Bill Text: OH HB331 | 2013-2014 | 130th General Assembly | Introduced
Bill Title: To regulate the licensure of limited lines travel insurance agents in this state.
Sponsorship: Moderate Partisan Bill (Republican 4-1)
Status: (Introduced - Dead) 2013-11-05 - To Insurance [HB331 Detail]
Download: Ohio-2013-HB331-Introduced.html
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Representatives Romanchuk, Letson
Cosponsors:
Representatives Hackett, Adams, J., Sears
| To amend sections 3905.01 and 3905.06 and to enact | 1 |
| section 3905.063 of the Revised Code to regulate | 2 |
| the licensure of limited lines travel insurance | 3 |
| agents in this state. | 4 |
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
| Section 1. That sections 3905.01 and 3905.06 be amended and | 5 |
| section 3905.063 of the Revised Code be enacted to read as | 6 |
| follows: | 7 |
| Sec. 3905.01. As used in this chapter: | 8 |
| (A) "Affordable Care Act" means the "Patient Protection and | 9 |
| Affordable Care Act," 124 Stat. 119, 42 U.S.C. 18031 (2011). | 10 |
| (B) "Business entity" means a corporation, association, | 11 |
| partnership, limited liability company, limited liability | 12 |
| partnership, or other legal entity. | 13 |
| (C) "Home state" means the state or territory of the United | 14 |
| States, including the District of Columbia, in which an insurance | 15 |
| agent maintains the insurance agent's principal place of residence | 16 |
| or principal place of business and is licensed to act as an | 17 |
| insurance agent. | 18 |
| (D) "In-person assister" means any person, other than a | 19 |
| navigator, who receives any funding from, or who is selected or | 20 |
| designated by, an exchange, the state, or the federal government | 21 |
| to perform any of the activities and duties identified in division | 22 |
| (i) of section 1311 of the Affordable Care Act. "In-person | 23 |
| assister" includes any individual that is employed by, supervised | 24 |
| by, or affiliated with an in-person assister and performs any of | 25 |
| the activities and duties identified in division (i) of section | 26 |
| 1311 of the Affordable Care Act, any non-navigator assistance | 27 |
| personnel, and any other person deemed as such by rules adopted by | 28 |
| the superintendent under division (L) of section 3905.471 of the | 29 |
| Revised Code. | 30 |
| (E) "Insurance" means any of the lines of authority set forth | 31 |
| in Chapter 1739., 1751., or 1761. or Title XXXIX of the Revised | 32 |
| Code, or as additionally determined by the superintendent of | 33 |
| insurance. | 34 |
| (F) "Insurance agent" or "agent" means any person that, in | 35 |
| order to sell, solicit, or negotiate insurance, is required to be | 36 |
| licensed under the laws of this state, including limited lines | 37 |
| insurance agents and surplus line brokers. | 38 |
| (G) "Insurer" has the same meaning as in section 3901.32 of | 39 |
| the Revised Code. | 40 |
| (H) "License" means the authority issued by the | 41 |
| superintendent to a person to act as an insurance agent for the | 42 |
| lines of authority specified, but that does not create any actual, | 43 |
| apparent, or inherent authority in the person to represent or | 44 |
| commit an insurer. | 45 |
| (I) "Limited line credit insurance" means credit life, credit | 46 |
| disability, credit property, credit unemployment, involuntary | 47 |
| unemployment, mortgage life, mortgage guaranty, mortgage | 48 |
| disability, guaranteed automobile protection insurance, or any | 49 |
| other form of insurance offered in connection with an extension of | 50 |
| credit that is limited to partially or wholly extinguishing that | 51 |
| credit obligation and that is designated by the superintendent as | 52 |
| limited line credit insurance. | 53 |
| (J) "Limited line credit insurance agent" means a person that | 54 |
| sells, solicits, or negotiates one or more forms of limited line | 55 |
| credit insurance to individuals through a master, corporate, | 56 |
| group, or individual policy. | 57 |
| (K) "Limited lines insurance" means those lines of authority | 58 |
|
set forth in divisions (B)(7) to | 59 |
| the Revised Code or in rules adopted by the superintendent, or any | 60 |
| lines of authority the superintendent considers necessary to | 61 |
| recognize for purposes of complying with section 3905.072 of the | 62 |
| Revised Code. | 63 |
| (L) "Limited lines insurance agent" means a person authorized | 64 |
