What's happening
This bill allows travel insurance agents and companies to offer and sell travel insurance under expanded licensing and regulatory requirements.
Why it matters
Expands who can sell travel insurance. The bill allows not just traditional insurance agents but also travel companies (like travel agencies, tour operators, etc.) to offer and sell travel insurance to customers, as long as they partner with a licensed travel insurance agent and comply with new registration and oversight requirements. This could make it much easier for travelers to purchase insurance as part of booking a trip.
Adds consumer protection and disclosure requirements. The bill mandates that consumers be given clear written information about what travel insurance covers, how to file a claim, how to cancel, and the identity of the insurer and agent. It also requires disclosures that the insurance may duplicate coverage customers already have, and that purchasing it is not required to buy travel services.
Increases regulatory oversight and accountability. Travel insurance agents must maintain a register of all travel companies selling insurance on their behalf and designate a responsible licensed agent for compliance. The state regulator (superintendent) is given broad powers to enforce compliance, including the ability to suspend, revoke, or fine agents and to require corrective action if travel companies or their employees break the rules.
Clarifies what travel insurance can and cannot cover. The bill details what counts as “travel insurance” (e.g., trip cancellation, lost baggage, travel medical emergencies) and explicitly excludes long-term major medical plans. It also sets rules for how travel insurance may be sold to groups and the types of policies that can be offered, potentially broadening the types of coverage available to New York travelers.
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Who cares
Headline styles
Expand Travel Insurance Protections
Plain English, a few words. Used as the page title.
Sponsors
1 Co-sponsor
History
- Referred to insurance
- Referred to insurance
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Expand Travel Insurance Coverage
In Assembly Committee · Insurance · Sponsor Kevin Cahill
Full text
8 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3520
2019-2020 Regular Sessions
IN SENATE
February 8, 2019
Introduced by Sens. BRESLIN, SEWARD -- read twice and ordered printed, and when printed to be committed to the Committee on Insurance
AN ACT to amend the insurance law, in relation to travel insurance
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subsection (i) of section 2101 of the insurance law, as added by chapter 408 of the laws of 1990, is amended to read as follows:
(i) In this chapter, "limited licensee" shall mean a person authorized to sell certain coverages relating to the rental of motor vehicles, the sale of wireless communications equipment, the rental of self-storage space, or the sale of travel-related products and services, pursuant to the provisions of section two thousand one hundred thirty-one of this article.
§ 2. Section 2131 of the insurance law, as amended by chapter 582 of the laws of 2003, the section heading and subsections (a), (d), (e), (f), (h) and (i) as amended by chapter 368 of the laws of 2010, subsection (g) as amended by chapter 426 of the laws of 2005, is amended to read as follows:
§ 2131. Limited license for rental vehicle companies, wireless communications equipment vendors [and], self-service storage companies, and travel insurance agents. (a) The superintendent may issue to a rental vehicle company, a wireless communications equipment vendor, a self-service storage company, and a travel insurance agent, or to a franchisee of a rental vehicle company, a wireless communications equipment vendor, [or a] self-service storage company, or a travel insurance agent which has complied with the requirements of this section, a limited license authorizing the licensee, known as a "limited licensee" for the purpose of this article, to act as agent, with reference to the kinds of insurance specified in this section, of any insurer authorized to write such kinds of insurance in this state.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01921-01-9
S. 3520 2
(b) The prerequisites for issuance of a limited license under this section shall be the filing with the superintendent of the following:
(1) an application, signed by an officer of the applicant, for the limited license in such form or forms, and supplements thereto, and containing such information, as the superintendent may prescribe; and
(2) an appointment of a limited licensee by the appointing insurer, in a format approved by the superintendent, no more than fifteen days after the date the agency contract is executed or the first insurance contract is submitted, whichever is later, stating that it has satisfied itself that the named applicant is trustworthy and competent to act as its insurance agent for this limited purpose and that the insurer will appoint such applicant to act as the agent in reference to the doing of such kind or kinds of insurance which are permitted by this section, if the limited license applied for is issued by the superintendent. Such appointment shall be subscribed by an officer or managing agent of such insurer and affirmed as true under the penalties of perjury.
