SESSION OF 2023
SUPPLEMENTAL NOTE ON SENATE BILL NO. 85
As Amended by House Committee on Insurance
Brief*
SB 85, as amended, would enact the Kansas Travel
Insurance Act (Act) as part of the Kansas Insurance Act. The
bill would address the licensure and registration of limited
lines travel insurance producers (travel insurance producers)
and travel retailers, establish a premium tax for travel
insurers, regulate the sale and marketing of travel insurance
and travel protection plans, provide for travel administrators,
and establish standards for travel insurance policies.
The bill would also make technical amendments and
remove outdated statutory language.
The bill would be effective on and after January 1, 2024,
and its publication in the Kansas Register.
Purpose and Application (New Section 2)
The purpose of the Act would be to promote the public
welfare by establishing a comprehensive legal framework
within which travel insurance may be sold.
The requirements of the Act would apply to travel
insurance that covers Kansas residents that is sold, solicited,
negotiated, or offered in the state and to policies and
certificates delivered or issued for delivery in the state. The
Act would not apply to cancellation fee waivers or travel
assistance services, except as expressly provided in the Act.
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*Supplemental notes are prepared by the Legislative Research
Department and do not express legislative intent. The supplemental
note and fiscal note for this bill may be accessed on the Internet at
http://www.kslegislature.org
All applicable provisions of the insurance laws of the
state would apply to travel insurance, but specific provisions
of the Act would supersede any general provisions of law that
would be applicable to travel insurance.
Definitions (New Section 3)
The bill would define terms used in the Act, including:
● “Aggregator site” would mean a website that
provides access to information regarding insurance
products for more than one insurer, including
product and insurer information, for use in
comparison shopping;
● “Blanket travel insurance” would mean a policy of
travel insurance issued by any 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;
● “Cancellation fee waiver” would mean a contractual
agreement between a supplier of travel services
and its customer to waive some or all of the non-
refundable cancellation fee provisions of the
supplier’s underlying form of reimbursement.
“Cancellation fee waiver” would not be considered
insurance;
● “Commissioner” would mean the Commissioner of
Insurance;
● “Delivery” would mean handing fulfillment materials
to the policyholder or certificate holder or sending
such fulfillment materials to the policyholder or
certificate holder using United States mail or
electronic means;
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● “Eligible group” would mean two or more persons
who are engaged in a common enterprise, or have
an economic, educational, or social affinity or
relationship. An eligible group would include 13
various groups of similarly situated entities
itemized in the bill;
● “Fulfillment materials” would mean documentation
sent to the purchaser of a travel protection plan
that confirms the purchase and provides details of
the coverage and assistance of the travel
protection plan;
● “Group travel insurance” would mean travel
insurance issued to any eligible group;
● “Limited lines travel insurance producer” would
mean a licensed managing general agent or third
party administrator; a licensed insurance producer,
including a limited lines producer; or a travel
administrator;
● “Offer and disseminate” means providing general
information including a description of the coverage
and price, as well as processing of the application
and collecting premiums;
● “Primary certificate holder” would mean an
individual person who elects and purchases travel
insurance under a group policy;
● “Primary policy holder” would mean an individual
person who elects and purchases individual travel
insurance;
● “Travel administrator” would mean a person who
directly or indirectly underwrites, collects charges,
collateral, or premiums from, or adjusts or settles
claims on, Kansas residents in connection with
travel insurance. Entities not considered to be
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travel administrators would be as identified in the
bill;
● “Travel assistance services” would mean non-
insurance services for which the customer 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 bill would list non-exclusive
examples of travel assistance services;
● “Travel insurance” would mean insurance coverage
for personal risks incidental to planned travel as
outlined in the bill. The bill would also clarify that
travel insurance would not include major medical
plans that provide comprehensive medical
protection for travelers with trips lasting longer than
six months, including those working or residing
overseas as an expatriate, or any other product
that would require a specific insurance producer
license;
● “Travel protection plans” would mean plans that
provide one or more of the following: travel
insurance, travel assistance services, or
cancellation fee waivers; and
● “Travel retailer” would mean a business entity that
makes, arranges, or offers planned travel 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.