| by the superintendent to sell, solicit, or negotiate limited lines | 65 |
| insurance. | 66 |
| (M) "NAIC" means the national association of insurance | 67 |
| commissioners. | 68 |
| (N) "Insurance navigator" means a person selected to perform | 69 |
| the activities and duties identified in division (i) of section | 70 |
| 1311 of the Affordable Care Act that is certified by the | 71 |
| superintendent of insurance under section 3905.471 of the Revised | 72 |
| Code. "Insurance navigator" refers to a navigator specified in | 73 |
| section 1311 of the Affordable Care Act, 42 U.S.C. 13031. | 74 |
| (O) "Negotiate" means to confer directly with, or offer | 75 |
| advice directly to, a purchaser or prospective purchaser of a | 76 |
| particular contract of insurance with respect to the substantive | 77 |
| benefits, terms, or conditions of the contract, provided the | 78 |
| person that is conferring or offering advice either sells | 79 |
| insurance or obtains insurance from insurers for purchasers. | 80 |
| (P) "Person" means an individual or a business entity. | 81 |
| (Q) "Sell" means to exchange a contract of insurance by any | 82 |
| means, for money or its equivalent, on behalf of an insurer. | 83 |
| (R) "Solicit" means to attempt to sell insurance, or to ask | 84 |
| or urge a person to apply for a particular kind of insurance from | 85 |
| a particular insurer. | 86 |
| (S) "Superintendent" or "superintendent of insurance" means | 87 |
| the superintendent of insurance of this state. | 88 |
| (T) "Terminate" means to cancel the relationship between an | 89 |
| insurance agent and the insurer or to terminate an insurance | 90 |
| agent's authority to transact insurance. | 91 |
| (U) "Uniform application" means the NAIC uniform application | 92 |
| for resident and nonresident agent licensing, as amended by the | 93 |
| NAIC from time to time. | 94 |
| (V) "Uniform business entity application" means the NAIC | 95 |
| uniform business entity application for resident and nonresident | 96 |
| business entities, as amended by the NAIC from time to time. | 97 |
| (W) "Exchange" means a health benefit exchange established by | 98 |
| the state government of Ohio or an exchange established by the | 99 |
| United States department of health and human services in | 100 |
| accordance with the "Patient Protection and Affordable Care Act," | 101 |
| 124 Stat. 119, 42 U.S.C. 18031 (2011). | 102 |
| Sec. 3905.06. (A)(1) The superintendent of insurance shall | 103 |
| issue a resident insurance agent license to an individual | 104 |
| applicant whose home state is Ohio upon submission of a completed | 105 |
| application and payment of any applicable fee required under this | 106 |
| chapter, if the superintendent finds all of the following: | 107 |
| (a) The applicant is at least eighteen years of age. | 108 |
| (b) The applicant has not committed any act that is a ground | 109 |
| for the denial, suspension, or revocation of a license under | 110 |
| section 3905.14 of the Revised Code. | 111 |
| (c) If required under section 3905.04 of the Revised Code, | 112 |
| the applicant has completed a program of insurance education for | 113 |
| each line of authority for which the applicant has applied. | 114 |
| (d) If required under section 3905.04 of the Revised Code, | 115 |
| the applicant has passed an examination for each line of authority | 116 |
| for which the applicant has applied. | 117 |
| (e) Any applicant applying for variable life-variable annuity | 118 |
| line of authority is registered with the financial industry | 119 |
| regulatory authority (FINRA) as a registered representative after | 120 |
| having passed at least one of the following examinations | 121 |
| administered by the FINRA: the series 6 examination, the series 7 | 122 |
| examination, the series 63 examination, the series 66 examination, | 123 |
| or any other FINRA examination approved by the superintendent. | 124 |
| (f) If required under section 3905.051 of the Revised Code, | 125 |
| the applicant has consented to a criminal records check and the | 126 |
| results of the applicant's criminal records check are determined | 127 |
| to be satisfactory by the superintendent. | 128 |
| (g) The applicant is a United States citizen or has provided | 129 |
| proof of having legal authorization to work in the United States. | 130 |
| (h) The applicant is of good reputation and character, is | 131 |
| honest and trustworthy, and is otherwise suitable to be licensed. | 132 |
