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ARIZONA HOUSE OF REPRESENTATIVESFifty-fourth Legislature Second Regular Session |
Senate: FIN DP 8-1-1-0 | 3rd Read 27-2-1-0 |
SB 1041: travel insurance
Sponsor: Senator Livingston, LD 22
Committee on Regulatory Affairs
Overview
Adds Chapter 28 (Travel Insurance) to Title 20 (Insurance) statutes. Outlines the following regarding the "Travel Insurance Model Act" (Act): premium tax, travel protection plans, sales practices, travel administrators and travel insurance classification.
History
Travel insurance (TI) means insurance coverage for personal risks incident to planned travel including:
1) Interruption or cancellation of a trip or event;
2) Loss of baggage or personal effects;
3) Damages to accommodations or rental vehicles; and
4) Sickness, accident, disability or death occurring during travel.
TI does not include major medical plans, which provide comprehensive medical protection for travelers with trips lasting six months or longer, including those working overseas as expatriates or military personnel being deployed (A.R.S. § 20-333).
A travel retailer (Retailer) may offer and issue TI under a limited lines travel insurance producer (Producer) business entity license if the Producer meets the statutory requirements. Producers and those registered under the Producer's license are exempt from the examination requirements and continuing education requirements (A.R.S. § 20-333).
Provisions
Premium Tax (Sec. 4)
1. States that a travel insurer must pay premium tax on TI premiums paid by the following who reside in this state:
a) An individual primary policy holder;
b) A primary certificate holder who elects coverage under a group TI policy; and
c) A blanket TI policy holder that meets certain specified conditions.
2. Requires a travel insurer to:
a) Document the state of residence or principal place of business of the policy or certificate holder (PCH); and
b) Report only the premium amount allocable to TI and not the amounts received for travel assistance services or cancellation fee waivers.
Travel Protection Plans (Sec. 4)
3. States that travel protection plans (Plan) can be offered for one price for the combined features if both:
a) The Plan clearly discloses, at or before the time of purchase, that it includes travel insurance, travel assistance services and cancellation fee waivers (Features);
i. Additional information regarding the Features and pricing of each Plan must also be included; and
b) The fulfillment materials (FM) both;
i. Describe and delineate the Features in the Plan; and
ii. Include the TI disclosures and the contact information for persons providing travel assistance services and cancellation fee waivers.
Sales Practices (Sec. 4)
4. States that all persons offering TI in this state are subject to unfair trade practices (UTP) and fraud.
a) States that if a conflict exists between the Act and another provision under the Insurance statutes regarding the sale of TI, the Act controls.
5. States that offering or selling a TI policy that could never result in payment of any claims is a UTP.
6. Requires all documents provided to consumers before the purchase of TI to be consistent with the TI policy.
7. Requires TI policies that contain preexisting condition exclusions to provide information regarding the preexisting condition exclusions before the time of purchase and in the coverages FM.
8. Requires the FM and specified information to be provided to a PCH as soon as practicable following the purchase of a Plan, unless the insured has either started a covered trip or filed a claim.
9. States that a PCH may cancel a policy or certificate for a full refund of the Plan price from the date of purchase of the Plan until at least either:
a) 15 days after the date of delivery of the Plan's FM by postal mail; or
b) 10 days after the date of delivery of the Plan's FM by means other than postal mail.
10. Requires the policy documentation and the FM to disclose whether the travel insurance is primary or secondary to other applicable coverage.
11. States that if TI is marketed directly on an insurer's website or through an aggregator website, it is not a UTP or violation of law, if an accurate summary or description of the coverage is provided and the full provisions of the policy are available for the consumer through electronic means.
12. Prohibits a person from offering, soliciting or negotiating TI or Plans on an individual or group basis by using an opt out option that requires a consumer to deselect coverage, such as unchecking a box on an electronic form, when the consumer purchases a trip.
13. States that it is a UTP to market blanket TI coverage as free.
14. States that if a consumer's destination requires insurance coverage, it is not a UTP to require a consumer to choose between the following options as a condition of purchasing a trip or travel package:
a) Purchasing the coverage through the Retailer or limited lines Producer supplying the trip or travel package; or
b) Agreeing to obtain and provide proof of coverage that meets the destination's requirements before departure.
Travel Administrators (Sec. 4)
15. Prohibits a person from acting or representing itself as a travel administrator (TA) for TI in this state unless the person either:
a) Is a licensed property and casualty insurance producer for activities allowed under that producer license; or
b) Holds a valid managing general agent license in this state.
16. Exempts a TA and its employees from the licensing requirements for travel it administers.
17. States that an insurer that underwrites TI is responsible for the acts of the TA administering the TI.
a) States that the insurer must ensure that the TA maintains all books and records relevant to the insurer and make the books and records available to the Director of the Department of Insurance upon request.
Classification (Sec. 4)
18. States that TI is classified and filed under an inland marine line of insurance for purposes of rate and forms.
19. States that a TI that provides coverage for sickness, accident, disability or death occurring during travel, either exclusively or in conjunction with related coverages, may be filed under either:
a) An accident and health line of insurance; or
b) An inline marine line of insurance.
20. States that TI may be an individual, group or blanket policy.
21. States that eligibility and underwriting standards for TI may be developed based on Plans that are designed for individual or identified marketing or distribution channels, if those standards also meet the state underwriting standards for inland marine.
Miscellaneous
22. Transfers existing statute relating to Producer licensing to the Act. (Sec. 3)
23. States that this act may be cited as the "Travel Insurance Model Act" (Sec. 5)
24. Contains a purpose and applicability clause. (Sec. 2)
25. Defines pertinent terms. (Sec. 2)
26.
Makes conforming changes. (Sec. 1, 3)
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30. SB 1041
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