Licensure Requirements (New Section 4)
The bill would provide for the licensure of limited lines
travel insurance producers and the registration of travel
retailers that may sell travel insurance under the license of a
travel insurance producer. The Commissioner of Insurance
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(Commissioner) would be authorized to issue a limited lines
travel insurance producer license to an individual or entity
that files with the Commissioner an application for such
licensure in a form and manner prescribed by the
Commissioner. Such travel insurance producer would be
licensed to sell, solicit, or negotiate travel insurance through a
licensed insurer. The bill would require travel insurance
producers or travel insurance retailers to be properly licensed
or registered, respectively.
The bill would establish the conditions under which a
travel retailer would be allowed to offer and disseminate
travel insurance under a travel insurance producer business
entity license. The conditions would include:
● The travel insurance producer or travel retailer
provides certain information to purchasers of travel
insurance;
● The travel insurance producer establishes a
register of each travel retailer that offers travel
insurance on the travel insurance producer’s behalf
and maintains and updates such register, submits
the register to the Department upon reasonable
request, and certifies the travel retailer complies
with federal law pertaining to crimes by or affecting
persons engaged in the business of insurance
whose activities affect interstate commerce;
● The travel insurance producer designates one of its
employees, who is a licensed individual producer,
as a designated responsible producer responsible
for compliance with travel insurance laws and
regulations applicable to the travel insurance
producer and its registrants;
● The designated responsible producer, president,
secretary, treasurer, and any other officer or person
who directs or controls the travel insurance
producer’s insurance operations complies with the
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fingerprinting requirements applicable to insurance
producers in such producer’s resident state;
● The travel insurance producer has paid all
applicable licensing fees required by state law; and
● The travel insurance producer requires each
employee and authorized representative of the
travel insurance retailer whose duties include
offering and disseminating travel insurance to
receive a program of instruction or training, which
is subject to review and approval at the discretion
of the Commissioner. The content of such training
material would be as provided for in the bill.
Any travel retailer offering or disseminating travel
insurance would be required to make available to the
prospective purchaser brochures or written materials
containing specific information outlined in the bill.
The bill would prohibit a travel retailer employee or
authorized representative, who is not a licensed insurance
producer, from performing certain acts.
Despite any other provision in law, a travel retailer
whose insurance-related activities and the activities of the
employees and authorized representatives of such travel
retailer would be limited to offering and disseminating travel
insurance on behalf of and under the direction of a travel
insurance producer that meets the conditions stated in the Act
would be authorized to receive related compensation, upon
registration by the travel insurance producer.
As the insurer’s designee, the travel insurance producer
would be responsible for the acts of the travel retailer and
would be authorized to use reasonable means to ensure the
travel retailer’s compliance with this act.
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Premium Tax (New Section 5)
The travel insurer would be required to pay premium tax
on travel insurance premiums paid by entities identified in the
bill. The travel insurer would also be required to document the
state of residence or principal place of business of each
policy holder or certificate holder and report as premium only
the amount allowable to travel insurance.
Travel Protection Plan Requirements (New Section 6)
The bill would provide that travel protection plans may
combine the features such plans offer in the state for one
price if:
● Clear disclosure is provided to the consumer at or
prior to the time of purchase regarding the content
of such plan, and an opportunity is provided to the
consumer at or prior to the time of purchase
regarding the features and pricing of each plan;
and
● The fulfillment materials meet the requirements
outlined in the bill.
Sales and Marketing Requirements (Section 7)
Each person offering travel insurance to Kansas
residents would be subject to the Unfair Trade Practices Law,
except as otherwise provided in this section of the bill. If a
conflict arose between the Act and the Kansas Insurance Act
regarding the sale and marketing of travel insurance and
travel protections plans, the provisions of the Act would
control. The bill would establish that offering or selling a travel
insurance policy that could never result in payment of any
claims for any insured under the policy would be an unfair
practice under the Unfair Trade Practices Law.
