2013 -- S 0376

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LC01162

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

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A N A C T

RELATING TO INSURANCE

     Introduced By: Senators Bates, Picard, and Walaska

     Date Introduced: February 13, 2013

     Referred To: Senate Corporations

It is enacted by the General Assembly as follows:

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     SECTION 1. Title 27 of the General Laws entitled "INSURANCE" is hereby amended

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by adding thereto the following chapter:

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     CHAPTER 77

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LIMITED LINES TRAVEL INSURANCE ACT

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     27-77-1. Short title. -- This act shall be known and may be cited as the "Limited Lines

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Travel Insurance Model Act."

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     27-77-2. Definitions. -- As used in this chapter, the following terms shall mean:

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     (1) "Limited Lines Travel Insurance Producer" means a:

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     (i) Licensed managing general underwriter;

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     (ii) Licensed managing general agent or third-party administrator, or

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     (iii) Licensed insurance producer/agent designated by an insurer as the travel insurance

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supervising entity as set forth in section 27-77-6 below.

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     (2) "Offer and disseminate" means providing general information, including a description

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of the coverage and price, as well as processing the application, collecting premiums, and

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performing other non-licensable activities permitted by the state.

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     (3) "Travel Insurance" means insurance coverage for personal risks incident to planned

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travel, including but not limited to:

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     (i) Interruption or cancellation of trip or event;

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     (ii) Loss of baggage or personal effects;

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     (iii) Damages to accommodations or rental vehicles; or

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     (iv) Sickness, accident, disability or death occurring during travel.

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     Travel insurance does not include major medical plans, which provide comprehensive

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medical protection for travelers with trips lasting six (6) months or longer, including for example,

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those working overseas as an ex-patriot or military personnel being deployed.

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     (4) "Travel Retailer" means a business entity that makes, arranges or offers travel

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services and may offer and disseminate travel insurance as a service to its customers on behalf of

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and under the direction of a limited lines travel insurance producer.

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     27-77-3. Requirements. -- (a) A travel retailer may offer and disseminate travel

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insurance under a limited lines travel insurance producer business entity ("licensed business

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entity") license only if the limited lines travel insurance producer complies with the following:

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     (1) The limited lines travel insurance producer or travel retailer provides to purchasers of

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travel insurance:

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     (i) A description of the material terms or the actual material terms of the insurance

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coverage;

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     (ii) A description of the process for filing a claim;

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     (iii) A description of the review or cancellation process for the travel insurance policy;

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and

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     (iv) The identity and contact information of the insurer and limited lines travel insurance

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producer.

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     (2) At the time of licensure, the limited lines travel insurance producer shall establish and

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maintain a register on a form prescribed by the state insurance commissioner of each travel

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retailer that offers travel insurance on the limited lines travel insurance producer's behalf. The

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register shall be maintained and updated by the limited lines travel insurance producer and shall

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include the name, address, and contact information of the travel retailer and an officer or person

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who directs or controls the travel retailer's operations, and the travel retailer's federal employment

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identification number. The limited lines travel insurance producer shall submit such register to the

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state insurance department upon reasonable request. The limited lines travel insurance producer

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shall also certify that the travel retailer registered complies with applicable federal law.

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     (3) The limited lines travel insurance producer has designated one of its employees who

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is a licensed individual producer as the person (a "Designated Responsible Producer" or "DRP")

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responsible for the limited lines travel insurance producer's compliance with the travel insurance

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laws, rules and regulations of the state.

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     (4) The DRP, president, secretary, treasurer, and any other officer or person who directs

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or controls the limited lines travel insurance producer's insurance operations comply with the

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fingerprinting requirements applicable to insurance producers in the resident state of the limited

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lines travel insurance producer.

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     (5) The limited lines travel insurance producer has paid all applicable insurance producer

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licensing fees.

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     (6) The limited lines travel insurance producer requires each employee of the travel

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retailer whose duties include offering and disseminating travel insurance to receive a program of

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instruction or training, which may be subject to review by the commissioner. The training

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material shall, at a minimum, contain instructions on the types of insurance offered, ethical sales

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practices, and required disclosures to prospective customers.

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     (b) Any travel retailer offering or disseminating travel insurance shall make available to

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prospective purchasers brochures or other written materials that:

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     (1) Provide the identity and contact information of the insurer and the limited lines travel

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insurance producer;

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     (2) Explain that the purchase of travel insurance is not required in order to purchase any

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other product or service from the travel retailer; and

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     (3) Explain that an unlicensed travel retailer is permitted to provide general information

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about the insurance offered by the travel retailer, including a description of the coverage and

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price, but is not qualified or authorized to answer technical questions about the terms and

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conditions of the insurance offered by the travel retailer or to evaluate the adequacy of the

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customer's existing insurance coverage;

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     (c) A travel retailer who is not licensed as an insurance producer may not:

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     (1) Evaluate or interpret the technical terms, benefits, and conditions of the offered travel

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insurance coverage;

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     (2) Evaluate or provide advice concerning a prospective purchaser's existing insurance

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coverage; or

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     (3) Hold himself/herself or itself out as a licensed insurer, licensed producer, or insurance

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expert.

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     27-77-4. Registration. -- A travel retailer whose insurance-related activities, and those of

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its employees, are limited to offering and disseminating travel insurance on behalf of and under

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the direction of a limited lines travel insurance producer meeting the conditions stated in this

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chapter, is authorized to do so and receive related compensation, upon registration by the limited

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lines travel insurance producer as described in this chapter.

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     27-77-5. Policy. -- Travel insurance may be provided under an individual policy or under

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a group or master policy.

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     27-77-6. Responsibility. -- As the insurer designee, the limited lines travel insurance

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producer is responsible for the acts of the travel retailer and shall use reasonable means to ensure

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compliance by the travel retailer with this chapter.

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     27-77-7. Enforcement. -- The limited lines travel insurance producer and any travel

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retailer offering and disseminating travel insurance under the limited lines travel insurance

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producer license shall be subject to the penalties for violations of this chapter as may be

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promulgated by the commissioner of insurance.

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     SECTION 2. This act shall take effect ninety (90) days after enactment.

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LC01162

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO INSURANCE

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     This act would create the limited lines travel insurance act to establish requirements for

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travel insurance producers and travel agents who facilitate the purchase of travel insurance.

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     This act would take effect ninety (90) days after enactment.

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LC01162

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