Bill Text: TX HB2587 | 2019-2020 | 86th Legislature | Enrolled
Bill Title: Relating to the business of travel insurance.
Spectrum: Bipartisan Bill
Status: (Passed) 2019-06-14 - Effective on 9/1/19 [HB2587 Detail]
Download: Texas-2019-HB2587-Enrolled.html
H.B. No. 2587 |
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relating to the business of travel insurance. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Title 12, Insurance Code, is amended by adding | ||
Chapter 3504 to read as follows: | ||
CHAPTER 3504. TRAVEL INSURANCE | ||
Sec. 3504.0001. DEFINITIONS. In this chapter: | ||
(1) "Aggregator site" means an Internet website that | ||
provides access to information regarding insurance products from | ||
more than one insurer, including product and insurer information, | ||
for use in comparison shopping. | ||
(2) "Blanket travel insurance" means a policy of | ||
travel insurance issued to an eligible group that provides coverage | ||
for specific classes of persons with coverage provided to each | ||
member of the eligible group defined in the policy without a | ||
separate charge to individual members of the eligible group. | ||
(3) "Cancellation fee waiver" means a contractual | ||
agreement between a supplier of travel services and the supplier's | ||
customer to waive some or all of the nonrefundable cancellation fee | ||
provisions of the supplier's underlying travel contract with or | ||
without regard to the reason for the cancellation or form of | ||
reimbursement. A cancellation fee waiver is not insurance. | ||
(4) "Eligible group" means two or more persons who are | ||
engaged in a common enterprise or have an economic, educational, or | ||
social affinity or relationship, including any of the following: | ||
(A) an entity engaged in the business of | ||
providing travel or travel services, including a tour operator, a | ||
lodging provider, a vacation property owner, a hotel or resort, a | ||
travel club, a travel agency, a property manager, a cultural | ||
exchange program, and a common carrier or the operator, owner, or | ||
lessor of a means of transportation of passengers, including an | ||
airline, a cruise line, a railroad, a steamship company, and a | ||
public bus carrier, wherein with regard to any particular travel or | ||
type of travel or travelers, all members or customers of the group | ||
must have a common exposure to risk attendant to the travel; | ||
(B) a college, school, or other institution of | ||
learning covering students, teachers, employees, or volunteers; | ||
(C) an employer covering a board of directors or | ||
a group of employees, volunteers, contractors, dependents, or | ||
guests; | ||
(D) a sports team or camp or sponsor of a team or | ||
camp covering participants, members, campers, employees, | ||
officials, supervisors, or volunteers; | ||
(E) a religious, charitable, recreational, | ||
educational, or civic organization or branch of the organization | ||
covering members, participants, or volunteers; | ||
(F) a financial institution or financial | ||
institution vendor or a parent holding company, trustee, or agent | ||
or designee of a financial institution or financial institution | ||
vendor covering persons, including account holders, credit card | ||
holders, debtors, guarantors, or purchasers; | ||
(G) an incorporated or unincorporated | ||
association, including a labor union that has a common interest, | ||
constitution, and bylaws, organized and maintained in good faith | ||
for a purpose other than obtaining insurance for the association's | ||
members or participants; | ||
(H) a trust, or the trustees of a fund, | ||
established, created, or maintained for the benefit of and covering | ||
members, employees, or customers of one or more associations | ||
meeting the requirements of Paragraph (G), subject to the | ||
commissioner's approval and the state premium tax provisions of | ||
Section 3504.0004; | ||
(I) an entertainment production company covering | ||
a group of participants, volunteers, audience members, | ||
contestants, or workers; | ||
(J) a volunteer fire department or an ambulance, | ||
rescue, police, court, first aid, or civil defense volunteer group | ||
or other similar volunteer group; | ||
(K) a preschool, a day-care facility for children | ||
or adults, or a senior citizen club; | ||
(L) an automobile or truck rental or leasing | ||
company covering a group of individuals who may become renters, | ||
lessees, or passengers defined by the individual's status on the | ||