| (2) The superintendent shall issue a resident insurance agent | 133 |
| license to a business entity applicant upon submission of a | 134 |
| completed application and payment of any applicable fees required | 135 |
| under this chapter if the superintendent finds all of the | 136 |
| following: | 137 |
| (a) Except as provided under division (C)(2) of section | 138 |
| 3905.062 of the Revised Code, the applicant either is domiciled in | 139 |
| Ohio or maintains its principal place of business in Ohio. | 140 |
| (b) The applicant has designated a licensed insurance agent | 141 |
| who will be responsible for the applicant's compliance with the | 142 |
| insurance laws of this state. | 143 |
| (c) The applicant has not committed any act that is a ground | 144 |
| for the denial, suspension, or revocation of a license under | 145 |
| section 3905.14 of the Revised Code. | 146 |
| (d) Any applicant applying for a portable electronics | 147 |
| insurance license line of authority satisfies the requirements of | 148 |
| division (C)(1) of section 3905.062 of the Revised Code. | 149 |
| (e) The applicant has submitted any other documents requested | 150 |
| by the superintendent. | 151 |
| (B) An insurance agent license issued pursuant to division | 152 |
| (A) of this section shall state the licensee's name, the license | 153 |
| number, the date of issuance, the date the license expires, the | 154 |
| line or lines of authority for which the licensee is qualified, | 155 |
| and any other information the superintendent deems necessary. | 156 |
| A licensee may be qualified for any of the following lines of | 157 |
| authority: | 158 |
| (1) Life, which is insurance coverage on human lives, | 159 |
| including benefits of endowment and annuities, and may include | 160 |
| benefits in the event of death or dismemberment by accident and | 161 |
| benefits for disability income; | 162 |
| (2) Accident and health, which is insurance coverage for | 163 |
| sickness, bodily injury, or accidental death, and may include | 164 |
| benefits for disability income; | 165 |
| (3) Property, which is insurance coverage for the direct or | 166 |
| consequential loss or damage to property of any kind; | 167 |
| (4) Casualty, which is insurance coverage against legal | 168 |
| liability, including coverage for death, injury, or disability or | 169 |
| damage to real or personal property; | 170 |
| (5) Personal lines, which is property and casualty insurance | 171 |
| coverage sold to individuals and families for noncommercial | 172 |
| purposes; | 173 |
| (6) Variable life and variable annuity products, which is | 174 |
| insurance coverage provided under variable life insurance | 175 |
| contracts and variable annuities; | 176 |
| (7) Credit, which is limited line credit insurance; | 177 |
| (8) Title, which is insurance coverage against loss or damage | 178 |
| suffered by reason of liens against, encumbrances upon, defects | 179 |
| in, or the unmarketability of, real property; | 180 |
| (9) Surety bail bond, which is the authority set forth in | 181 |
| sections 3905.83 to 3905.95 of the Revised Code; | 182 |
| (10) Portable electronics insurance, which is a limited line | 183 |
| described in section 3905.062 of the Revised Code; | 184 |
| (11) Travel insurance, which is a limited line as described | 185 |
| in section 3905.063 of the Revised Code; | 186 |
| (12) Any other line of authority designated by the | 187 |
| superintendent. | 188 |
| (C)(1) An individual seeking to renew a resident insurance | 189 |
| agent license shall apply biennially for a renewal of the license | 190 |
| on or before the last day of the licensee's birth month. A | 191 |
| business entity seeking to renew a resident insurance agent | 192 |
| license shall apply biennially for a renewal of the license on or | 193 |
| before the date determined by the superintendent. The | 194 |
| superintendent shall send a renewal notice to all licensees at | 195 |
| least one month prior to the renewal date. | 196 |
| Applications shall be submitted to the superintendent on | 197 |
| forms prescribed by the superintendent. Each application shall be | 198 |
| accompanied by a biennial renewal fee. The superintendent also may | 199 |
| require an applicant to submit any document reasonably necessary | 200 |
| to verify the information contained in the renewal application. | 201 |
| (2) To be eligible for renewal, an individual applicant shall | 202 |
