NAIC Travel Insurance Model Law V2.1123487641

NAIC Travel Insurance Model Law V2.1123487641

August 24October 11September 20NovemberJanuary 18February 26March 124April 30, 20178

NATIONAL ASSOCIATION CONFERENCE OF INSURANCE LEGISLATORSCOMMISSIONERS (NCOILAIC)

Travel Insurance Model Act

Originally adopted by the NCOIL Property-Casualty Insurance Committee on November 16, 2012, and Executive Committee on November 18, 2012. Sponsored by Rep. Robert Damron (KY)

Updated version adopted by the NCOIL Property-Casualty Committee and Executive Committee on March 5, 2017. Amendments sponsored by Rep. Matt Lehman (IN)

Drafting Note: This Travel Insurance Model Act is intended to be enacted as a standalone chapter of the insurance code with appropriate cross references to seamlessly incorporate provisions such as licensing and premium tax into the adopting state’s existing statutory structure. Alternatively, sections such as the licensing and premium tax provisions that may fit into other sections of an adopting state’s statutory structure could be pulled from the Model and incorporated into the sections of the adopting state’s insurance code that address those topics.

Section 1. Short Title

This Act shall be known as the “Travel Insurance Model Act.”

Section 2. Scope and Purposes

A. The purpose of this Act is to promote the public welfare by creating a comprehensive legal framework within which Travel Insurance may be sold in this state.through the establishment of clear regulatory obligations for those involved in the development and distribution of Travel Insurance, preserving the unique aspects of Travel Protection Plans, and protecting and benefiting consumers by encouraging fair and effective competition within the market.

(8/8/17) – pared down unnecessary language Louisiana said there cannot be travel insurance outside of the travel protection plan per the definition of “travel protection plan”.

B. The requirements of this Act shall apply to Travel Insurance, whether or not provided as part of a Travel Protection Plan, where policies and certificates are delivered or issued for delivery in this state. It shall not be applicableapply to Cancellation Fee Waivers and Travel Assistance Services, except as expressly provided herein.

(8/8/17) Language removed per Louisiana. Cancellation Fee Waivers and Travel Assistance Services were later defined to not be travel insurance and therefore appropriate to exclude.

C. All other applicable provisions of this state’s insurance laws shall continue to apply to Travel Insurance except that the specific provisions of this Act shall supersede any general provisions of law that would otherwise be applicable to Travel Insurance.

(8/8/17) – Oklahoma suggested this addition to provide clarification that in the event of a conflict, this law would take precedence.

Section 3. Definitions

As used in this Act:

“Aggregator Site” means a website that provides access to information regarding insurance products from more than one insurer, including product and insurer information, for use in comparison shopping.

(3/12/18) CEJ proposed language to clarify issues around referral of business. The Working Group decided to defer this discussion to the Spring National Meeting.

(3/24/2018) There were no proposed changes to the definition so it stayed as-is.

“Blanket Travel Insurance” means a policy of Travel Insurance issued to any Eligible Group providing coverage for specified circumstances and specific classes of persons defined in the policy with coverage provided to all members of the Eligible Group without a separate charge to individual members of the Eligible Group.and issued to a policyholder and not by specifically naming the persons covered, by certificate or otherwise, although a statement of the coverage provided may be given, or required by policy to be given, to eligible persons.

(10/6/17) Language suggested by CEJ and offered by Oklahoma. Louisiana had suggested adding the sentence “Blanket Travel Insurance does not mean Group Travel Insurance as defined in this Act.” At the end of the definition. UStiA agreed with adding the sentence. Commissioner Redmer said there would be an opportunity to add that in the next review.

“CancellationFee Waiver” means a contractual agreement between a supplier of travel arrangements or travel services and its customer to waive some or all of the non-refundable cancellation fee or penalty provisions of the supplier’s underlying travel contract between the supplier and customer with or without regard to the reason for the cancellation or form of reimbursement. A CancellationFee Waiver is not insurance.

