Pennsylvania Act 2024-28 — TRAVEL INSURANCE MODERNIZATION ACT - OMNIBUS AMENDMENTS

Act text

Session of 2024

No. 2024-28

SB 943

AN ACT

Amending the act of May 31, 2018 (P.L.125, No.26), entitled "An act providing for the licensure of limited lines travel insurance producers, for requirements for sale of travel insurance, for authority of limited lines travel insurance producers, for registration and training of travel retailers and for renewal of license," providing for scope and purpose; further providing for definitions, for licensure of limited lines travel insurance producers, for requirements for sale of travel insurance and for policy; and providing for travel protection plans, for sales practices, for travel administrators, for filing classification and for regulations.

The General Assembly of the Commonwealth of Pennsylvania hereby enacts as follows:

Section 1. The act of May 31, 2018 (P.L.125, No.26), known as the Travel Insurance Modernization Act, is amended by adding a section to read:

Section 1.1. Scope and purpose.

(a) Purpose.--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 Commonwealth.

(b) Applicability.--The requirements of this act shall apply to travel insurance that covers a resident of this Commonwealth and is sold, solicited, negotiated or offered in this Commonwealth, and policies and certificates are delivered or issued for delivery in this Commonwealth. This act shall not apply to cancellation fee waivers or travel assistance services, except as expressly provided in this act.

(c) Continuation.--All other applicable provisions of this Commonwealth'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.

Section 2. The definitions of "customer," "limited lines travel insurance producer" and "travel insurance" in section 2 of the act are amended and the section is amended by adding definitions to read:

Section 2. Definitions.

The following words and phrases when used in this act shall have the meanings given to them in this section unless the context clearly indicates otherwise:

"Aggregator site." A publicly accessible 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.

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"Blanket travel insurance." A policy of travel insurance issued to an eligible group providing coverage for 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.

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"Cancellation fee waiver." A contractual agreement between a supplier of travel services and a 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.

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"Customer." A person who purchases travel services , travel protection plans or travel insurance.

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"Eligible group." 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:

(1) An entity engaged in the business of providing travel or travel services, including 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 airlines, cruise lines, railroads, steamship companies and public bus carriers, wherein with regard to a particular trip or type of travel or travelers, all members or customers of the group must have a common exposure to risk attendant to the travel.

(2) A college, school or other institution of learning, covering students, teachers, employees or volunteers.

(3) An employer covering a group of employees, volunteers, contractors, board of directors, dependents or guests.

(4) A sports team, camp or sponsor of a sports team or camp covering participants, members, campers, employees, officials, supervisors or volunteers.

(5) A religious, charitable, recreational, educational or civic organization or branch of an organization covering a group of members, participants or volunteers.

(6) A 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, including account holders, credit card holders, debtors, guarantors or purchasers.

(7) An 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 the association covering members.

(8) A 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 of one or more associations meeting the requirements of paragraph (7).

(9) An entertainment production company covering a group of participants, volunteers, audience members, contestants or workers.

(10) A volunteer fire department, ambulance, rescue, police, court, first aid, civil defense or other volunteer group.

(11) A preschool, day-care institution for children or adults and senior citizen club.

(12) An 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, 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 section applies.

(13) Any other group where, upon prior request to the commissioner, the commissioner has determined, in the commissioner's sole discretion, 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 interest.

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"Fulfillment materials." Documentation sent to the purchaser of a travel protection plan confirming the purchase and providing the travel protection plan's coverage and assistance details.

"Group travel insurance." Travel insurance issued to an eligible group.

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"Limited lines travel insurance producer." A person licensed to sell, solicit or negotiate a contract of travel insurance[.] as one of the following:

(1) licensed managing general agent or third-party administrator;

(2) licensed insurance producer, including a limited lines producer; or

(3) travel administrator licensed as a limited lines insurance producer.

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"Travel administrator." A person who directly or indirectly underwrites, collects charges, collateral or premiums from, or adjusts or settles claims on residents of this Commonwealth, 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 the person to be considered a travel administrator are among the following:

(1) 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.

(2) An insurance producer selling insurance or engaged in administrative and claims-related activities within the scope of the producer's license.

(3) 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.

(4) 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.

(5) 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." Noninsurance services for which the consumer is not indemnified based on a fortuitous event and where providing the service does not result in transfer or shifting of risk that would constitute the business of insurance. The term includes 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 not related to insurance.

"Travel insurance." Insurance providing coverage for personal risks incident to planned travel. The following apply:

(1) The term includes:

(i) Interruption or cancellation of trip or event.

(ii) Loss of baggage or personal effects.

(iii) Damages to accommodations or rental vehicles.

(iv) Sickness, accident, disability or death occurring during travel.

(v) Emergency evacuation.

(vi) Repatriation of remains.

(vii) Any other contractual obligations to indemnify or pay a specified amount to the traveler upon determinable contingencies related to travel as approved by the commissioner.