| complete the continuing education requirements pursuant to section | 203 |
| 3905.481 of the Revised Code prior to the renewal date. | 204 |
| (3) If an applicant submits a completed renewal application, | 205 |
| qualifies for renewal pursuant to divisions (C)(1) and (2) of this | 206 |
| section, and has not committed any act that is a ground for the | 207 |
| refusal to issue, suspension of, or revocation of a license under | 208 |
| section 3905.14 of the Revised Code, the superintendent shall | 209 |
| renew the applicant's resident insurance agent license. | 210 |
| (D) If an individual or business entity does not apply for | 211 |
| the renewal of the individual or business entity's license on or | 212 |
| before the license renewal date specified in division (C)(1) of | 213 |
| this section, the individual or business entity may submit a late | 214 |
| renewal application along with all applicable fees required under | 215 |
| this chapter prior to the first day of the second month following | 216 |
| the license renewal date. | 217 |
| (E) A license issued under this section that is not renewed | 218 |
| on or before its renewal date pursuant to division (C) of this | 219 |
| section or its late renewal date pursuant to division (D) of this | 220 |
| section automatically is suspended for nonrenewal on the first day | 221 |
| of the second month following the renewal date. If a license is | 222 |
| suspended for nonrenewal pursuant to this division, the individual | 223 |
| or business entity is eligible to apply for reinstatement of the | 224 |
| license within the twelve-month period following the date by which | 225 |
| the license should have been renewed by complying with the | 226 |
| reinstatement procedure established by the superintendent and | 227 |
| paying all applicable fees required under this chapter. | 228 |
| (F) A license that is suspended for nonrenewal that is not | 229 |
| reinstated pursuant to division (E) of this section automatically | 230 |
| is canceled unless the superintendent is investigating any | 231 |
| allegations of wrongdoing by the agent or has initiated | 232 |
| proceedings under Chapter 119. of the Revised Code. In that case, | 233 |
| the license automatically is canceled after the completion of the | 234 |
| investigation or proceedings unless the superintendent revokes the | 235 |
| license. | 236 |
| (G) An individual licensed as a resident insurance agent who | 237 |
| is unable to comply with the license renewal procedures | 238 |
| established under this section and who is unable to engage in the | 239 |
| business of insurance due to military service, a long-term medical | 240 |
| disability, or some other extenuating circumstance may request an | 241 |
| extension of the renewal date of the individual's license. To be | 242 |
| eligible for such an extension, the individual shall submit a | 243 |
| written request with supporting documentation to the | 244 |
| superintendent. At the superintendent's discretion, the | 245 |
| superintendent may not consider a written request made after the | 246 |
| renewal date of the license. | 247 |
| Sec. 3905.063. (A) As used in this section: | 248 |
| (1) "Limited lines travel insurance agent" means both of the | 249 |
| following: | 250 |
| (a) A managing general agent licensed under section 3905.71 | 251 |
| of the Revised Code or third party administrator licensed under | 252 |
| Chapter 3959. of the Revised Code; | 253 |
| (b) A licensed insurance agent, including a limited lines | 254 |
| agent, designated by an insurer as the travel insurance designated | 255 |
| responsible agent as set forth in division (B)(2)(c) of this | 256 |
| section. | 257 |
| (2) "Offer and disseminate" means providing general | 258 |
| information, including a description of the coverage and price, as | 259 |
| well as processing the application, collecting premiums, and | 260 |
| performing other activities for which no insurance license is | 261 |
| required. | 262 |
| (3) "Travel insurance" means insurance coverage for personal | 263 |
| risks incident to planned travel, including all of the following: | 264 |
| (a) Interruption or cancellation of a trip or event; | 265 |
| (b) Loss of baggage or personal effects; | 266 |
| (c) Damages to accommodations or rental vehicles; | 267 |
| (d) Sickness, accident, disability, or death occurring during | 268 |
| travel. | 269 |
| "Travel insurance" does not include major medical plans that | 270 |
| provide comprehensive medical protection for a traveler with a | 271 |