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The bill would require each person who offers travel
insurance policies or travel protection plans to comply with
the following:
● All documents provided to a consumer prior to the
purchase of travel insurance must be consistent
with the travel insurance policy itself;
● For each travel insurance policy or certificate
containing pre-existing condition exclusions,
information and an opportunity to learn more about
such exclusions must be provided to the consumer
prior to the time of purchase and in the coverage’s
fulfillment materials;
● Fulfillment information and the information required
to be provided to purchasers of travel insurance by
a travel insurance producer or travel retailer in
Section 4(b)(1) of the bill must be provided to a
policy holder or certificate holder as soon as
practicable following the purchase of a travel
insurance protection plan. Unless the policy holder
or certificate holder has started a covered trip or
filed a claim under the travel insurance coverage,
such policyholder or certificate holder would be
allowed to cancel a policy or certificate for a full
refund of the travel protection plan price from the
date of purchase until at least:
○ 15 days following the date of delivery of the
travel protection plan’s fulfillment materials by
postal mail; or
○ 10 days following the date of delivery of the
travel protection plan’s fulfillment materials by
means other than postal mail;
● The company must disclose in the policy
documentation and fulfillment materials whether
the travel insurance is primary or secondary to
other applicable coverage; and
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● Where travel insurance is marketed directly to the
consumer through the insurer’s website or by
others through an aggregator site, it would not be
an unfair trade practice or other violation of law
when an accurate summary or short description of
coverage was provided if the consumer has access
to the full provisions of the policy through electronic
means.
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, that
would require a consumer to take an affirmative action to
deselect coverage. Marketing blanket travel insurance
coverage as free would be an unfair trade practice.
If the jurisdiction of a consumer’s destination requires
insurance coverage, it would not be an unfair trade practice to
require such consumer, as a condition of purchasing a trip or
travel package, to choose between purchasing the required
coverage through the travel retailer or travel insurance
producer supplying the trip or travel package, or the
consumer agreeing to obtain and provide proof of coverage
that meets the jurisdiction’s requirements prior to departure.
Travel Administrator Conditions (Section 8)
The bill would prohibit a person from acting or
representing themself as a travel administrator for travel
insurance in Kansas unless he or she is a licensed property
and casualty insurance producer in Kansas for activities
permitted under that producer license or holds a valid
managing general agent license or a valid third-party
administrator license in Kansas.
The bill would require that an insurer be responsible for
the acts of a travel administrator that administers travel
insurance underwritten by the insurer and ensure the travel
administrator maintains all books and records relevant to the
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insurer and makes such books and records available to the
Commissioner upon request.
Travel Insurance Classification and Filing (New Section
9)
Despite any other Kansas Insurance Act provision, the
bill would require travel insurance to be classified and filed for
purposes of rates and forms under an inland marine line of
insurance [Note: Inland marine insurance covers products
being transported over land or temporarily housed by a third
party]. Travel insurance could be in the form of an individual,
group, or blanket policy. Eligibility and underwriting standards
for travel insurance could be developed and provided based
on travel protection plans designed for individual or identified
marketing or distribution channels, provided those standards
also meet Kansas underwriting standards for inland marine
insurance.
Rules and Regulations Authority (New Section 10)
The bill would authorize the Commissioner to adopt
rules and regulations to implement and enforce the provisions
of this act.
Categorization of Travel Insurance (Section 11)
The bill would amend the definition of travel insurance,
as one of the lines of authority for which an insurance agent
may quality for licensure, to add the following personal risks
incidental to planned travel that would be covered:
emergency evacuations, repatriation of remains, or 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.
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Background
The bill was introduced by the Senate Committee on
Financial Institutions and Insurance at the request of a
re