BILL NUMBER: AB 2354	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 4, 2012
	AMENDED IN ASSEMBLY  APRIL 11, 2012

INTRODUCED BY   Assembly Member Solorio

                        FEBRUARY 24, 2012

   An act to amend Sections 1752  ,   and 
1757  , and 10296  of, to add Section 1754 to, to
repeal  Section   Sections  10295  and
10296  of, and to repeal and add Sections1753 and 1755 of, the
Insurance Code, relating to travel insurance.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2354, as amended, 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 the Insurance Commissioner to
issue a limited lines travel insurance agent license to any
organization engaged in transacting travel insurance  , as
specified, including   through  travel retailers,
as  specified. The bill   tho   se
terms are defined, and would  also revise the definition
of   define  a limited lines travel insurance
agent to mean an insurer designee that is licensed to transact travel
insurance  , under specified conditions  . The bill
would require the licensed limited lines travel insurance agent 
and a travel retailer  to follow administrative and disclosure
requirements, such as including the agent's  name, license
number, and contact   identification  information
 on   and making certain disclosures to the
consumer in  the marketing materials and  fulfillment 
packages, and requiring the agent to establish and maintain a
register  of  noting  each travel retailer
that transacts travel insurance.
   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 that an applicant 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 those provisions and would instead require
that the applicant for a limited lines travel insurance agent license
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, a certificate by the
insurer on a form prescribed by the commissioner stating, among other
things, that the insurer has satisfied itself that the applicant is
trustworthy and competent to act as its limited lines travel
insurance agent, and an application fee  and a renewal fee 
in an amount determined by the  Department of Insurance
  commissioner  as sufficient to defray the
 department's actual costs of processing the application, as
specified   increased reasonable costs incurred by the
department to implement the provisions of this bill  . 
   The bill would authorize the commissioner to take disciplinary
action against a limited lines travel insurance agent for a violation
of the provisions of the Insurance Code by a travel retailer or a
travel retailer's employee. 
   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.  The commissioner may issue a limited lines travel insurance
agent license to any organization engaged in transacting travel
insurance  , including   through  travel
retailers not otherwise meeting the conditions set forth in Section
1754.
  SEC. 2.  Section 1753 of the Insurance Code is repealed.
  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 that is licensed to transact travel insurance, as 
specified   defined  in subdivision (b). 
   (b) "Transact" means, for the purposes of this article, the
following activities when engaged in by a travel retailer:  

   (1) Offering and disseminating information to a prospective or
current policyholder on behalf of a limited lines travel insurance
agent, including brochures, buyer guides, descriptions of coverage,
and price.  
   (2) Referring specific questions regarding coverage features and
benefits from a prospective or current policyholder to a limited
lines travel insurance agent.  
   (3) Disseminating and processing applications for coverage,
coverage selection forms, or other similar forms in response to a
request from a prospective or current policyholder.  
   (4) Collecting premiums from a prospective or current policyholder
on behalf of a limited lines travel insurance agent.  
   (5) Receiving and recording information from a policyholder to
share with a limited lines travel insurance agent.  
   (b) 
    (c)  (1) "Travel insurance" means insurance coverage for
personal risks  incident   incidental  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 expatriate or military personnel being deployed. 
   (3) Travel insurance does not include damage waiver contracts, as
defined in paragraph (5) of subdivision (a) of Section 1936 of the
Civil Code. The phrase "damage waiver" or "collision damage waiver"
cannot be used to describe travel insurance coverage, but the
insurance contract may otherwise refer to "damage waiver" or
"collision damage waiver" provided by a company, as defined in
paragraph (1) of subdivision (a) of Section 1936 of the Civil Code.
 
   (c) 
    (d)  "Travel retailer" means a business organization
 engaged in transacting travel insurance  that
makes, arranges, or offers travel services and may offer and
disseminate travel insurance as a service to its customers on behalf
of and under the direction of a limited lines travel insurance agent
.
  SEC. 4.  Section 1754 is added to the Insurance Code, to read:
   1754.  Transaction of travel insurance under the license of an
organization holding a limited lines travel insurance agent license
shall be subject to the following conditions:
   (a) A  limited lines  travel  insurance agent may
authorize a travel  retailer  may   to
 transact travel insurance on behalf of and under  a
limited lines travel insurance agent pursuant to this article
  its authority  under the following conditions:
   (1) The  licensed  limited lines travel insurance
agent is clearly identified  as the licensed limited lines
travel insurance agent  on marketing materials and
fulfillment packages distributed by the travel retailers to
customers. The  marketing  materials and  fulfillment
 packages shall include the agent's name,  business address,
e   -mail address, telephone number, and  license
number  , and contact information  .
   (2) The  licensee shall establish   limited
lines travel insurance agent,  at the time of licensure and
 maintain   thereafter, maintains  a
register  of   noting  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  licensed  limited lines travel insurance
agent  shall designate   has designated 
one of its employees to be responsible for its compliance with the
insurance laws, rules, and regulations of the state.  That
employee shall also hold a license issued by the Insurance
Commissioner that authorizes the employee to transact insurance as
described in Section 1625 and paragraphs (1) and (2) of subdivision
(a) of Section 1626.   The limited lines travel
insurance agent and its designated   responsible employees
shall hold property, casualty, life-only, and accident and health
agent licenses, to the extent required by this chapter, based upon
the types of insurance transacted by the licensee. 
   (4) The employee designated by the  licensed 
limited lines travel insurance agent  described in
 , pursuant to  paragraph (3), and  the president,
secretary, treasurer, and any other officer or person who directs or
controls the operations of the limited lines travel insurance agent
shall   any of the organization's partners, members,
controlling persons, officers, directors, and managers  comply
with the background check requirements as required by the
commissioner.
   (5) The  licensed  limited lines travel insurance
agent has paid all applicable licensing fees required under
California law.
   (6) The  licensed  limited lines travel insurance
agent  requires   uses all reasonable means at
its disposal to ensure compliance by the travel retailer and the
travel retailer's employees with their obligations under this
article. This includes requiring  each employee of the travel
retailer whose duties include transacting travel insurance to receive
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 limited lines travel
agent to train the employees of a travel retailer shall be submitted
to the department at the time the travel agent 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 insurance 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 limited lines
travel insurance agent. Training materials and changes to those
materials submitted to the department pursuant to this subdivision
shall be deemed approved for use by the limited lines travel
insurance agent unless it is notified by the department to the
contrary. Failure by a limited lines travel insurance agent 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, or other action as deemed appropriate by
the commissioner. 
   (7) The limited lines travel insurance agent or the travel
retailer provides disclosure to the consumer in either the marketing
materials or fulfillment packages is substantively similar to the
following:  
   This plan provides insurance coverage that only applies during the
covered trip. You may have coverage from other sources that provides
you with similar benefits but may be subject to different
restrictions depending upon your other coverages. You may wish to
compare the terms of this policy with your existing life, health,
home, and automobile insurance policies. If you have any questions
about your current coverage, call your insurer or insurance agent or
broker.  
   (8) The travel retailer makes all of the following disclosures to
the prospective insured:  
   (A) That purchasing travel insurance is not required in order to
purchase any other product or service offered by the travel retailer.
 