rented or leased vehicles, in which circumstance 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; or | ||
(M) any other group with respect to which the | ||
commissioner has determined: | ||
(i) the members are engaged in a common | ||
enterprise or have an economic, educational, or social affinity or | ||
relationship; and | ||
(ii) issuance of the policy is not contrary | ||
to the public interest. | ||
(5) "Fulfillment materials" means documentation sent | ||
to the purchaser of a travel protection plan that confirms the | ||
purchase and provides the travel protection plan's coverage and | ||
assistance details. | ||
(6) "Group travel insurance" means travel insurance | ||
issued to an eligible group. | ||
(7) "Planned trip" or "planned travel" means any | ||
journey or travel arranged through the services of a travel agency. | ||
(8) "Primary certificate holder," specific to Section | ||
3504.0004, means an individual who elects and purchases travel | ||
insurance under a group policy. | ||
(9) "Primary policyholder," specific to Section | ||
3504.0004, means an individual who elects and purchases individual | ||
travel insurance. | ||
(10) "Travel assistance services" means noninsurance | ||
services that do not indemnify the consumer based on a fortuitous | ||
event or result in the transfer or shifting of risk constituting the | ||
business of insurance. Travel assistance services include 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. Travel | ||
assistance services are not insurance and are not related to | ||
insurance. | ||
(11) "Travel insurance" means insurance coverage for | ||
personal risks incident to planned travel, including: | ||
(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; | ||
(E) emergency evacuation; | ||
(F) repatriation of remains; or | ||
(G) any other contractual obligations to | ||
indemnify or pay a specified amount to the traveler on determinable | ||
contingencies related to travel as approved by the commissioner. | ||
Travel insurance does not include a major medical plan that | ||
provides comprehensive medical protection for a traveler on a trip | ||
of longer than six months, such as an individual working or residing | ||
overseas as an expatriate, or any other insurance product that must | ||
be sold by an agent with a specific agent's license. | ||
(12) "Travel protection plan" means a plan that | ||
provides one or more of the following: | ||
(A) travel insurance; | ||
(B) travel assistance services; and | ||
(C) cancellation fee waivers. | ||
Sec. 3504.0002. APPLICABILITY. (a) This chapter applies | ||
to a travel insurance policy or certificate that: | ||
(1) provides coverage to a resident of this state or is | ||
sold, solicited, negotiated, or offered in this state; and | ||
(2) is delivered or issued for delivery in this state. | ||
(b) This chapter does not apply to a cancellation fee waiver | ||
or travel assistance service except as expressly provided in this | ||
chapter. | ||
Sec. 3504.0003. LINE OF INSURANCE. (a) Except as provided | ||
by Subsection (b) and notwithstanding any other provision of this | ||
code, travel insurance is classified and filed for purposes of | ||
rates and forms under an inland marine line of insurance. | ||
(b) Travel insurance that provides coverage for sickness, | ||
accident, disability, or death occurring during travel, | ||
exclusively or in conjunction with related coverage for emergency | ||
evacuation, repatriation of remains, or incidental limited | ||
property and casualty benefits, including baggage or trip | ||
cancellation, may be filed by an authorized insurer under an | ||
accident and health line of insurance or an inland marine line of | ||
insurance. | ||
(c) Eligibility and underwriting standards for travel | ||
insurance may be developed and provided based on travel protection | ||
plans designed for individual or identified marketing or | ||
distribution channels if the standards meet underwriting standards | ||
for an inland marine line of insurance. | ||
Sec. 3504.0004. PREMIUM TAX. (a) A travel insurer shall | ||
pay premium tax, as provided by Section 221.002, on travel | ||
insurance premiums paid by any of the following: | ||
(1) an individual primary policyholder who is a | ||
resident of this state; | ||
(2) a primary certificate holder who is a resident of | ||
this state and elects and purchases coverage under a group travel | ||
insurance policy; or | ||
(3) a blanket travel insurance policyholder who buys a | ||
blanket travel insurance policy for members of an eligible group | ||
if: | ||
(A) the policyholder is a resident of this state; | ||
