable to travel
insurance and not any amounts received for travel assistance
services or cancellation fee waivers.
Sec. 1286. Travel protection plans may be offered for 1 price
for the combined features that the travel protection plan offers in
this state if both of the following conditions are met:
(a) The travel protection plan clearly discloses to the
consumer at or before the time of purchase that it includes travel
insurance, travel assistance services, and cancellation fee
waivers, as applicable, and provides information and an opportunity
at or before the time of purchase for the consumer to obtain
additional information regarding the features and pricing of each.
(b) The fulfillment materials do both of the following:
(i) Describe and delineate the travel insurance, travel
assistance services, and cancellation fee waivers in the travel
protection plan.
(ii) Include the travel insurance disclosures and the contact
information for persons providing travel assistance services and
cancellation fee waivers, as applicable.
Sec. 1287. (1) Except as otherwise provided in this section, a
person that offers travel insurance to residents of this state is
subject to chapter 20. If there is a conflict between this chapter
and other provisions of this act regarding the sale and marketing
of travel insurance and travel protection plans, this chapter
controls.
(2) Offering or selling a travel insurance policy that could
never result in payment of any claims for an insured under the
policy is an unfair trade practice under chapter 20.
(3) All documents provided to consumers before the purchase of
travel insurance, including, but not limited to, sales materials,
advertising materials, and marketing materials, must be consistent
with the travel insurance policy, including, but not limited to,
forms, endorsements, policies, rate filings, and certificates of
insurance.
(4) For travel insurance policies or certificates that contain
preexisting condition exclusions, information and an opportunity to
learn more about the preexisting condition exclusions must be
provided any time before the time of purchase, and in the
coverage's fulfillment materials.
(5) The fulfillment materials and the information described in
section 1284(2)(a) must be provided to a policyholder or
certificate holder as soon as practicable following the purchase of
a travel protection plan. Unless the insured has either started a
covered trip or filed a claim under the travel insurance coverage,
a policyholder or certificate holder may cancel a policy or
certificate for a full refund of the travel protection plan price
from the date of purchase of the travel protection plan until at
least either of the following:
(a) Fifteen days following the date of delivery of the travel
protection plan's fulfillment materials by postal mail.
(b) Ten days following the date of delivery of the travel
protection plan's fulfillment materials by means other than postal
mail.
(6) A company shall disclose in the policy documentation and
fulfillment materials whether the travel insurance is primary or
secondary to other applicable coverage.
(7) If travel insurance is marketed directly to a consumer
through an insurer's website or by others through an aggregator
site, it is not an unfair trade practice or other violation of law
if both of the following apply:
(a) An accurate summary or short description of coverage is
provided on the webpage.
(b) If the consumer has access to the full provisions of the
policy through electronic means.
(8) A person that offers, solicits, or negotiates travel
insurance or travel protection plans on an individual or group
basis shall not use a negative option or opt-out, that would
require a consumer to take an affirmative action to deselect
coverage, such as unchecking a box on an electronic form when the
consumer purchases a trip.
(9) It is an unfair trade practice to market blanket travel
insurance coverage as free.
(10) If a consumer's destination jurisdiction requires
insurance coverage, it is not an unfair trade practice to require
that a consumer choose between any of the following options as a
condition of purchasing a trip or travel package:
(a) Purchasing the coverage required by the destination
jurisdiction through the travel retailer or limited lines travel
insurance producer supplying the trip or travel package.
(b) Agreeing to obtain and provide proof of coverage that
meets the destination jurisdiction's requirements before departure.
(11) As used in this section, "delivery" means handing
fulfillment materials to the policyholder or certificate holder or
sending fulfillment materials by postal mail or electronic means to
the policyholder or certificate holder.
Sec. 1288. (1) Notwithstanding any other provisions of this
act, a person shall not act or represent itself as a travel
administrator for travel insurance in this state unless at least 1
of the following applies:
(a) The person is a licensed property and casualty insurance
producer in this state for activities permitted under that producer
license.
(b) The person holds a valid managing general agent license in
this state.
(c) The person holds a valid third-party administrator license
in this state.
(2) A travel administrator and its employees are exempt from
the licensing requirements of section 1222 for travel insurance it
administers.
(3) An insurer is responsible for both of the following:
(a) The acts of a travel administrator administering travel
insurance underwritten by the insurer.
(b) Ensuring that the travel administrator maintains all books
and records relevant to the insurer to be made available by the
travel administrator to the director on request.
Sec. 1289. (1) Notwithstanding any other provision of this
act, travel insurance is classified and must be filed for purposes
of rates and forms under an inland marine line of insurance.
However, travel insurance that provides coverage for sickness,
accident, disability, or death occurring during travel, either
exclusively or in conjunction with related coverages of emergency
evacuation or repatriation of remains, or incidental limited
property and casualty benefits such as baggage or trip
cancellation, may be filed by an authorized insurer under either an
accident and health line of insurance or an inland marine line of
insurance.
(2) Travel insurance may be in the form of an individual,
group, or blanket policy.
(3) Eligibility and underwriting standards for travel
insurance may be developed and provided based on travel protection
plans designed for individual or identified marketing or
distribution channels, if those standards also meet this state's
underwriting standards for inland marine.