(c) In the event that any provision of this chapter is violated, the superintendent may:
(1) revoke or suspend a limited license issued under this section in accordance with the provisions of section two thousand one hundred ten of this article; or
(2) after notice and hearing impose such other penalties, including suspending the transaction of insurance at specific locations where violations of this article have occurred, as the superintendent deems necessary or convenient to carry out the purposes of this section.
(d) The rental vehicle company, wireless communications equipment vendor, [or] self-service storage company, or travel insurance agent, or franchisee licensed pursuant to subsection (a) of this section may act as agent for an authorized insurer only in connection with the sale of insurance in connection with the rental of motor vehicles, the sale or offering for sale of wireless communications equipment, [or] the rental of storage space, or the sale or offering for sale of travel-related products or services, respectively, and only with respect to the following kinds of insurance:
(1) with respect to rental vehicle companies:
(A) excess liability insurance that provides coverage to the rental car company or franchisee and renters and other authorized drivers of rental vehicles, in excess of the standard liability limits provided by the rental vehicle company in its rental agreement, for liability arising from the negligent operation of the rental vehicle;
(B) accident and health insurance that provides coverage to renters and other vehicle occupants, in excess to the standard first party benefits provided pursuant to article fifty-one of this chapter, for accidental death and/or dismemberment and for medical expenses resulting from an accident that occurs during the rental period;
(C) personal effects insurance that provides coverage to renters and other vehicle occupants for the loss of, or damage to, personal effects that occurs during the rental period;
(D) any other coverage which the superintendent may approve as meaningful and appropriate in connection with the rental of motor vehicles; or
(2) with respect to wireless communications equipment vendors, insurance issued to cover the loss, theft, mechanical failure, or malfunction of, or damage to, wireless communications equipment offered as either an individual policy issued to the consumer or as a group policy under which certificates or other evidence of coverage are issued to individ-
S. 3520 3
ual consumers who enroll in the program, provided however, that said insurance shall not extend to wireless services or service contracts governed by article seventy-nine of this chapter; or
(3) with respect to self-service storage companies, the following coverages offered as either an individual policy issued to the consumer or as a group policy:
(A) personal effects insurance that provides coverage to renters of storage spaces at the self-service storage company's facility for the loss of, or damage to, personal property stored at the facility, where the loss or damage occurs at the same facility during the rental period;
(B) any other coverage that the superintendent may approve as meaningful and appropriate in connection with the rental of storage space.
(4) with respect to travel insurance agents, the following coverages, each of which coverage is individually and collectively known as "travel insurance":
(A) insurance coverage for personal risks incident to planned travel, including but not limited to:
(i) interruption or cancellation of trip or event;
(ii) loss of baggage or personal effects;
(iii) damages to accommodations or rental vehicle; or
(iv) sickness, accident, disability or death occurring during travel.
(B) any other coverage that the superintendent may approve as meaningful and appropriate in connection with travel.
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.
(e) No insurance may be issued pursuant to this section unless:
(1) with regard to the rental of vehicles only, the rental period of the rental agreement does not exceed thirty consecutive days; and
(2) at every location where rental vehicle agreements, wireless communications equipment agreements, or self-service storage agreements are executed, brochures or other written materials are readily available to the prospective consumer that:
(A) summarize, clearly and correctly, the material terms of insurance coverage, including the identity of the insurer and, with regard to wireless communications equipment insurance, the agent licensed under subsection (b) of section two thousand one hundred three of this article;
(B) disclose that these policies may provide a duplication of coverage already provided by a renter's personal automobile insurance policy, homeowner's insurance policy, personal liability insurance policy, or other source of coverage;
(C) state that the purchase by the consumer of the kinds of insurance specified in this section is not required in order to rent a vehicle, to purchase or lease wireless communications equipment, or to rent storage space;
(D) describe the process for filing a claim in the event the consumer elects to purchase coverage;
(E) the price, deductible, benefits, exclusions and conditions or other limitations of such policies;
(F) disclose that the employee of the rental vehicle company, wireless communications equipment vendor or self-storage company is not qualified or authorized to evaluate the adequacy of the purchaser's existing coverages, unless otherwise licensed; and
S. 3520 4
(G) state that the customer may cancel the insurance at any time and any unearned premium will be refunded in accordance with applicable law.