or | ||
(B) the policyholder's principal place of | ||
business is located in this state. | ||
(b) A travel insurer shall: | ||
(1) document the state of residence or principal place | ||
of business of the policyholder or certificate holder described by | ||
Subsection (a); and | ||
(2) report as premium: | ||
(A) only the amount allocable to travel insurance | ||
and not amounts received for travel assistance services or | ||
cancellation fee waivers; and | ||
(B) only the amount allocable to residents of | ||
this state. | ||
(c) Amounts received for travel assistance services and | ||
cancellation fee waivers, whether the travel assistance services | ||
and cancellation waivers are offered separately or for a combined | ||
price authorized by Section 3504.0005, are not subject to taxation | ||
under Section 221.002(b). | ||
Sec. 3504.0005. TRAVEL PROTECTION PLANS. A travel | ||
protection plan composed of multiple features may be offered for a | ||
combined price if: | ||
(1) at the time or before the consumer buys the travel | ||
protection plan it is clearly disclosed to the consumer that the | ||
plan includes travel insurance, travel assistance services, and | ||
cancellation fee waivers, as applicable, and provides information | ||
and an opportunity for the consumer to obtain additional | ||
information regarding the features and the pricing of each feature; | ||
and | ||
(2) the fulfillment materials: | ||
(A) describe the travel insurance, travel | ||
assistance services, and cancellation fee waivers in the travel | ||
protection plan; and | ||
(B) include the travel insurance disclosures and | ||
the contact information for persons providing travel assistance | ||
services and cancellation fee waivers, as applicable. | ||
Sec. 3504.0006. SALES PRACTICES; PROHIBITED PRACTICES. (a) | ||
Offering or selling a travel insurance policy that could never | ||
result in payment of a claim for an insured under the policy is an | ||
unfair trade practice under Subtitle C, Title 5. | ||
(b) All documents provided to a consumer before the purchase | ||
of travel insurance, including sales materials, advertising | ||
materials, and marketing materials, must be consistent with the | ||
travel insurance policy, including forms, endorsements, policies, | ||
rate filings, and certificates of insurance. | ||
(c) Before the consumer buys travel insurance and | ||
subsequently in the fulfillment materials, the consumer must be | ||
provided information about any preexisting condition exclusion | ||
that is included in the travel insurance policy or certificate. The | ||
consumer must have the opportunity to learn more about the | ||
exclusion. | ||
(d) The fulfillment materials and the information described | ||
in Section 4055.154(a) must be provided to a policyholder or | ||
certificate holder as soon as practicable after the purchase of a | ||
travel protection plan. Unless the policyholder or certificate | ||
holder has started a covered trip or filed a claim under the travel | ||
insurance coverage, the policyholder or certificate holder may | ||
cancel a policy or certificate for a full refund of the travel | ||
protection plan price. The policyholder or certificate holder must | ||
exercise the right to cancel a travel protection plan before: | ||
(1) the 15th day after the date of delivery of the | ||
travel protection plan's fulfillment materials by United States | ||
mail or a later date specified by the plan; or | ||
(2) the 10th day after the date of delivery of the | ||
travel protection plan's fulfillment materials by means other than | ||
United States mail or a later date specified by the plan. | ||
(e) For the purposes of this section, delivery means handing | ||
fulfillment materials to the policyholder or certificate holder or | ||
sending fulfillment materials by United States mail or electronic | ||
means to the policyholder or certificate holder. | ||
(f) The company shall disclose in the policy documentation | ||
and fulfillment materials if the travel insurance is primary or | ||
secondary to other applicable coverage. | ||
(g) If travel insurance is marketed directly to a consumer | ||
through an insurer's Internet website or by others through an | ||
aggregator site, it is not an unfair trade practice or other | ||
violation of law if: | ||
(1) an accurate summary or short description of | ||
coverage is provided on the Internet website; and | ||
(2) the consumer has access to the full provisions of | ||
the policy through electronic means. | ||