(12/12/17) Language was proposed by Oklahoma. The debate around this issue was related to ensuring the “cancellation fee waiver” was not, in actuality, an insurance product but simply a contractual agreement between the travel supplier and the consumer and not a way to avoid premium tax on an insurance product. The Working Group members unanimously agreed to the proposed language.

"Commissioner" means the commissioner of insurance of this state.

Drafting Note: Insert the title of the state’s chief insurance regulatory official wherever the term "Commissioner" appears.

Solely for the purposes of Travel Insurance, “Eligible Group” means any of the followingany association of two (2) or more personsople who are engaged in a common enterprise, or have an economic, educational, or social affinity or relationship, including but not limited to any of the following:having a common interest and organized and maintained in good faith for purposes other than obtaining insurance for members or participants of such association.:

Drafting Note: Examples of “eligible groups” include but are not limited to:

(11/27/17) – Oklahoma and Louisiana proposed the addition of “two (2) or more persons…relationship” to avoid any two people constituting a group. The language was unanimously adopted by the Working Group.

a.Any entity engaged in the business of providing travel or travel services, including but not limited to: tour operators, lodging providers, vacation property owners, hotels and resorts, travel clubs, travel agencies, property managers, cultural exchange programs, and common carriers or the operator, owner, or lessor of a means of transportation of passengers, including but not limited to airlines, cruise lines, railroads, steamship companies, and public bus carriers, wherein with regard to any particular travel or type of travel or travelers, al members or customers of the group must have a common exposure to risk attendant to such travel.;(11/27/18) – Oklahoma and Louisiana proposed the addition of “wherein with regard…risk attendant to such travel” to ensure common exposure for each traveler in the group. The Working Group unanimously adopted the language.

b.Any college, school, or other institution of learning covering students, teachers or employees or volunteersdefined by reference to specified hazards incident to activities or operations of the institution of learning;(11/7/17) – deletion of last phrase proposed by CEJ because it is unnecessary. Working Group was unanimous on this change.

c.Any employer covering any group of employees, volunteers, contractors, Board of Directors, dependents or guests, defined by reference to specified hazards incident to activities or operations of the employer;(11/7/17) – deletion of last phrase proposed by CEJ because it is unnecessary. Working Group was unanimous on this change.

(11/13/17) – Oklahoma proposed the addition of the word “volunteers” to this item. The Working Group unanimously agreed on this change and felt it allowed item “j” to be deleted.

d.Any sports team, camp, or sponsor thereof covering participants, members, campers, employees, officials, supervisors, or volunteers;

e.Any religious, charitable, recreational, educational, or civic organization or branch thereof covering any group of members, participants, or volunteers defined by reference to specified hazards incident to any activity or activities or operations sponsored or supervised by or on the premises of such organization or branch;(11/7/17) – deletion of final phrase proposed by CEJ because it is unnecessary.Working Group was unanimous on this change.

f.Any financial institution or financial institution vendor, or parent holding company, trustee, or agent of or designated by one or more financial institutions or financial institution vendors, under whichincluding accountholders, credit card holders, debtors, guarantors, or purchasers are insured;(11/7/17) – Changes proposed by CEJ and UStiA. Working Group was unanimous on this change.

g.Any incorporated or unincorporated association, including labor unions, having a common interest, constitution and bylaws, and organized and maintained in good faith for purposes other than obtaining insurance for members or participants of such association covering its members;

h. Any incorporated or unincorporated association, including labor unions, having a common interest, constitution and bylaws, and organized and maintained in good faith for purposes other than obtaining insurance for members or participants of such association covering its members;

hi.Any trust or the trustees of a fund established, created or maintained for the benefit of and covering members, employees or customers, subject to the Commissioner’s permitting the use of a trust and the state’s premium tax provisions in (refer to Section 5 herein or if not used, the state’s existing premium tax provisions) of one or more associations meeting the above requirements of section (h) above;

ij.Any entertainment production company covering any group of participants, volunteers, audience members, contestants, or workers;

j.Any newspaper or other publisher covering its journalists and carriers;(11/13/17) – Washington proposed deleting this language. It was determined to be duplicative of item (c). Working Group was unanimous on this change.