(3) evidence of coverage is provided to every consumer who elects to purchase such coverage.
(f) Rates and forms for insurance under this section shall be subject to article twenty-three of this chapter. Any brochures used in connection with insurance under this section shall be filed with the superintendent for review and shall include disclosure of the claims filing process, premium, deductible amounts and limits and shall be prominently displayed in the brochure with at least twelve-point type bold headings. Any such brochures shall also be subject to section three thousand one hundred two of this chapter, provided, however, that any policy, certificate or other evidence of insurance coverage, whether or not contained in such brochure, shall not be subject to section three thousand one hundred two of this chapter, but shall be written in a clear and coherent manner and whenever practicable shall use words with common and everyday meaning to facilitate readability and to aid the policyholder in understanding the coverage provided.
(g) Any limited license issued under this section shall also authorize any salaried employee or any sales representative authorized by the licensee who, pursuant to subsection (h) of this section, is trained to act individually on behalf, and under the supervision, of the licensee with respect to the kinds of insurance specified in this section.
(h) Each company or franchisee licensed pursuant to this section shall conduct a training program, which shall be submitted to the superintendent for approval prior to use, and which shall meet the following minimum standards:
(1) each trainee shall receive basic instruction about the kinds of insurance specified in this section offered for purchase by prospective renters of rental vehicles, purchasers or lessors of wireless communications equipment, or renters of storage space;
(2) each trainee shall be instructed with respect to the disclosures required under subsection (e) of this section and to acknowledge to a prospective renter of a rental vehicle, purchaser or lessor of wireless communications equipment, or renter of storage space that purchase of any such insurance specified in this section is not required in order for the consumer to rent a motor vehicle, purchase or lease wireless communications equipment, or rent storage space;
(3) each trainee shall be instructed to acknowledge to a prospective consumer of the kinds of insurance specified in this section that the consumer may have insurance policies that already provide the coverage being offered by the rental vehicle company, the wireless communications equipment vendor, or self-service storage company pursuant to this section; and
(4) with regard to wireless communications equipment insurance and self-service storage company insurance, training materials may be developed and provided by an agent licensed pursuant to subsection (b) of section two thousand one hundred three of this article.
(i) Limited licensees acting pursuant to and under the authority of this section shall comply with all applicable provisions of this article, except that notwithstanding section two thousand one hundred twenty of this article, a limited licensee pursuant to this section shall not be required to treat premiums collected from consumers purchasing such insurance when renting motor vehicles, purchasing or leasing wireless communications equipment, or renting storage space as funds received in a fiduciary capacity, provided that:
S. 3520 5
(1) the insurer represented by the limited licensee has consented in writing, signed by the insurer's officer, that premiums need not be segregated from funds received by the rental vehicle company, wireless communications equipment vendor, or self-storage company on account of vehicle rental, wireless communications equipment purchase or lease, or storage space rental; and
(2) the charges for insurance coverage are itemized but not billed to the consumer separately from the charges for rental vehicles, purchase or lease of wireless communications equipment, or storage space rental.
(j) No limited licensees under this section shall advertise, represent or otherwise hold itself or any of its employees themselves out as licensed insurance agents or brokers.
(k) The superintendent may issue a replacement for a currently in force license which has been lost or destroyed. Before such replacement license shall be issued, there shall be on file in the office of the superintendent a written application for such replacement license, affirming under penalty of perjury that the original license has been lost or destroyed, together with a fee of fifteen dollars.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the insurance law, in relation to travel insurance
Purpose
This bill would reform the travel agent licensing requirements in New York to be in accord with the National Association of Insurance Commis- sioners (NAIC) and National Conference of Insurance Legislators (NCOIL) models. Insurance licensing requirements will be shifted from the retail travel company and its employees - the vast majority of whose business emanates from scheduling trips and is not insurance related - to the travel insurance agent. The travel insurance agent will be a managing general agent, third party administrator, or other intermediary working with the insurer and travel company. Retail travel companies would be registered under the travel insurance agent's license. The bill also strengthens consumer protections by adding training requirements for each employee and authorized representative of the travel company, by clearly identifying the limited activities in which the travel company is permitted to engage, and by requiring additional consumer-oriented disclosures on travel insurance materials.