| trip lasting six months or longer, including a person working | 272 |
| overseas as an expatriate or deployed military personnel. | 273 |
| (4) "Travel retailer" means a business entity that makes, | 274 |
| arranges, or offers travel services, and that may offer and | 275 |
| disseminates travel insurance as a service to its customers on | 276 |
| behalf of, and under the direction of, a limited lines travel | 277 |
| insurance agent. | 278 |
| (B)(1) Notwithstanding any other provision of law, the | 279 |
| superintendent of insurance may issue to an individual or business | 280 |
| entity a limited lines travel insurance agent license that | 281 |
| authorizes the agent to sell, solicit, or negotiate travel | 282 |
| insurance through a licensed insurer if the individual or business | 283 |
| entity has filed with the superintendent an application in a form | 284 |
| and manner prescribed by the superintendent. | 285 |
| (2) Notwithstanding any other provision of law, a travel | 286 |
| retailer may offer and disseminate travel insurance under a | 287 |
| limited lines travel insurance agent that is a business entity | 288 |
| only if the following conditions are met: | 289 |
| (a) The limited lines travel insurance agent or travel | 290 |
| retailer shall provide the following to purchasers of travel | 291 |
| insurance: | 292 |
| (i) A description of the material terms or the actual | 293 |
| material terms of the insurance coverage; | 294 |
| (ii) A description of the process for filing a claim; | 295 |
| (iii) A description of the review or cancellation process for | 296 |
| the travel insurance policy; | 297 |
| (iv) The identity and contact information of the insurer and | 298 |
| limited lines agent. | 299 |
| (b) At the time the superintendent of insurance issues a | 300 |
| license, the limited lines travel insurance agent shall establish | 301 |
| and maintain a register on a form prescribed by the superintendent | 302 |
| of each travel retailer that offers travel insurance on the | 303 |
| agent's behalf. The limited lines travel insurance agent shall | 304 |
| submit the register to the department of insurance upon reasonable | 305 |
| request, and shall certify that the registered travel retailer | 306 |
| complies with 18 U.S.C. 1033. | 307 |
| The register shall be maintained and updated annually by the | 308 |
| limited lines travel insurance agent, and shall include both of | 309 |
| the following: | 310 |
| (i) The names, addresses, and contact information of the | 311 |
| travel retailer and any officer or person who directs or controls | 312 |
| the travel retailer's operations; | 313 |
| (ii) The travel retailer's federal tax identification number. | 314 |
| (c) The limited lines travel insurance agent shall designate | 315 |
| one of the agent's employees, who is a licensed insurance agent, | 316 |
| as the designated responsible agent who is responsible for the | 317 |
| agent's and travel retailer's compliance with the travel insurance | 318 |
| laws, rules, and regulations of this state. The designated | 319 |
| responsible agent, or the president, secretary, treasurer, or any | 320 |
| other officer or person who directs or controls the limited lines | 321 |
| travel insurance agent's insurance operations, shall comply with | 322 |
| the fingerprinting requirements of section 3905.051 of the Revised | 323 |
| Code or the applicable fingerprinting requirements of the home | 324 |
| state of the limited lines travel insurance agent. | 325 |
| (d) The limited lines travel insurance agent shall pay any | 326 |
| applicable fee as required under this chapter. | 327 |
| (e) The limited lines travel insurance agent shall require | 328 |
| each employee and authorized representative of the travel | 329 |
| retailer, whose duties include offering and disseminating travel | 330 |
| insurance, to receive a program of instruction or training that | 331 |
| may be subject to review by the superintendent of insurance. The | 332 |
| training material shall, at minimum, contain instructions on the | 333 |
| types of insurance offered, ethical sales practices, and required | 334 |
| disclosures to prospective customers. | 335 |
| (3) The limited lines travel insurance agent, and those | 336 |
| registered under the agent's license, are exempt from any | 337 |
| examination and education requirements as set forth in section | 338 |
| 3905.04 of the Revised Code. | 339 |