k.Any volunteer fire department, ambulance, rescue, police, court or any first aid, civil defense or other such volunteer group, or agency having jurisdiction thereof, covering all or any group of the members, participants or volunteers of such fire department or first aid, civil defense or other group; or(11/13/17) – Washington suggested deleting this item as it is duplicative of item (e). All but two members of the Working Group decided to keep this item. Illinois suggested striking language after “other such group” as it is duplicative. Washington suggested adding the word “volunteer” to the phrase “other such group”. The Illinois and Washington proposals were agreed upon unanimously.

l.Preschools, daycare institutions for children or adults and senior citizen clubs; or(11/13/17) – Language added per/AIA due to the deletion of previous items (m) and (n). All Working Group members agreed to addition except Washington.

m.Any automobile or truck rental or leasing company covering a group of individuals who may become renters, lessees, or passengers defined by their travel status on the rented or leased vehicles. The common carrier, the operator, owner or lessor of a means of transportation, or the automobile or truck rental or leasing company is the policyholder under a policy to which this sectin applies; or(11/13/17) – There was discussion as to how this item is different from rental car insurance and whether or not it should be deleted. Six Working Group members wanted it left as written, with one member deferring and three wanting it changed or deleted. Commissioner Redmer said the language would be left as-is for now but could be re-visited.

n.Any other group where the Commissioner has determined that the members are engaged in a common enterprise, or have an economic, educational, or social affinity or relationship, and that issuance of the policy would not be contrary to the public best interests of the public.(11/13/17) – There was discussion that the phrase “best interests of the public” might be unclear and create the possibility for litigation. Louisiana suggested the change to “public interests”. The Working group unanimously agreed on this amendment.

(10/6/17) Language drafted by the CEJ was proposed by Rhode Island along with a drafting note proposed by Missouri. Given there was still considerable differences of opinion among the Working Group members, Commissioner Redmer said to include the language in the next version of the model but that it would be discussed further on a subsequent conference call.

(10/31/17) Discussion regarding the number that would make up a group: UStiA and US Fire support two; TTICC and AIA support “two or more”; CEJ prefers five or more stating while “two” maybe be appropriate for two organizations it is questionable how two individuals justify a group. Oklahoma agreed noting it may be helpful to reference two or more “entities” as opposed to “individuals”. Commissioner Redmer said that could be “tweaked” on the next reviews. The Working Group members unanimously agreed to go with “two or more” for the next version of the model.

(10/31/17) There was lengthy discussion about whether to leave the list in the statute or put it in a drafting note. All Working Group members agreed to leave it in the statute with the exception of Utah.

Discussion of the list deferred to the next call.

(11/7/17) Lengthy discussion was held on the list included for “eligible groups”. It was determined it is not necessary for premium tax purposes and the policy language appears to be the same regardless of whether it is individual or group. The need to define it appeared to be related to “eliminating confusion” and there are administrative benefits to the company to offering policies based on groups. (Reference Ms. Alvarado’s comments.)

(11/7/17) CEJ’s proposal was to eliminate the list. No Working Group member offered CEJ’s simplified language.

(11/7/17) A series of “tweaking” the enumerated items was completed with little controversy.

(11/7/17) An open item related to item “h” was determined to be re-visited once the introductory language was finalized. This is related to potential redundancy in the language.

“Fulfillment materials” means documentation sent to the purchaser of a travel protection plan confirming the purchase and providing the travel protection plan’s coverage and assistance details, as applicable. (12/12/17) – TTICC asked if “sent” should be changed to “delivery through electronic or other means” for consistency. Commissioner Redmer said NAIC staff would double-check for wordsmithing and language consistency before finalizing. Utah proposed removing “as applicable” as that is implied. No Working Group members opposed this.