Summary of provisions
Section one of the bill amends the definition of "limited licensee" in insurance law section 2101 to include a person authorized to sell travel related products and services.
Read the full memo (915 words)
Section two of the bill amends insurance law section 2131 to define the terms "travel insurance," "travel company", and "travel insurance agent", along with other travel insurance-related terms. The activities in which travel companies may engage are also clearly defined and limit- ed. Licensing requirements' are shifted from individual retail travel companies and their employees to travel insurance agents. The Super- intendent of Financial Services is vested with authority to regulate these agents, including the power to impose monetary fines and revoke their licenses. New consumer protections include a requirement to provide a description of the contract terms, the claims process, and an explanation of the review or cancellation procedure.
This section adds a registration requirement compelling travel insurance agents to maintain a register of each retail travel company offering travel insurance on its behalf for periodic review by the Superinten- dent. This section also inserts a training requirement for each employee and authorized representative of the travel company. Topics required to be covered include the types of insurance offered, ethical sales prac- tices, and required disclosures to prospective customers.
Section three of the bill amends insurance law section 3452 to specif- ically authorize the issuance of a group property travel insurance poli- cy to a travel company where the policy insures its travel customers.
Section four of the bill is the effective date.
Justification
Multi-state licensing of insurance producers has been a challenging issue for regulators and industry alike for decades. In response, the NAIC developed the Producer Licensing Model Act (PLMA) to reflect the licensing reciprocity requirements of the federal Gramm-Leach-Bliley Act. A majority of states including New York have adopted all or a portion of the PLMA, putting in place a more efficient reciprocal licensing framework that enabled producers to more easily obtain non-re- sident licenses.
However, these actions have not effectively addressed the practical challenges associated with multi-state licensing for limited lines trav- el insurance. Before states began implementing these reforms, there were forty-one dissimilar and outdated definitions of travel insurance across the states, with some still referencing steamships and other antiquated terms. In an industry that can suffer from high turnover rates, these roadblocks made licensing reciprocity nearly impossible.
In New York, travel companies have encountered unique licensing chal- lenges, causing confusion, delay, and leading to compliance problems. Naming conflicts between affiliated or similarly-named companies require some travel companies to change their names or use fictitious names. In other words, travel agencies, whose principal business is selling trips and for whom travel insurance is a minute portion of their business, are forced to change their names or use fictitious names in order to satisfy a regulatory requirement that is aimed at more traditional insurance producers. In addition to these producer licensing issues, travel insur- ance (which offers a fairly standard, low-cost benefit package) is addressed within rules not specifically designed for travel insurance or its current use of group coverage, creating additional compliance diffi- culties.
This legislation provides a workable solution to resolve the regulatory inconsistencies and compliance issues for travel insurance agents and travel companies. It establishes a licensing framework that reflects the unique distribution of travel insurance within the travel industry. Regulatory oversight is strengthened, with burdens appropriately placed on the travel insurance agent, rather than on the retail travel company (whose activities are strictly limited to providing general information, and who is not seeking to act as an insurance agent). This legislation also dramatically improves consumer protection by clarifying account- ability and requiring notice to the consumer and the Department of Financial Services with regard to who is responsible for the sale of travel insurance.
In the last three years, 34 states, including California, Texas and Florida, have implemented very similar legislation, legislation has been passed and is awaiting governors' signatures in three additional states, and it is anticipated that most of the remaining states will implement these standards in the near future. The NAIC/NCOIL standards provide regulators and the travel insurance industry a clearer and more workable licensing framework for travel insurance, while at the same time improv- ing consumer protections and disclosures.
Legislative history
S.1479 of 2017-18; S.5363 of 2015-16.
Fiscal implications
None.
Effective date
This act shall take effect on the one hundred and twentieth day after it shall have become a law.
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