(2) The term does not include:

(i) A service contract as defined in section 358(b) of the act of May 17, 1921 (P.L.682, No.284), known as The Insurance Company Law of 1921.

(ii) A major medical plan that provides comprehensive medical protection to a traveler with a trip lasting six months or longer, including a person working or residing overseas as an expatriate or deployed military personnel.

(iii) Any other product that requires a specific insurance producer license.

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"Travel protection plans." Plans that provide one or more of the following:

(1) Travel insurance.

(2) Travel assistance services.

(3) Cancellation fee waivers.

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Section 3. Section 3(a) of the act is amended to read:

Section 3. Licensure of limited lines travel insurance producers.

(a) Requirement.--[A limited lines travel insurance producer is required to hold a limited lines travel insurance license to sell, solicit or negotiate coverage under a policy of travel insurance.] The commissioner may issue a limited lines travel insurance producer license to an individual or business entity that has filed with the commissioner an application for a limited lines travel insurance producer license in a form and manner prescribed by the commissioner. The limited lines travel insurance producer shall be licensed to sell, solicit or negotiate travel insurance through a licensed insurer. A person may not act as a limited lines travel insurance producer or travel insurance retailer unless properly licensed or registered.

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Section 4. Section 4(a)(1), (b), (e) introductory paragraph and (2) and (f) of the act are amended and the section is amended by adding a subsection to read:

Section 4. Requirements for sale of travel insurance.

(a) Authority and licensure.--A travel retailer and each employee and authorized representative of the travel retailer may offer and disseminate travel insurance to customers and shall not be subject to licensure as an insurance producer under Article VI-A of the Insurance Department Act if:

(1) The limited lines travel insurance producer obtains a limited lines license or is otherwise licensed as an insurance producer .

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(b) Register of travel retailers.--

(1) At the time of licensure, the limited lines travel insurance producer shall establish and maintain a register of each travel retailer in this Commonwealth [where travel insurance is offered] that offers travel insurance on the limited lines travel insurance producer's behalf.

(2) The register shall be maintained and updated [annually] by the limited lines travel insurance producer and shall include:

(i) The name, address and contact information of the travel retailer.

(ii) The name , address and contact information of the officer or person who directs or controls the travel retailer's operations.

(iii) The travel retailer's Federal Tax Identification Number.

(3) Information in the register regarding each travel retailer under paragraphs (1) and (2) shall be maintained for a period of at least three years following the date that the information was entered into the register.

(4) The limited lines travel insurance producer shall submit the register to the department upon request.

(5) The limited lines travel insurance producer shall certify that the travel retailer registered complies with 18 U.S.C. § 1033 (relating to crimes by or affecting persons engaged in the business of insurance whose activities affect interstate commerce).

(6) The grounds for suspension, revocation and the penalties under section 7 shall be applicable to the limited lines travel insurance producers and travel retailers.

(7) The limited lines travel insurance producer shall designate one employee as a licensed individual producer as the designated licensee responsible for the compliance with the travel insurance laws and regulations applicable to the limited lines travel insurance producer and the producer's registrants.

(8) The designated licensee, president, secretary, treasurer and any other officer or person who directs or controls the limited lines travel insurance producer's insurance operations shall comply with the fingerprinting requirements applicable to insurance producers in the resident state of the limited lines travel insurance producer.

(9) The limited lines travel insurance producer shall pay all applicable licensing fees as specified in applicable State law.

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(e) Written materials.--A travel retailer offering or disseminating travel insurance shall provide to every prospective customer a brochure or other written material that has been approved by the travel insurer. The materials shall include information that :

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[(2) Discloses that travel insurance may provide a duplication of coverage already provided under insurance policies that the producer already maintains.]

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(f) Limitations.--A travel retailer's employee or authorized representative who is not licensed as [a designated licensee] an insurance producer may not:

(1) Evaluate or interpret the technical terms, benefits and conditions of the offered travel insurance coverage.

(2) Evaluate or provide advice concerning a prospective customer's existing insurance coverage.

(3) Advertise, represent or otherwise hold himself or herself out as a licensed insurer, [designated licensee] licensed producer or insurance expert.

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(i) Authorization for sales.--A person licensed in a major line of authority as an insurance producer is authorized to sell, solicit and negotiate travel insurance. A property and casualty insurance producer is not required to become appointed by an insurer in order to sell, solicit or negotiate travel insurance.

Section 5. Section 5 of the act is amended to read:

Section 5. Policy.

(a) Offering.--Travel insurance may be offered under an individual [policy or under a group] , group or blanket policy.

(b) Eligibility and underwriting standards.--Eligibility and underwriting standards for [customers electing to enroll in coverage shall be established for each travel insurance program.] travel insurance may be developed and provided based on travel protection plans designed for individual or identified marketing or distribution channels, provided those standards also meet the Commonwealth's underwriting standards for inland marine.

Section 6. The act is amended by adding sections to read:

Section 8.1. Travel protection plans.

