BILL NUMBER: AB 2354 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Solorio
FEBRUARY 24, 2012
An act to amend Sections 1752, 1757, and 10296 of, to add Section
1754 to, to repeal Section 10295 of, and to repeal and add Sections
1753 and 1755 of, the Insurance Code, relating to travel insurance.
LEGISLATIVE COUNSEL'S DIGEST
AB 2354, as introduced, Solorio. Travel insurance.
Existing law authorizes the issuance of limited licenses as travel
insurance agents for employees of railroads, steamships, airlines,
and other organizations engaged in transporting persons as common
carriers and to individuals or employees of persons engaged in
selling transportation on those common carriers.
This bill would revise and recast the provisions related to travel
insurance by, among other things, changing the definition of travel
insurance to delete references to transportation ticket policies in
disability insurance policies and include interruption or
cancellation of a trip or event, loss of baggage or personal effects,
damages to accommodations or rental vehicles, and sickness,
accident, disability, or death occurring during travel. The bill
would also authorize limited licenses as travel insurance agents to
be issued to any person engaged in transacting travel insurance, as
specified, including, but not limited to, a travel retailer, as
defined. The bill would also authorize a travel retailer to transact
travel insurance on behalf of and under the license of a limited
lines travel insurance agent licensed as a business organization and
following certain administrative and disclosure requirements.
Existing law requires that a limited license to sell travel
insurance be applied for and renewed in the same manner as is
provided for a licensee to act as a property broker-agent or a
casualty broker-agent, and pay a filing fee, except that an applicant
for a limited license as a travel insurance agent need not pass a
qualifying examination.
This bill would delete the filing fee and the requirement that the
license be applied for and renewed in the same manner as is provided
for a licensee to act as a property broker-agent or a casualty
broker-agent, and additionally would require that the applicant file
with the Insurance Commissioner a written application for licensure,
signed by the applicant or an officer of the applicant, in the form
prescribed by the commissioner, and a notice of appointment
appointing the licensee as the insurer's agent.
The bill would make conforming changes and delete obsolete
provisions.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1752 of the Insurance Code is amended to read:
1752. Limited licenses as travel insurance agents may be issued
to employees of railroad, steamship, airline, and other
organizations engaged in transporting persons as common carriers and
to individuals or employees of persons engaged in selling
transportation on such common carriers any person
engaged in transacting travel insurance, including travel retailers
not otherwise meeting the conditions set forth in Section 1754 .
SEC. 2. Section 1753 of the Insurance Code is repealed.
1753. Travel insurance agents are restricted to the sale of
insurance to persons entitled by ticket or otherwise to
transportation on a common carrier, as follows:
(a) Transportation ticket policies in the form prescribed by
Chapter 4, Part 2, Division 2, of this code.
(b) Baggage insurance on the personal effects of such persons
while in transit or while in any hotel or other building en route
during any journey.
SEC. 3. Section 1753 is added to the Insurance Code, to read:
1753. As used in this article, the following terms have the
following meanings:
(a) "Limited lines travel insurance agent" means an insurer
designee, such as a managing general underwriter, managing general
agent, or licensed limited lines travel insurance agent.
(b) (1) "Travel insurance" means insurance coverage for personal
risks incident to planned travel, including, but not limited to, one
or more of the following:
(A) Interruption or cancellation of a trip or event.
(B) Loss of baggage or personal effects.
(C) Damages to accommodations or rental vehicles.
(D) Sickness, accident, disability, or death occurring during
travel.
(2) 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 ex-patriot or military personnel being deployed.
(c) "Travel retailer" means a business organization engaged in
transacting travel insurance.
SEC. 4. Section 1754 is added to the Insurance Code, to read:
1754. (a) A travel retailer may transact travel insurance on
behalf of and under the license of a limited lines travel insurance
agent licensed as a business organization, only if the licensee holds
a qualifying license and appointment under this article, and all of
the following apply:
(1) The licensee is clearly identified as the licensed limited
lines travel insurance agent on marketing materials and fulfillment
packages distributed by the travel retailers to customers.
Identification shall include the licensee's name and contact
information.
(2) The licensee shall establish at the time of licensure and
maintain a register of each travel retailer that transacts travel
insurance on the licensee's behalf. The register shall be maintained
and updated annually by the licensee in a form prescribed by, or
format acceptable to, the commissioner and shall include the name and
contact information of the travel retailer and an officer or person
who directs or controls the travel retailer's operations, and the
travel retailer's federal employer identification number (FEIN). The
licensee shall also certify that the registered travel retailer
complies with Section 1033 of Title 18 of the United States Code. The
licensee shall submit the register for review and inspection upon
request by the department.
