By: Taylor S.B. No. 1672
(In the Senate - Filed March 8, 2013; March 25, 2013, read
first time and referred to Committee on Business and Commerce;
April 4, 2013, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 8, Nays 0; April 4, 2013,
sent to printer.)
COMMITTEE SUBSTITUTE FOR S.B. No. 1672 By: Taylor
A BILL TO BE ENTITLED
AN ACT
relating to the business of travel insurance; authorizing
penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. The heading to Subchapter D, Chapter 4055,
Insurance Code, is amended to read as follows:
SUBCHAPTER D. TRAVEL INSURANCE [LICENSE]
SECTION 2. Section 4055.151, Insurance Code, is amended by
adding Subdivisions (1-b) and (2-b) to read as follows:
(1-b) "Supervising entity" means a travel insurance
supervising entity designated by an insurer under Section
4055.1515.
(2-b) "Travel retailer" means a business entity that
makes, arranges, or offers travel services.
SECTION 3. Subchapter D, Chapter 4055, Insurance Code, is
amended by adding Section 4055.1515 to read as follows:
Sec. 4055.1515. TRAVEL INSURANCE SUPERVISING ENTITY. An
insurer authorized to engage in the business of travel insurance in
this state may designate a travel insurance supervising entity for
purposes of this subchapter. The supervising entity must be:
(1) a licensed managing general agent;
(2) a licensed third-party administrator; or
(3) a licensed insurance agent, including a specialty
license holder and a person described by Section 4055.002(a).
SECTION 4. Sections 4055.152 and 4055.153, Insurance Code,
are amended to read as follows:
Sec. 4055.152. SPECIALTY [ISSUANCE OF] LICENSE; LICENSE NOT
REQUIRED FOR TRAVEL RETAILER. (a) The commissioner may issue to
an applicant under this chapter a specialty license that authorizes
the license holder to sell, solicit, or negotiate travel insurance
through a licensed insurer.
(b) Notwithstanding any other provision of this chapter or
this code, [the commissioner may issue a specialty license to] a
travel retailer that operates on behalf of and under the license and
direction of a supervising entity does not require a license issued
under this title, subject to Section 4055.153 [agency, the
franchisee of a travel agency, or a public carrier that complies
with this subchapter. The specialty license may be issued only for
the limited purposes specified by this subchapter].
Sec. 4055.153. AUTHORITY OF TRAVEL RETAILER [AGENCY OR
FRANCHISEE]. (a) A travel retailer may offer and disseminate
travel insurance as a service to the retailer's customers on behalf
of and under the license and direction of a supervising entity
[agency or franchisee licensed under this chapter may act as an
agent for an authorized insurer] only:
(1) in connection with the sale or arrangement of
transportation, [or] accommodations, or events for travelers; and
(2) with respect to travel insurance that includes:
(A) accident and health insurance that provides
coverage to a traveler for accidental death or dismemberment and
for medical expenses resulting from an accident or sickness
involving the traveler that occurs during the planned trip;
(B) insurance that provides coverage to a
traveler for expenses incurred as a result of trip cancellation or
interruption of a planned trip or event;
(C) personal effects insurance that provides
coverage to a traveler for loss of or damage to personal effects
during the planned trip or event;
(D) insurance that provides coverage for damage
to accommodations or rental vehicles [life insurance not exceeding
$150,000 on any one life covering risks of travel during a planned
trip]; or
(E) any other coverage the commissioner approves
as meaningful and appropriate in connection with the transportation
or accommodations arranged through a travel agency.
(b) Travel insurance does not include major medical expense
coverage for a traveler on a planned trip for six months or more,
including:
(1) an individual working abroad;
(2) an expatriate; and
(3) a military service member on deployment.
SECTION 5. Subchapter D, Chapter 4055, Insurance Code, is
amended by adding Sections 4055.154, 4055.155, 4055.156, and
4055.157 to read as follows:
Sec. 4055.154. TRAVEL INSURANCE GENERALLY. (a) A travel
retailer, or the supervising entity, shall provide to a traveler
seeking to purchase travel insurance:
(1) a description of the material terms or the actual
terms of the coverage;
(2) a description of the claims filing process;
(3) a description of the review and cancellation
process for the insurance policy; and
(4) the name and contact information for the insurer
and the supervising entity.
