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  S.B. No. 1672
 
 
 
 
AN ACT
  relating to the business of travel insurance; authorizing
  penalties.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  The heading to Subchapter D, Chapter 4055,
  Insurance Code, is amended to read as follows:
  SUBCHAPTER D.  TRAVEL INSURANCE [LICENSE]
         SECTION 2.  Section 4055.151, Insurance Code, is amended by
  adding Subdivisions (1-b) and (2-b) to read as follows:
               (1-b)  "Supervising entity" means a travel insurance
  supervising entity designated by an insurer under Section
  4055.1515.
               (2-b)  "Travel retailer" means a business entity that
  makes, arranges, or offers travel services.
         SECTION 3.  Subchapter D, Chapter 4055, Insurance Code, is
  amended by adding Section 4055.1515 to read as follows:
         Sec. 4055.1515.  TRAVEL INSURANCE SUPERVISING ENTITY.  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; or
               (3)  a licensed insurance agent, including a specialty
  license holder and a person described by Section 4055.002(a).
         SECTION 4.  Sections 4055.152 and 4055.153, Insurance Code,
  are amended to read as follows:
         Sec. 4055.152.  SPECIALTY [ISSUANCE OF] LICENSE; LICENSE NOT
  REQUIRED FOR TRAVEL RETAILER.  (a)  The commissioner may issue to
  an applicant under this chapter a specialty license that authorizes
  the license holder to sell, solicit, or negotiate travel insurance
  through a licensed insurer.
         (b)  Notwithstanding any other provision of this chapter or
  this code, [the commissioner may issue a specialty license to] a
  travel retailer that operates on behalf of and under the license and
  direction of a supervising entity does not require a license issued
  under this title, subject to Section 4055.153 [agency, the
  franchisee of a travel agency, or a public carrier that complies
  with this subchapter.   The specialty license may be issued only for
  the limited purposes specified by this subchapter].
         Sec. 4055.153.  AUTHORITY OF TRAVEL RETAILER [AGENCY OR
  FRANCHISEE]. (a)  A 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 
  [agency or franchisee licensed under this chapter may act as an
  agent for an authorized insurer] only:
               (1)  in connection with the sale or arrangement of
  transportation, [or] accommodations, or events for travelers; and
               (2)  with respect to travel insurance that includes:
                     (A)  accident and health insurance that provides
  coverage to a traveler for accidental death or dismemberment and
  for medical expenses resulting from an accident or sickness 
  involving the traveler that occurs during the planned trip;
                     (B)  insurance that provides coverage to a
  traveler for expenses incurred as a result of trip cancellation or
  interruption of a planned trip or event;
                     (C)  personal effects insurance that provides
  coverage to a traveler for loss of or damage to personal effects
  during the planned trip or event;
                     (D)  insurance that provides coverage for damage
  to accommodations or rental vehicles [life insurance not exceeding
  $150,000 on any one life covering risks of travel during a planned
  trip]; or
                     (E)  any other coverage the commissioner approves
  as meaningful and appropriate in connection with the transportation
  or accommodations arranged through a travel agency.
         (b)  Travel insurance does not include major medical expense
  coverage for a traveler on a planned trip for six months or more,
  including:
               (1)  an individual working abroad;
               (2)  an expatriate; and
               (3)  a military service member on deployment.
         SECTION 5.  Subchapter D, Chapter 4055, Insurance Code, is
  amended by adding Sections 4055.154, 4055.155, 4055.156, and
  4055.157 to read as follows:
         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 coverage;
               (2)  a description of the claims filing process;
               (3)  a description of the review and cancellation
  process for the 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 policy or a group or master policy.
         Sec. 4055.155.  DUTIES OF INSURERS AND SUPERVISING ENTITIES.
  (a)  An insurer must notify the department in the manner prescribed
  by the commissioner by rule of the designation of a supervising
  entity described by Subsection (b).
         (b)  A supervising entity designated by an insurer that
  provides travel insurance may authorize a travel retailer to offer
  and disseminate a travel insurance policy on behalf of the
  supervising entity by establishing a retailer registry.