Travel protection plans may be offered for one price for the combined features that the travel protection plan offers in this Commonwealth if:

(1) The travel protection plan clearly discloses to the consumer, at or prior to the time of purchase, that the plan includes travel insurance, travel assistance services and cancellation fee waivers, as applicable, and provides information and an opportunity, at or prior to the time of purchase, for the consumer to obtain additional information regarding the features and separately itemized pricing of each.

(2) The fulfillment materials:

(i) Describe and delineate the travel insurance, travel assistance services and cancellation fee waivers in the travel protection plan.

(ii) Include the travel insurance disclosures and the contact information for persons providing travel assistance services and cancellation fee waivers, as applicable.

(3) Partial payment made for travel protection plans, including one or more services offered for one price, will be applied in full to the travel insurance premium portion of the price first.

Section 8.2. Sales practices.

(a) General rule.--A person offering travel insurance to residents of this Commonwealth shall be subject to the act of July 22, 1974 (P.L.589, No.205), known as the Unfair Insurance Practices Act, except as otherwise provided in this section. In the event of a conflict between this act and other provisions of the Unfair Insurance Practices Act regarding the sale and marketing of travel insurance and travel protection plans, the provisions of this act shall control.

(b) Illusory travel insurance.--Offering or selling a travel insurance policy that could never result in payment of any claims for any insured under the policy is deemed and defined to be an unfair trade practice under the Unfair Insurance Practices Act.

(c) Marketing.--

(1) All documents provided to a consumer prior to the purchase of travel insurance, including sales materials, advertising materials and marketing materials, shall be consistent with the travel insurance policy product, including forms, endorsements, policies, rate filings and certificates of insurance.

(2) For travel insurance policies or certificates that contain preexisting condition exclusions, information and an opportunity to learn more about the preexisting condition exclusions shall be provided any time prior to the time of purchase and in the coverage's fulfillment materials.

(3) The fulfillment materials and the information described in section 4(a)(2) shall be provided to a policyholder or certificate holder as soon as practicable, following the purchase of a travel protection plan. Unless the insured has either started a covered trip or filed a claim under the travel insurance coverage, a policyholder or certificate holder may cancel a policy or certificate for a full refund of the travel protection plan price from the date of purchase of a travel protection plan until at least:

(i) fifteen days following the date of delivery of the travel protection plan's fulfillment materials by postal mail; or

(ii) ten days following the date of delivery of the travel protection plan's fulfillment materials by means other than postal mail.

(4) The company shall disclose in the policy documentation and fulfillment materials whether the travel insurance is primary or secondary to other applicable coverage.

(5) Where travel insurance is marketed directly to a consumer through an insurer's publicly accessible Internet website or by others through an aggregator site, it shall not be an unfair trade practice or other violation of law where an accurate summary or short description of coverage is provided on the website, as long as the consumer has access to the full provisions of the policy through electronic means.

(d) Opt out prohibited.--No person offering, soliciting or negotiating travel insurance or travel protection plans on an individual or group basis may do so by using a negative option or opt out, which would require 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.

(e) Unfair trade practice.--It shall be deemed and defined to be an unfair trade practice to market blanket travel insurance coverage as free.

(f) Coverage options.--If a consumer's destination jurisdiction requires insurance coverage, it shall not be 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 limited lines travel insurance producer supplying the trip or travel package; or

(2) agreeing to obtain and provide proof of coverage that meets the destination jurisdiction's requirements prior to departure.

(g) Definition.--As used in this section, the term "delivery" means handing fulfillment materials to the policyholder or certificate holder or sending fulfillment materials by postal mail or electronic means to the policyholder or certificate holder.

Section 8.3. Travel administrators.

(a) Prohibitions.--Notwithstanding any other provisions of this act, a person may not act or represent oneself as a travel administrator for travel insurance in this Commonwealth unless that person:

(1) is a licensed property and casualty insurance producer in this Commonwealth for activities permitted under that producer license;

(2) holds a valid managing general agent license in this Commonwealth; or

(3) holds a valid third-party administrator license in this Commonwealth.

(b) Responsibilities of insurer.--An insurer is responsible for the acts of a travel administrator administering travel insurance underwritten by the insurer and is responsible for ensuring that the travel administrator maintains all books and records relevant to the insurer to be made available by the travel administrator to the commissioner upon request.

Section 8.4. Filing classification.

Notwithstanding any other provision of this act, travel insurance shall be classified and filed for purposes of rates and forms under an inland marine line of insurance. A policy providing coverage for only sickness, accident, disability or death occurring during travel, either exclusively or in conjunction with related coverages of emergency evacuation or repatriation of remains, shall be considered and filed as accident and health insurance and will not be subject to the inland marine underwriting standards.

Section 8.5. Regulations.

The commissioner may promulgate regulations to implement the provisions of this act.

Section 7. This act shall take effect in 90 days.

APPROVED--The 17th day of June, A.D. 2024.

JOSH SHAPIRO