BILL NUMBER: AB 2354 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 11, 2012
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
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 limited licenses as the
Insurance Commissioner to issue a limited lines travel
insurance agents to be issued agent license
to any person organization
engaged in transacting travel insurance, as specified, including
, but not limited to, a travel retailer,
as defined retailers, as specified . The bill
would also authorize a travel retailer revise
the defini tion of a limited lines travel insurance agent
to mean an insurer designee that is licensed 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 , under specified
conditions. The bill would require the licensed limited lines travel
insurance agent to follow administrative and disclosure
requirements , such as including the agent's name, license
number, and contact information on the marketing materials and
packages, and requiring the agent to establish and maintain a
register of 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 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, those provisions and
additionally 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,
and a notice of appointment appointing the licensee as the insurer's
agent 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 in an amount determined by the Department of
Insurance as sufficient to defray the department's actual costs of
processing the application, as specified .
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 any person The commissioner may issue a
limited lines travel insurance agent license to any organization
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.
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
that is licensed to transact travel insurance, as
specified in subdivision (b) .
(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 expatriate 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. 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 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: a limited lines travel
insurance agent pursuant to this article under the following
conditions:
(1) The licensee 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. Identification shall include the licensee's name
The materials and packages shall include the agent's
name, license number, 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.
(3) The licensed limited lines travel insurance agent shall
designate 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.
(4) The employee designated by the licensed limited lines travel
insurance agent described in 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 comply with the background check requirements as required by
the commissioner.
(5) The licensee The licensed
limited lines travel insurance agent has paid all applicable
insurance agent licensing fees required under
California law.
(6) The licensee The licensed limited
lines travel insurance agent 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 limited lines
travel agent to train the employees of a travel retailer shall
be submitted to the department at the time the business
organization 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
licensee 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 licensee limited
lines travel insurance agent unless it is notified by the
department to the contrary. Failure by a licensed business
organization 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, as
appropriate or other action as deemed appropriate by
the commissioner .
(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.
(b) A travel retailer and its employees, who meet 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 authorized to receive
compensation. For the purpose of this section, "offering and selling"
includes licensable and nonlicensable activity.
(c) The licensee Neither the
insurer nor the licensed limited lines travel insurance agent
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 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.
(d) As the insurer designee, the licensee is responsible for the
acts of the travel retailer.
(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 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.
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.
(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 make 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."