23.0530.02000
Sixty-eighth
Legislative Assembly SENATE BILL NO. 2173
of North Dakota
Introduced by
Senators Klein, Burckhard, Larsen
Representatives Kasper, Louser
1 A BILL for an Act to create and enact chapter 26.1-58 of the North Dakota Century Code,
2 relating to the sale and regulation of travel insurance; and to amend and reenact section
3 26.1-26-54 of the North Dakota Century Code, relating to the licensing of limited lines travel
4 insurance producers.
5 BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA:
6 SECTION 1. AMENDMENT. Section 26.1-26-54 of the North Dakota Century Code is
7 amended and reenacted as follows:
8 26.1-26-54. Insurance licenses for limited lines travel insurance producers.
9 1. Travel insurance, as that term is defined in this section, is a limited line of insurance.
10 2. As used in this section:
11 a. "Limited lines travel insurance producer" means a:
12 (1) Licensed managing general agent or third-party administrator; or
13 (2) Licensed insurance producer, including a limited lines producer, designated
14 by an insurer as the travel insurance supervising entity as set forth under
15 subsection 9; or
16 (3) Travel administrator, as defined in section 26.1-58-02.
17 b. "Offer and disseminate" means to provide general information, including a
18 description of the coverage and price, as well as to process the application,
19 collect premiums, and perform other nonlicensable activities permitted by the
20 state.
21 c. "Travel insurance" means insurance coverage for personal risks incident to
22 planned travel, including interruption or cancellation of a trip or event,; loss of
23 baggage or personal effects,; damages to accommodations or rental vehicles, or;
24 sickness, accident, disability, or death occurring during travel; emergency
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1 evacuation; repatriation of remains; or any other contractual obligations to
2 indemnify or pay a specified amount to the traveler upon determinable
3 contingencies related to travel as approved by the commissioner. The term does
4 not include a major medical plan that provides comprehensive medical protection
5 for an individual on a trip lasting at least six months, including an individual
6 working or residing overseas as an expatriate, or any other product that requires
7 a specific insurance producer license.
8 d. "Travel retailer" means a business entity that makes, arranges, or offers travel
9 services and which may offer and disseminate travel insurance as a service to
10 customers on behalf of and under the direction of a limited lines travel insurance
11 producer.
12 3. Notwithstanding any other provision of law:
13 a. The commissioner may issue a limited lines travel insurance producer license to
14 an individual or business entity that files an application with the commissioner in
15 a form and manner prescribed by the commissioner. A licensed limited lines
16 travel insurance producer may sell, solicit, or negotiate travel insurance through a
17 licensed insurer. A person may not act as a limited lines travel insurance
18 producer or travel insurance retailer unless properly licensed or registered.
19 b. A travel retailer may offer and disseminate travel insurance, if under a limited
20 lines travel insurance producer business entity license only if the following
21 conditions are met:
22 (1) The limited lines travel insurance producer or travel retailer provideprovides
23 to purchasers of travel insurance:
24 (a) TheA description of the material terms or the actual material terms of
25 the insurance coverage;
26 (b) A description of the claim filing process;
27 (c) A description of the policy review or cancellation process for the travel
28 insurance policy; and
29 (d) The identity and contact information of the insurer and limited lines
30 producer.
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1 (2) At the time of licensure, the limited lines travel insurance producer
2 establishes and maintains a register of each travel retailer that offers
3 insurance on the behalf of the producer. The register must be on a form
4 prescribed by the commissioner. Annually, the register must be updated by
5 the limited lines travel insurance producer. The register must include the
6 name, address, and contact information of the travel retailer and a person
7 that controls the travel retailer's operations. The register must include the
8 travel retailer's federal tax identification number. Upon request, the limited
9 lines travel insurance producer shall submit the register to the insurance
10 department. The limited lines producer shall certify that the travel retailer
11 registered complies with the Violent Crime and Law Enforcement Act of
12 1994 [Pub. L. 103-322; 108 Stat. 1796; 18 U.S.C. 1033 et seq.]. The
13 grounds for the suspension, revocation, and penalties applicable to resident
14 insurance producers under this chapter, must be applicable to limited lines
15 travel insurance producers and travel retailers.