         (c)  The registry established under Subsection (b) must be
  maintained and updated on an ongoing basis in a form prescribed by
  the commissioner by rule. The registry must include the name,
  address, and contact information, and federal employer
  identification number, if any, of each registered travel retailer
  and an individual contact person at the retailer.
         (d)  The registry must be submitted to the department on the
  request of the commissioner.
         (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.
         (f)  The supervising entity shall designate an individual
  who is an officer of the entity and a licensed agent as the
  compliance officer responsible for compliance with insurance laws,
  rules, and regulations related to travel insurance.
         (g)  The compliance officer and the officers of the
  supervising entity that direct or control the travel insurance
  business of the supervising entity must submit fingerprints as
  required by the commissioner by rule.
         (h)  The supervising entity shall provide travel insurance
  instruction and training to each employee of a registered travel
  retailer whose duties include offering and disseminating travel
  insurance.  The instruction and training material are subject to
  review by the commissioner and must include instruction relating to
  the insurance offered, ethical sales practices, and required
  disclosures to travelers.
         (i)  The supervising entity is responsible for the acts of a
  travel retailer and shall use reasonable means to ensure each
  registered retailer's compliance with this subchapter.
         Sec. 4055.156.  DUTIES OF TRAVEL RETAILERS. (a)  A travel
  retailer offering and disseminating travel insurance under this
  subchapter shall register with an insurer in a registry established
  under Section 4055.155.
         (b)  The travel retailer shall make available to travelers
  brochures or other written materials that:
               (1)  provide the name, address, and contact information
  of the authorized insurer and the supervising entity;
               (2)  explain that the purchase of travel insurance is
  not required for the purchase from the travel retailer of any other
  product or service; and
               (3)  disclose that the travel retailer is authorized to
  provide general information about travel insurance, including a
  description of coverage and the price for coverage, but is not
  qualified or authorized to provide answers to questions about
  specific policy terms or to evaluate the adequacy of the traveler's
  existing insurance coverage.
         (c)  A travel retailer may not:
               (1)  evaluate or interpret technical words or phrases
  used in a travel insurance policy or benefits under or terms of the
  policy;
               (2)  evaluate or provide advice related to a traveler's
  existing insurance coverage; or
               (3)  advertise or otherwise hold out the travel
  retailer as a license holder or an insurance expert.
         (d)  A travel retailer that complies with this subchapter may
  receive compensation for offering and disseminating travel
  insurance on behalf of a supervising entity on or after the date the
  retailer registers with the insurer under this subchapter.
         Sec. 4055.157.  ENFORCEMENT. A supervising entity and a
  travel retailer registered with the supervising entity are subject
  to Chapters 82 and 83 and Subtitle C, Title 5.
         SECTION 6.  The commissioner of insurance shall promulgate
  forms described by Section 4055.155, Insurance Code, as added by
  this Act, as soon as practicable after the effective date of this
  Act, but not later than January 1, 2014.
         SECTION 7.  This Act applies only to a travel insurance
  policy that is delivered, issued for delivery, or renewed on or
  after January 1, 2014. A policy delivered, issued for delivery, or
  renewed before January 1, 2014, is governed by the law as it existed
  immediately before the effective date of this Act, and that law is
  continued in effect for that purpose.
         SECTION 8.  This Act takes effect September 1, 2013.
 
 
 
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
         I hereby certify that S.B. No. 1672 passed the Senate on
  April 18, 2013, by the following vote:  Yeas 31, Nays 0.
 
 
  ______________________________
  Secretary of the Senate    
 
         I hereby certify that S.B. No. 1672 passed the House on
  May 22, 2013, by the following vote:  Yeas 143, Nays 3, two
  present not voting.
 
 
  ______________________________
  Chief Clerk of the House   
 
 
 
  Approved:
 
  ______________________________ 
              Date
 
 
  ______________________________ 
            Governor