HOUSE OF REPRESENTATIVES
TWENTY-SEVENTH LEGISLATURE, 2014
STATE OF HAWAII
A BILL FOR AN ACT
relating to travel insurance.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Chapter 431, article 9A, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:
"Part . Limited lines travel insurance producer
§431:9A-A Definitions. Unless specified otherwise, the following terms shall mean as follows:
"Limited lines travel insurance producer" means a:
(1) Licensed managing general underwriter;
(2) Licensed managing general agent or third party administrator; or
(3) Licensed insurance producer, including a limited lines producer;
designated by an insurer as the travel insurance supervising entity as set forth in subsection 431:9A-B(a)(2).
"Offer and disseminate" means providing general information, including a description of the coverage and price, as well as processing the application, collecting premiums, and performing other non-licensable activities permitted by the State.
(1) Means insurance coverage for personal risks incident to planned travel, including but not limited to:
(A) Interruption or cancellation of trip or event;
(B) Loss of baggage or personal effects;
(C) Damages to accommodations or rental vehicles; or
(D) Sickness, accident, disability, or death occurring during travel; and
(2) Does not include major medical plans that provide comprehensive medical protection for travelers with trips lasting six months or longer, including plans that cover those working overseas as an expatriate or deployed military personnel.
"Travel retailer" means a business entity 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 producer.
§431:9A-B Requirements. (a) Notwithstanding any other provision of law, the commissioner may issue to an individual or business entity that has filed with the commissioner an application for a limited license in a form and manner prescribed by the commissioner, a limited lines travel insurance producer license that authorizes the limited lines travel insurance producer to sell, solicit, or negotiate travel insurance through a licensed insurer. A travel retailer may offer and disseminate travel insurance under a limited lines travel insurance producer business entity license only if the following conditions are met:
(1) The limited lines travel insurance producer or travel retailer provides to purchasers of travel insurance:
(A) A description of the material terms or the actual material terms of the insurance coverage;
(B) A description of the process for filing a claim;
(C) A description of the review or cancellation process for the travel insurance policy; and
(D) The identity and contact information of the insurer and limited lines travel insurance producer;
(2) At the time of licensure, the limited lines travel insurance producer establishes and maintains a register on a form prescribed by the commissioner of each travel retailer that offers travel insurance on the limited lines travel insurance producer's behalf; provided that:
(A) The register is maintained and updated annually by the limited lines travel insurance producer and includes the name, address, and contact information of the travel retailer, an officer or person who directs or controls the travel retailer's operations, and the travel retailer's federal tax identification number;
(B) The limited lines travel insurance producer submits the register to the commissioner upon reasonable request; and
(C) The limited lines travel insurance producer also certifies that the travel retailer in the register complies with 18 United States Code section 1033;
(3) The limited lines travel insurance producer designates one of its employees, who shall be a licensed individual producer, as the designated responsible producer for purposes of compliance with the travel insurance laws and rules of the State;
(4) The designated responsible producer, president, secretary, treasurer, or any other officer or person who directs or controls the limited lines travel insurance producer's insurance operations complies with any fingerprinting requirements applicable to insurance producers;
(5) The limited lines travel insurance producer pays all applicable insurance producer licensing fees; and
(6) The limited lines travel insurance producer requires any employee or authorized representative of the travel retailer whose duties include offering and disseminating travel insurance to receive instruction or training, which may be subject to review by the commissioner; provided that the training includes, at minimum, instruction on the types of insurance offered, ethical sales practices, and required disclosures to prospective customers.
(b) A limited lines travel insurance producer, and those persons registered under its license, shall be exempt from the examination requirements of section 431:9A-105 and from the continuing education requirements of section 431:9A-124.
(c) Any travel retailer offering or disseminating travel insurance shall make available to prospective purchasers written materials, either printed or electronically, that:
(1) Provide the identity and contact information of the insurer and the limited lines travel insurance producer;
(2) Explain that the purchase of travel insurance is not required in order to purchase any other product or service from the travel retailer; and
(3) Explain that an unlicensed travel retailer is permitted to provide general information about the insurance offered by the travel retailer, including a description of the coverage and price, but is not qualified or authorized to answer technical questions about the terms and conditions of the insurance offered by the travel retailer or to evaluate the adequacy of the customer's existing insurance coverage.
(d) Any employee or authorized representative of the travel retailer who is not licensed as an insurance producer shall not:
(1) Sell, solicit, or negotiate insurance;
(2) Evaluate or provide advice concerning a prospective purchaser's existing insurance coverage; or
(3) Hold oneself out as a licensed insurer, licensed producer, or insurance expert.
(e) Notwithstanding any other provision of law, a travel retailer, its employees, and authorized representatives shall be authorized to offer and disseminate travel insurance on behalf of, and under the direction of, a limited lines travel insurance producer and receive compensation for their services; provided that the limited lines travel insurance producer registers the travel retailer pursuant to subsection (a)(2).
No travel retailer shall be compensated based primarily upon the number of customers who purchase travel insurance.
Nothing in this part shall prohibit payment of compensation to a travel retailer or its employees for activities under the limited lines travel insurance agent's license that is incidental to the travel retailer's or its employees overall compensation.
(f) Travel insurance may be offered under an individual policy or under a group or master policy.
(g) As the insurer designee, the limited lines travel insurance producer shall be responsible for the acts of the travel retailer and shall use reasonable means to ensure compliance by the travel retailer with this section.
(h) The limited lines travel insurance producer and any travel retailer offering and disseminating travel insurance under the limited lines travel insurance producer license shall be subject to the article 13."
SECTION 2. Section 431:9A-107.5, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) Notwithstanding any other provision of this article, the commissioner may issue:
(1) A limited license to persons selling limited
lines travel [
tickets of a common carrier of persons or property who
shall act only as to travel ticket policies of accident and health or sickness
insurance or baggage insurance on personal effects;] insurance, as
defined in section 431:9A-A;
(2) A limited license to each individual who has charge of vending machines used in this State for the effectuation of travel insurance;
(3) A limited license to any individual who sells policies of accident and health or sickness insurance as a promotional device to improve the circulation of a newspaper in this State; or
(4) A limited line credit insurance producer license to any individual who sells, solicits, or negotiates limited line credit insurance."
SECTION 3. In codifying the new sections added by section 1 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.
SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 5. This Act shall take effect upon its approval.
Travel Insurance; Producers; Licensing
Establishes a limited lines travel insurance producer license for producers selling, soliciting, or negotiating travel insurance through a licensed insurer. Authorizes travel retailers to offer the insurance if registered by a limited lines travel insurance producer.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.