16 (3) The limited lines travel insurance producer designates one of the producer's
17 licensed insurance employees as the individual responsible for the
18 compliance with the state's travel insurance laws, rules, and regulations.
19 (4) The designated employee, president, secretary, treasurer, or any other
20 individual who controls the producer's insurance operations complies with
21 the fingerprinting requirements applicable to insurance producers in the
22 resident state of the limited lines travel insurance producer.
23 (5) The limited lines travel insurance producer pays all applicable licensing fees
24 as set forth in state law.
25 (6) The limited lines travel insurance producer requires each employee and
26 authorized representative of the travel retailer, who offer and disseminate
27 travel insurance, to receive training. The commissioner may review the
28 training procedures, which is subject, at the discretion of the commissioner,
29 to review and approval. The training material must contain instructions on
30 the type of insurance offered, ethical sales practices, and required
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1 disclosures to prospective customers, and upon request must be provided
2 to the commissioner for inspection.
3 4. The limited lines travel insurance producer and any travel retailer and the travel
4 retailer's employees offering and disseminating travel insurance under the limited lines
5 travel insurance producer license shall be subject to the provisions of chapters 26.1-04
6 and 26.1-26.
7 5. The travel retailer and its employees act on behalf of the limited lines producer and the
8 producer is responsible for any representations made by the employees of the travel
9 retailer relating to insurance products offered or disseminated through the travel
10 retailer.
11 6. If the insurance commissioner determines that a travel retailer, or a travel retailer's
12 employee has violated any provision of this chapter or any other provision of this title,
13 the commissioner may:
14 a. Direct the limited lines travel insurance producer to implement a corrective action
15 plan with the travel retailer; or
16 b. Revoke the authorization of the travel retailer to transact travel insurance on
17 behalf of the limited lines travel insurance producer under its license and direct
18 the limited lines travel insurance producer to remove the travel retailer's name
19 from its register.
20 7.5. If the insurance commissioner determines that a travel retailer, or a travel retailer's
21 employee, has violated any provision in this chapter or any other provision of this title,
22 the commissioner may:
23 a. Suspend or revoke the license of the limited lines travel insurance producer;
24 b. Issue a cease and desist order against the license of the limited lines travel
25 insurance producer; and
26 c. Impose a monetary fine on the limited lines travel insurance producer.
27 8.6. Limited lines travel insurance producers, and those registered under the producer's
28 license, are exempt from continuing education requirements.
29 9.7. A travel retailer shall make brochures or other written materials that have been
30 approved by the travel insurer available to prospective purchasers which. The
31 materials must include information that, at a minimum:
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1 a. ProvideProvides the identity and contact information of the insurer and the limited
2 lines travel insurance producer;
3 b. ExplainExplains the purchase of travel insurance is not required in order to
4 purchase any other product or service from the travel retailer; and
5 c. ExplainExplains an unlicensed travel retailer may provide only general
6 information about the insurance offered by the travel retailer, including a
7 description of the coverage and price. An unlicensed travel retailer may notis not
8 qualified or authorized to answer technical questions about the terms and
9 conditions of the insurance offered by the travel retailer or evaluate the adequacy
10 of existing insurance coverage.
11 10.8. An unlicensed employee or authorized representative of a travel retailer may not:
12 a. Evaluate or interpret the technical terms, benefits, or conditions of the offered
13 travel insurance coverage;
14 b. Evaluate or advise a prospective purchaser regarding existing insurance
15 coverage;
16 c. Be held out as a licensed insurer, licensed producer, or insurance expert; or
17 d. Be directly paid a commission or any other compensation by an insurer for the
18 sale of insurance, except in accordance with this chapter and chapter 26.1-58.