(h) A person offering, soliciting, or negotiating travel | ||
insurance or travel protection plans on an individual or group | ||
basis may not do so by using a negative option or opt out that | ||
requires a consumer to take an affirmative action to deselect | ||
coverage, such as unchecking a box on an electronic form, when the | ||
consumer purchases a trip. | ||
(i) It is an unfair trade practice to market blanket travel | ||
insurance coverage as free. | ||
(j) If a consumer's destination jurisdiction requires | ||
insurance coverage, it is not an unfair trade practice to require | ||
that a consumer choose between the following options as a condition | ||
of purchasing a trip or travel package: | ||
(1) purchasing the coverage required by the | ||
destination jurisdiction through the travel retailer or | ||
supervising entity supplying the trip or travel package; or | ||
(2) agreeing to obtain and provide proof of coverage | ||
that meets the destination jurisdiction's requirements before | ||
departure. | ||
Sec. 3504.0007. RULEMAKING. (a) The commissioner may | ||
adopt rules necessary to implement this chapter. Section | ||
2001.0045, Government Code, does not apply to rules adopted under | ||
this section. | ||
(b) The comptroller, in consultation with the commissioner, | ||
may adopt rules to implement this chapter. | ||
SECTION 2. Section 4055.151, Insurance Code, is amended by | ||
amending Subdivision (1) and adding Subdivisions (1-a) and (1-c) to | ||
read as follows: | ||
(1) "Offer and disseminate" means to: | ||
(A) provide general information, including the | ||
price and a description of the coverage; and | ||
(B) process the application and collect | ||
premiums. | ||
(1-a) "Planned trip" means any journey or travel | ||
arranged through the services of a travel agency. | ||
(1-c) "Travel administrator" means a person who | ||
directly or indirectly underwrites, collects a charge, collateral, | ||
or premium from, or adjusts or settles a claim of, a resident of | ||
this state in connection with travel insurance. A person is not a | ||
travel administrator if the person's only actions that would | ||
otherwise cause the person to be considered a travel administrator | ||
include: | ||
(A) the person working for a travel administrator | ||
to the extent the person's activities are subject to the | ||
supervision and control of the travel administrator; | ||
(B) an insurance agent selling insurance or | ||
engaged in administrative and claims-related activities within the | ||
scope of the agent's license; | ||
(C) a travel retailer, registered under the | ||
license of a supervising entity in accordance with this subchapter, | ||
offering and disseminating travel insurance; | ||
(D) an individual adjusting or settling claims in | ||
the normal course of the individual's practice or employment as an | ||
attorney 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 acting as a travel administrator for the direct | ||
and assumed insurance business of an affiliated insurer. | ||
SECTION 3. Sections 4055.1515, 4055.153, and 4055.154, | ||
Insurance Code, are amended to read as follows: | ||
Sec. 4055.1515. TRAVEL INSURANCE SUPERVISING ENTITY AND | ||
TRAVEL ADMINISTRATOR. (a) An insurer authorized to engage in the | ||
business of travel insurance in this state may designate a travel | ||
insurance supervising entity for purposes of this subchapter. The | ||
supervising entity must be: | ||
(1) a licensed managing general agent; | ||
(2) a licensed third-party administrator; [ |
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(3) a licensed insurance agent, including a specialty | ||
license holder and a person described by Section 4055.002(a); or | ||
(4) a travel administrator. | ||
(b) Notwithstanding any other provisions of this code, a | ||
person may not act or represent the person as a travel administrator | ||
for travel insurance unless the person is: | ||
(1) a licensed property and casualty insurance agent; | ||
(2) a licensed managing general agent; or | ||
(3) a third-party administrator engaging in the | ||
business of insurance in this state under a certificate of | ||
authority. | ||
(c) A travel administrator and a travel administrator's | ||
employees are exempt from the licensing requirements under Chapter | ||
4101 with respect to travel insurance. | ||
(d) An insurer is responsible for the acts of a travel | ||
administrator administering travel insurance underwritten by the | ||
insurer. The insurer must ensure that the travel administrator | ||
maintains all books and records relevant to the insurer and makes | ||