NOTE: NAIC staff was asked to check for consistency throughout the model in regard to the word “sent”. It is not used elsewhere but the provision of “fulfillment materials” is defined in Section 7-Sales Practices, item 3.

“Group Travel Insurance” means Travel Insurance issued to any Eligible Group.

(10/6/17) Language was suggested by CEJ that would add “through a group insurance policy” to the end of the definition but no Working Group member offered that language.

“Limited Lines Travel Insurance Producer” means a(i) licensed managing general agent or third party administrator, (ii) licensed insurance producer, including a limited lines producer, or (iii) Travel Administrator.

(9/28/17) There was lengthy discussion regarding this definition. IIABA said it was “circular”; CEJ suggested language; Washington supported the concerns expressed; TTICC said it tracks to earlier versions and there have been no problems with it; UStiA said this would ensure travel administrators will either be an MGA, TPA or licensed insurance producer. As CEJ was the only entity proposing specific language changes, Commissioner Redmer asked if any Working Group member wished to propose the CEJ language and none did.

“Offer and disseminate” means providing general information, including a description of the coverage and price, as well as processing the application,and collecting premiums., and performing other non-licensable activities permitted by the state.

(9/28/17) Language suggested by IIABA and proposed by Utah. CEJ said the phrase is an invitation to have deviations across the states and it is not clear why that language is needed. The Working Group members unanimously agreed with the change.

“Primary Certificate Holder”, specific to Section 5-Premium Tax, means an individual person who elects and purchases Travel Insurance under a Group Policy.

“Primary Policyholder”, specific to Section 5-Premium Tax, means an individual person who elects and purchases individual Travel Insurance. (4/30/18) U.S. Fire proposed these definitions for clarity with premium taxes. The Working Group adopted this language unanimously.

“Travel Administrator” means a person who directly or indirectly underwrites, collects charges, collateral or premiums from, or adjusts or settles claims on residents of this state, in connection with Travel Insurance, except that a person shall not be considered a Travel Administrator if that person’s only actions that would otherwise cause it to be considered a Travel Administrator are among the following:

a.a person working for a Travel Administrator to the extent that the person’s activities are subject to the supervision and control of the Travel Administrator;

b.an insurance producer selling insurance or engaged in administrative and claims related activities within the scope of the producer’s license;

c.a Travel Retailer offering and disseminating Travel Insurance and registered under the license of a Limited Lines Travel Insurance Producer in accordance with this Act;

d.an individual adjusting or settling claims in the normal course of that individual’s practice or employment as an attorney at law and who does not collect charges or premiums in connection with insurance coverage; or

e.a business entity that is affiliated with a licensed insurer while acting as a Travel Administrator for the direct and assumed insurance business of an affiliated insurer.

“Travel Assistance Services” means non-insurance services that may be distributed by Limited Lines Travel Insurance Producers or other entities, and for which there is no indemnification for the Travel Protection Plan customerfor which the consumer is not indemnified based on a fortuitous event, nor any and where providing the service does not result in transfer or shifting of risk that would constitute the business of insurance. Travel Assistance Services include, but are not limited to: security advisories; destination information; vaccination and immunization information services; travel reservation services; entertainment; activity and event planning; translation assistance; emergency messaging; international legal and medical referrals; medical case monitoring; coordination of transportation arrangements; emergency cash transfer assistance; medical prescription replacement assistance; passport and travel document replacement assistance; lost luggage assistance; concierge services; and any other service that is furnished in connection with planned travel. that is not related to the adjudication of a Travel Insurance claim, unless otherwise approved by the Commissioner in a Travel Insurance filing. Travel Assistance Services are not insurance and not related to insurance.

(12/12/2017) CEJ presented its opinion that “travel assistance services” should simply be anything that is not defined as “travel insurance”. CEJ said if fundamental utilization of the insurance relies on any of the services it should be part of the insurance benefit.