19 11.9. Notwithstanding any other provision of law, a travel retailer who is in compliance with
20 all requirements of this section may receive fair compensation for offering and
21 disseminating travel insurancewhose insurance-related activities, and those of the
22 travel retailer's employees and authorized representatives, are limited to offering and
23 disseminating travel insurance on behalf of and under the direction of a limited lines
24 travel insurance producer meeting the conditions in this section, is authorized to
25 receive related compensation, upon registration by the limited lines travel insurance
26 producer as described in paragraph 2 of subdivision b of subsection 3.
27 12.10. Travel insurance may be provided under an individual policy or under a group or
28 masterblanket policy.
29 13.11. The limited lines travel insurance producer is responsible for the acts of the travel
30 retailer. The limited lines travel insurance producer shall ensure the travel retailer
31 complies with this chapter and chapter 26.1-58.
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1 12. A person licensed in a major line of authority as an insurance producer is authorized to
2 sell, solicit, and negotiate travel insurance. A property and casualty insurance producer
3 is not required to become appointed by an insurer in order to sell, solicit, or negotiate
4 travel insurance.
5 SECTION 2. Chapter 26.1-58 of the North Dakota Century Code is created and enacted as
6 follows:
7 26.1-58-01. Scope.
8 1. This chapter applies to travel insurance that covers any resident of this state, and is
9 sold, solicited, negotiated, or offered in this state, and policies and certificates
10 delivered or issued for delivery in this state. This chapter does not apply to
11 cancellation fee waivers or travel assistance services, except as expressly provided in
12 this chapter.
13 2. All other applicable provisions of this state's insurance laws continue to apply to travel
14 insurance, except the specific provisions of this chapter supersede any general
15 provisions of law that otherwise would be applicable to travel insurance.
16 26.1-58-02. Definitions.
17 For purposes of this chapter, unless the context otherwise requires:
18 1. "Aggregator site" means a website that provides access to information regarding
19 insurance products from more than one insurer, including product and insurer
20 information, for use in comparison shopping.
21 2. "Blanket travel insurance" means a policy of travel insurance issued to an eligible
22 group providing coverage for specific classes of persons defined in the policy with
23 coverage provided to all members of the eligible group without a separate charge to
24 individual members of the eligible group.
25 3. "Cancellation fee waiver" means a contractual agreement between a supplier of travel
26 services and the supplier's customer to waive some or all of the nonrefundable
27 cancellation fee provisions of the supplier's underlying travel contract with or without
28 regard to the reason for the cancellation or form of reimbursement. A cancellation fee
29 waiver is not insurance.
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1 4. "Eligible group", solely for purposes of travel insurance, means two or more persons
2 that are engaged in a common enterprise, or have an economic, educational, or social
3 affinity or relationship, including any of the following:
4 a. An entity engaged in the business of providing travel or travel services, including
5 tour operators, lodging providers, vacation property owners, hotels and resorts,
6 travel clubs, travel agencies, property managers, cultural exchange programs,
7 and common carriers or the operator, owner, or lessor of a means of
8 transportation of passengers, including airlines, cruise lines, railroads, steamship
9 companies, and public bus carriers, under which with regard to any particular
10 travel or type of travel or travelers, all members or customers of the group must
11 have a common exposure to risk attendant to the travel;
12 b. A college, school, or other institution of learning, covering students, teachers,
13 employees, or volunteers;
14 c. An employer covering any group of employees, volunteers, contractors, board of
15 directors, dependents, or guests;
16 d. A sports team, camp, or sponsor of a sports team or camp, covering participants,
17 members, campers, employees, officials, supervisors, or volunteers;
18 e. A religious, charitable, recreational, educational, or civic organization, or branch
19 thereof, covering any group of members, participants, or volunteers;
20 f. A financial institution or financial institution vendor; parent holding company,
21 trustee, or agent of the financial institution or vendor; or parent holding company,
22 trustee, or agent designated by one or more financial institutions or financial
23 institution vendors, including account holders, credit card holders, debtors,
24 guarantors, or purchasers;
25 g. An incorporated or unincorporated association, including labor unions, having a
26 common interest, constitution, and bylaws, and organized and maintained in
27 good faith for purposes other than obtaining insurance for members or
28 participants of the association covering the association's members;
29 h. A trust or the truste