the books and records available to the department on request of the | ||
commissioner. | ||
Sec. 4055.153. AUTHORITY OF TRAVEL RETAILER. [ |
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travel retailer may offer and disseminate travel insurance as a | ||
service to the retailer's customers on behalf of and under the | ||
license and direction of a supervising entity only: | ||
(1) in connection with the sale or arrangement of | ||
transportation, accommodations, or events for travelers; and | ||
(2) with respect to travel insurance [ |
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Sec. 4055.154. TRAVEL INSURANCE GENERALLY. (a) A travel | ||
retailer, or the supervising entity, shall provide to a traveler | ||
seeking to purchase travel insurance: | ||
(1) a description of the material terms or the actual | ||
terms of the insurance coverage; | ||
(2) a description of the claims filing process; | ||
(3) a description of the review and cancellation | ||
process for the travel insurance policy; and | ||
(4) the name and contact information for the insurer | ||
and the supervising entity. | ||
(b) Travel insurance coverage may be provided under an | ||
individual [ |
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travel insurance [ |
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SECTION 4. Section 4055.155, Insurance Code, is amended by | ||
amending Subsection (e) and adding Subsections (g-1) and (j) to | ||
read as follows: | ||
(e) The supervising entity must certify in a form prescribed | ||
by the commissioner by rule that each registered travel retailer is | ||
in compliance with 18 U.S.C. Section 1033. The grounds for | ||
suspension or revocation and the penalties that apply to a resident | ||
insurance agent apply to a supervising entity and travel retailer. | ||
(g-1) The supervising entity shall pay all applicable | ||
licensing fees required by state law with respect to travel | ||
insurance. | ||
(j) Any person licensed in a major line of authority, as | ||
determined by the commissioner, as an insurance agent may sell, | ||
solicit, and negotiate travel insurance. A property and casualty | ||
insurance agent is not required to be appointed by an insurer to | ||
sell, solicit, or negotiate travel insurance. | ||
SECTION 5. Subchapter D, Chapter 4055, Insurance Code, is | ||
amended by adding Section 4055.158 to read as follows: | ||
Sec. 4055.158. RULEMAKING. The commissioner shall adopt | ||
rules necessary to implement this subchapter. Section 2001.0045, | ||
Government Code, does not apply to rules adopted under this | ||
section. | ||
SECTION 6. Section 221.002(b), Insurance Code, is amended | ||
to read as follows: | ||
(b) Except as provided by Subsection (c), in determining an | ||
insurer's taxable premium receipts, the insurer shall include the | ||
total gross amounts of premiums, membership fees, assessments, | ||
dues, revenues, and any other considerations for insurance written | ||
by the insurer in a calendar year from any kind of insurance written | ||
by the insurer on each kind of property or risk located in this | ||
state, including: | ||
(1) fire insurance; | ||
(2) ocean marine insurance; | ||
(3) inland marine insurance; | ||
(4) accident insurance; | ||
(5) credit insurance; | ||
(6) livestock insurance; | ||
(7) fidelity insurance; | ||
(8) guaranty insurance; | ||
(9) surety insurance; | ||
(10) casualty insurance; | ||
(11) workers' compensation insurance; | ||
(12) employers' liability insurance; | ||
(13) crop insurance written by a farm mutual insurance | ||
company; [ |
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(14) home warranty insurance; and | ||
(15) travel insurance. | ||
SECTION 7. This Act takes effect September 1, 2019. | ||
______________________________ | ______________________________ | |
President of the Senate | Speaker of the House | |
I certify that H.B. No. 2587 was passed by the House on April | ||
18, 2019, by the following vote: Yeas 141, Nays 6, 2 present, not | ||
voting; and that the House concurred in Senate amendments to H.B. | ||
No. 2587 on May 24, 2019, by the following vote: Yeas 111, Nays 29, | ||
2 present, not voting. | ||
______________________________ | ||
Chief Clerk of the House | ||
I certify that H.B. No. 2587 was passed by the Senate, with | ||
amendments, on May 21, 2019, by the following vote: Yeas 30, Nays | ||
1. | ||
______________________________ | ||
Secretary of the Senate | ||
APPROVED: __________________ | ||
Date | ||
__________________ | ||
Governor |