| (C)(1) Any travel retailer offering or disseminating travel | 340 |
| insurance shall make available to prospective purchasers brochures | 341 |
| or other written materials that contain all of the following: | 342 |
| (a) The identity and contact information of the insurer and | 343 |
| the limited lines travel insurance agent; | 344 |
| (b) An explanation that the purchase of travel insurance is | 345 |
| not required in order to purchase any other product or service | 346 |
| from the travel retailer; | 347 |
| (c) An explanation that an unlicensed travel retailer is | 348 |
| permitted to provide general information about the insurance | 349 |
| offered by the travel retailer, including a description of the | 350 |
| coverage and price, but is not qualified or authorized to answer | 351 |
| technical questions about the terms and conditions of the | 352 |
| insurance offered by the travel retailer or to evaluate the | 353 |
| adequacy of the customer's existing insurance coverage. | 354 |
| (2) A travel retailer's employee or authorized representative | 355 |
| who is not licensed as an insurance agent shall not do any of the | 356 |
| following: | 357 |
| (a) Evaluate or interpret the technical terms, benefits, and | 358 |
| conditions of the offered travel insurance coverage; | 359 |
| (b) Evaluate or provide advice concerning a prospective | 360 |
| purchaser's existing insurance coverage; | 361 |
| (c) Hold itself out as a licensed insurer, licensed agent, or | 362 |
| insurance expert. | 363 |
| (3) Notwithstanding any other provision of law, a travel | 364 |
| retailer whose insurance related activities, and those of its | 365 |
| employees and authorized representatives, are limited to offering | 366 |
| and disseminating travel insurance on behalf of and under the | 367 |
| direction of a limited lines travel insurance agent that meets the | 368 |
| requirements of this section, is authorized to offer and | 369 |
| disseminate insurance and receive related compensation for these | 370 |
| services, if the travel retailer is registered by the limited | 371 |
| lines travel insurance agent as described in division (B)(2)(b) of | 372 |
| this section, and either of the following conditions are met: | 373 |
| (a) If the charge to the customer for coverage is not | 374 |
| included in the cost associated with the purchase of travel | 375 |
| insurance or related services, the charge for coverage is | 376 |
| separately itemized on the customer's bill; | 377 |
| (b) If the charge to the customer for coverage is included in | 378 |
| the cost associated with the purchase of travel insurance or | 379 |
| related services, the travel retailer clearly and conspicuously | 380 |
| discloses to the customer that the charge for travel insurance | 381 |
| coverage is included with the charge for travel insurance or | 382 |
| related services. | 383 |
| (4) All funds received by a travel retailer from a customer | 384 |
| for the sale of travel insurance shall be considered funds held in | 385 |
| trust by the travel retailer in a fiduciary capacity for the | 386 |
| benefit of the limited lines travel insurance agent. Travel | 387 |
| retailers that bill and collect these charges are not required to | 388 |
| maintain the funds in a segregated account if the travel retailer | 389 |
| is authorized by the agent to hold the funds in an alternate | 390 |
| manner and the travel retailer remits the amount of the charges to | 391 |
| the designated responsible agent within sixty days after receiving | 392 |
| the charges. | 393 |
| (5) The designated responsible agent shall also be | 394 |
| responsible for the acts of the travel retailer and shall use | 395 |
| reasonable means to ensure compliance with this section by the | 396 |
| travel retailer. | 397 |
| (D) Travel insurance may be provided under individual or | 398 |
| group insurance. | 399 |
| (E) Any limited lines travel insurance agent, or any travel | 400 |
| retailer offering and disseminating travel insurance under the | 401 |
| limited lines travel insurance agent license, that fails to comply | 402 |
| with the provisions of this section is deemed to have engaged in | 403 |
| an unfair and deceptive act or practice in the business of | 404 |
| insurance as defined in section 3901.21 of the Revised Code and is | 405 |
| subject to section 3905.14 of the Revised Code. | 406 |
| Section 2. That existing sections 3905.01 and 3905.06 of the | 407 |
| Revised Code are hereby repealed. | 408 |