(b) Travel insurance coverage may be provided under an
individual policy or a group or master policy.
Sec. 4055.155. DUTIES OF INSURERS AND SUPERVISING ENTITIES.
(a) An insurer must notify the department in the manner prescribed
by the commissioner by rule of the designation of a supervising
entity described by Subsection (b).
(b) A supervising entity designated by an insurer that
provides travel insurance may authorize a travel retailer to offer
and disseminate a travel insurance policy on behalf of the
supervising entity by establishing a retailer registry.
(c) The registry established under Subsection (b) must be
maintained and updated on an ongoing basis in a form prescribed by
the commissioner by rule. The registry must include the name,
address, and contact information, and federal employer
identification number, if any, of each registered travel retailer
and an individual contact person at the retailer.
(d) The registry must be submitted to the department on the
request of the commissioner.
(e) The supervising entity must certify in a form prescribed
by the commissioner by rule that each registered travel retailer is
in compliance with 18 U.S.C. Section 1033.
(f) The supervising entity shall designate an individual
who is an officer of the entity and a licensed agent as the
compliance officer responsible for compliance with insurance laws,
rules, and regulations related to travel insurance.
(g) The compliance officer and the officers of the
supervising entity that direct or control the travel insurance
business of the supervising entity must submit fingerprints as
required by the commissioner by rule.
(h) The supervising entity shall provide travel insurance
instruction and training to each employee of a registered travel
retailer whose duties include offering and disseminating travel
insurance. The instruction and training material are subject to
review by the commissioner and must include instruction relating to
the insurance offered, ethical sales practices, and required
disclosures to travelers.
(i) The supervising entity is responsible for the acts of a
travel retailer and shall use reasonable means to ensure each
registered retailer's compliance with this subchapter.
Sec. 4055.156. DUTIES OF TRAVEL RETAILERS. (a) A travel
retailer offering and disseminating travel insurance under this
subchapter shall register with an insurer in a registry established
under Section 4055.155.
(b) The travel retailer shall make available to travelers
brochures or other written materials that:
(1) provide the name, address, and contact information
of the authorized insurer and the supervising entity;
(2) explain that the purchase of travel insurance is
not required for the purchase from the travel retailer of any other
product or service; and
(3) disclose that the travel retailer is authorized to
provide general information about travel insurance, including a
description of coverage and the price for coverage, but is not
qualified or authorized to provide answers to questions about
specific policy terms or to evaluate the adequacy of the traveler's
existing insurance coverage.
(c) A travel retailer may not:
(1) evaluate or interpret technical words or phrases
used in a travel insurance policy or benefits under or terms of the
policy;
(2) evaluate or provide advice related to a traveler's
existing insurance coverage; or
(3) advertise or otherwise hold out the travel
retailer as a license holder or an insurance expert.
(d) A travel retailer that complies with this subchapter may
receive compensation for offering and disseminating travel
insurance on behalf of a supervising entity on or after the date the
retailer registers with the insurer under this subchapter.
Sec. 4055.157. ENFORCEMENT. A supervising entity and a
travel retailer registered with the supervising entity are subject
to Chapters 82 and 83 and Subtitle C, Title 5.
SECTION 6. The commissioner of insurance shall promulgate
forms described by Section 4055.155, Insurance Code, as added by
this Act, as soon as practicable after the effective date of this
Act, but not later than January 1, 2014.
SECTION 7. This Act applies only to a travel insurance
policy that is delivered, issued for delivery, or renewed on or
after January 1, 2014. A policy delivered, issued for delivery, or
renewed before January 1, 2014, is governed by the law as it existed
immediately before the effective date of this Act, and that law is
continued in effect for that purpose.
SECTION 8. This Act takes effect September 1, 2013.
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