   (B) If not individually licensed, that the travel retailer's
employee is not qualified or authorized to:  
   (i) Answer technical questions about the benefits, exclusions, and
conditions of any of the insurance offered by the travel retailer.
 
   (ii) Evaluate the adequacy of the prospective insured's existing
insurance coverage. 
   (b) A travel retailer  and its employees, who meet
  that meets  the requirements set forth in this
section and whose activities are limited to offering and selling
travel insurance on behalf of a licensed limited lines travel
insurance agent  , are   is  authorized to
receive compensation.  For the purpose of this section,
"offering and selling" includes licensable and nonlicensable
activity.  
   (c) Neither the insurer nor the licensed limited lines travel
insurance agent may 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
article 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.  
   (c) (1) If the commissioner determines that a travel retailer, or
a travel retailer's employee, has violated any provision of this
article or any other provision of this code, the commissioner may:
 
   (A) Direct the limited lines travel insurance agent to implement a
corrective action plan with the travel retailer.  
   (B) Direct the limited lines travel insurance agent to revoke the
authorization of the travel retailer to transact travel insurance on
its behalf and under its license and to remove the travel retailer's
name from its register.  
   (2) If the commissioner determines that a travel retailer, or a
travel retailer's employee, has violated any provision in this
article or any other provision of this code, the commissioner, after
notice and hearing, may:  
   (A) Suspend or revoke the license of the limited lines travel
insurance agent as authorized under this code.  
   (B) Impose a monetary fine on the limited lines travel insurance
agent.  
   (C) Take any other action authorized under this code.  
   (3) A limited lines travel insurance agent who aids and abets a
travel retailer in the transaction of travel insurance, as defined in
this code, or aids and abets a travel retailer in any activity
concerning travel insurance after being directed to revoke the travel
retailer's authorization, in addition to any other action authorized
under this code, shall be subject to a monetary penalty pursuant to
paragraphs (2) and (3) of subdivision (a) of Section 12921.8. 
   (d) The conduct of employees of the travel retailer who have been
designated to transact travel insurance on behalf of the licensed
limited lines travel insurance agent shall be deemed the conduct of
the licensed limited lines travel insurance agent for purposes of
this article.
  SEC. 5.  Section 1755 of the Insurance Code is repealed.
  SEC. 6.  Section 1755 is added to the Insurance Code, to read:
   1755.  (a) An applicant for a limited lines travel insurance agent
license under this article shall submit the following documents to
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 certificate by the insurer that is to be named in the
limited lines travel insurance agent license, stating that the
insurer has satisfied itself that the named applicant is trustworthy
and competent to act as its limited lines travel insurance agent and
that the insurer will appoint the applicant to act as its agent if
the travel insurance agent license applied for is issued by the
commissioner. The certification shall be subscribed by an officer or
managing agent of the insurer on a form prescribed by the
commissioner. 
   (3) An application fee, and for each license period thereafter, a
renewal fee, in an amount or amounts determined by the department as
sufficient to defray the department's actual cost of processing the
application or renewal and implementing this article.  
   (3) An application fee, and, for each license period thereafter, a
renewal fee, in an amount or amounts determined by the commissioner
as sufficient to defray the increased reasonable costs incurred by
the department from implementing the provisions of Assembly Bill
2354, as enacted in the 2011-12 Regular Session of the Legislature.

   (b) Notwithstanding any other provision of law to the contrary,
the provisions set forth in Sections 1667, 1668, 1668.5, 1669, 1670,
1738, and 1739 apply to any application for or issuance of a license
pursuant to this article.
   (c) Costs associated with any enforcement action  or
 investigation  shall be paid for by the
person or organization licensed pursuant to this article.
  SEC. 7.  Section 1757 of the Insurance Code is amended to read:
   1757.  The commissioner may adopt  reasonable 
rules and regulations  necessary  for  the
convenient administration of the provisions of this code respecting
 the implementation of this article.
  SEC. 8.  Section 10295 of the Insurance Code is repealed. 
  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 policy of travel insurance that includes
coverage for sickness, accident, or disability, or death benefits, or
all of those benefits 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." 
   SEC. 9.    Section 10296 of the  Insurance
Code   is repealed.  
   10296.  The following written notice shall be provided to every
potential applicant for a transportation ticket policy 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."