(3) The licensee has designated one of its employees as a licensed
individual producer responsible for the licensee's compliance with
the insurance laws, rules, and regulations of the state.
(4) The designated responsible limited lines travel insurance
agent, president, secretary, treasurer, and any other officer or
person who directs or controls the licensee's insurance operations
comply with the fingerprinting requirements applicable to insurance
producers in the resident state of the business organization.
(5) The licensee has paid all applicable insurance agent licensing
fees required under California law.
(6) The licensee requires each employee of the travel retailer
whose duties include transacting travel insurance to receive a
program of instruction or training. The training shall be provided
whenever there is a material change that requires a modification to
the training materials, but in no event less frequently than every
three years. Training materials used by or on behalf of the licensee
to train the employees of a travel retailer shall be submitted to the
department at the time the business organization applies for a
license under this article, and whenever modified thereafter. The
training materials, at a minimum, should contain instruction on the
types of insurance offered, ethical sales practices, and disclosures
to prospective customers. Any changes to previously submitted
training materials shall be submitted to the department with the
changes highlighted 30 days prior to their use by the licensee.
Training materials and changes to those materials submitted to the
department pursuant to this subdivision shall be deemed approved for
use by the licensee unless it is notified by the department to the
contrary. Failure by a licensed business organization to submit
training materials or changes for departmental review or use of
unapproved or disapproved training materials shall constitute grounds
for denial of an application for a license, nonrenewal of a license,
or suspension of a license, as appropriate.
(b) A travel retailer, including its employees, whose activities
are limited to offering and disseminating travel insurance on behalf
of and under the direction of a licensee meeting the conditions
stated in subdivision (a), is authorized to do so and receive related
compensation. For purposes of this section, "offering and
disseminating" means a nonlicensable activity of providing general
information, including a description of the coverage and price, as
well as processing the application, collecting premiums, and
performing other nonlicensable activities permitted by the state.
(c) The licensee may not otherwise pay any compensation to a
travel retailer or its employees, based primarily on the number of
customers electing coverage from the travel retailer. However,
nothing in this code shall prohibit payment of compensation to a
travel retailer or its employees for activities under the limited
lines travel insurance agent's license that are incidental to the
travel retailer's or its employees overall compensation.
(d) As the insurer designee, the licensee is responsible for the
acts of the travel retailer.
SEC. 5. Section 1755 of the Insurance Code is repealed.
1755. That license shall be applied for and renewed in the same
manner as is provided in this chapter for a licensee to act as a
property broker-agent or a casualty broker-agent, except that an
applicant for a limited license as a travel insurance agent need not
pass a qualifying examination, and that the fee for filing an
application shall be sixteen dollars ($16) for each year or fraction
thereof in the term of the license applied for.
SEC. 6. Section 1755 is added to the Insurance Code, to read:
1755. (a) An applicant for a limited lines travel insurance agent
license need not pass a qualifying examination.
(b) An applicant for a limited lines travel insurance agent
license under this article shall file the following documents with
the commissioner:
(1) A written application for licensure, signed by the applicant
or an officer of the applicant, in the form prescribed by the
commissioner.
(2) A notice of appointment appointing the licensee as the insurer'
s agent.
SEC. 7. Section 1757 of the Insurance Code is amended to read:
1757. The commissioner may make reasonable rules and regulations
necessary for the convenient administration of the provisions of this
code respecting the licensing and renewal of licenses of
travel insurance agents implementation of this article
.
SEC. 8. Section 10295 of the Insurance Code is repealed.
10295. A transportation ticket policy is any ticket policy of
disability insurance sold at transportation stations, depots, or
ticket offices by the employees of railroads, steamship lines, air
lines and other organizations engaged in transporting persons as
common carriers, or by individuals or employees of persons engaged in
selling transportation on such common carriers, having as its
dominant feature the protection of the insured from a transportation
hazard.
SEC. 9. Section 10296 of the Insurance Code is amended to read:
10296. The following written notice shall be provided to every
potential applicant for a transportation ticket
policy of travel insurance that includes coverage for sickness,
accident, or disability and is offered pursuant to the provisions of
Article 15 (commencing with Section 1752) of Chapter 5 of Part 2 of
Division 1 at the time the sales presentation is made:
"NOTICE: This plan contains disability insurance benefits or
health insurance benefits, or both, that only apply during the
covered trip. You may have coverage from other sources that already
provides you with these benefits. You should review your existing
policies. If you have any questions about your current coverage, call
your insurer or health plan."