(A50, R63, S435)
AN ACT TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 38-43-25 SO AS TO AUTHORIZE THE DIRECTOR OF THE DEPARTMENT OF INSURANCE TO ISSUE A LIMITED LINES TRAVEL INSURANCE PRODUCER LICENSE; TO AMEND SECTION 38-1-20, AS AMENDED, RELATING TO DEFINITIONS APPLICABLE TO TITLE 38, SO AS TO DELETE THE DEFINITION OF "TRAVEL INSURANCE" AND TO ADD TRAVEL INSURANCE TO THE DEFINITION OF "MARINE INSURANCE"; AND TO AMEND ARTICLE 6 OF CHAPTER 43, TITLE 38, RELATING TO LIMITED LINES TRAVEL INSURANCE, SO AS TO DEFINE NECESSARY TERMS, TO PROVIDE THAT TRAVEL INSURANCE MUST BE CLASSIFIED AND FILED AS INLAND MARINE INSURANCE SUBJECT TO CERTAIN EXCEPTIONS, TO AUTHORIZE THE DIRECTOR OF THE DEPARTMENT OF INSURANCE TO ESTABLISH A TRAVEL INSURANCE PRODUCER LICENSE AND ESTABLISH CERTAIN REQUIREMENTS FOR AN APPLICANT, TO ASSESS A PREMIUM TAX ON TRAVEL INSURANCE PREMIUMS AND ESTABLISH CERTAIN REPORTING REQUIREMENTS, TO ESTABLISH CERTAIN REQUIREMENTS FOR TRAVEL PROTECTION PLANS, TO PROVIDE CERTAIN SALES PRACTICES FOR TRAVEL INSURERS, TO ESTABLISH CERTAIN LICENSING REQUIREMENTS FOR TRAVEL ADMINISTRATORS FOR TRAVEL INSURANCE, AND TO AUTHORIZE THE DIRECTOR TO PROMULGATE REGULATIONS.
Be it enacted by the General Assembly of the State of South Carolina:
Travel insurance producer licensing
SECTION 1. Article 1, Chapter 43, Title 38 of the 1976 Code is amended by adding:
"Section 38-43-25. (A) The director may issue a limited lines travel insurance producer license to an individual that has filed with the director an application for a limited lines travel insurance producer license in a form and manner prescribed by the director. A limited lines travel insurance producer must 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, respectively.
(B) 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 must be appointed by an insurer in order to sell, solicit, or negotiate travel insurance."
Definitions
SECTION 2. Section 38-1-20(40) and (60) of the 1976 Code is amended to read:
"(40) 'Marine insurance' means each insurance against loss or destruction of or damage to aircraft, vessels, or watercraft and their cargoes; insurance covering the risks or perils of navigation, transit, or transportation of all forms of property, including the liability of a carrier for hire for the loss of property of shippers delivered for transporting; marine builder's risks; bridges, tunnels, piers, wharves, docks and slips, dry docks, marine railways, and other aids to navigation and transportation, precious stones, precious metals, and jewelry, whether in the course of transportation or otherwise; coverage of personal property by all risk forms known as the 'Personal Property Floater'; and coverage of mobile machinery and equipment. Inland marine insurance includes 'travel insurance' as defined in Section 38-43-720(14).
(60) Reserved."
Limited Lines Travel Insurance Act
SECTION 3. Article 6, Chapter 43, Title 38 of the 1976 Code is amended to read:
Section 38-43-710. This article must be known and may be cited as the 'Limited Lines Travel Insurance Act'.
Section 38-43-715. (A) This article applies to travel insurance sold, solicited, negotiated, or offered in this State that covers a resident in this State and is delivered or issued for delivery in this State. It does not apply to cancellation fee waivers and travel assistance services except as expressly provided herein.
(B) All other applicable provisions of this title continue to apply to travel insurance. In the event of a conflict between a provision of this article and any other applicable provisions of this title, the provision of this article controls.
Section 38-43-720. For the purposes of this article:
(1) 'Aggregator site' means a website that provides access to information regarding insurance products from more than one insurer, including product and insurer information, for use in purchasing an insurance product.
(2) 'Blanket travel insurance' means 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 each individual member of the eligible group.
(3) 'Cancellation fee waiver' means a contractual agreement between a supplier of travel services and its 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) 'Director' means the Director of the Department of Insurance or his designee as set forth in Section 38-1-20(19).
(5) '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, but not limited to:
(a) an entity engaged in the business of providing travel or travel services including, but not limited to, 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 such as airlines, cruise lines, railroads, steamship companies, and public bus carriers, 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 such travel;
(b) a college, school, or other institution of learning covering students, teachers, employees, or volunteers;
(c) an employer covering a group of employees, volunteers, contractors, board of directors, dependents, or guests;
(d) a sports team, camp, or sponsor covering participants, members, campers, employees, officials, supervisors, or volunteers;
(e) a religious, charitable, recreational, educational, or civic organization or branch thereof covering a group of members, participants, or volunteers;
(f) a financial institution or financial institution vendor, parent holding company, trustee, or agent of or designated by one or more financial institutions or vendors, including accountholders, credit card holders, debtors, guarantors, or purchasers;
(g) 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 such association covering its members;
(h) 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 director's permitting the use of a trust and this state's premium tax provisions in Section 38-7-20 of one or more associations meeting the requirements of subitem (g);
(i) an entertainment production company covering any group of participants, volunteers, audience members, contestants, or workers;
(j) a volunteer fire department, ambulance, rescue, police, court, or any first aid, civil defense, or other such volunteer group;
(k) a preschool, daycare institution for children or adults, and 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 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; or
(m) any other group where the director has determined 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.
(6) 'Fulfillment materials' means documentation sent to the purchaser of a travel protection plan confirming the purchase and providing the travel protection plan's coverage and travel assistance service details.
(7) 'Group travel insurance' means travel insurance issued to any eligible group.
(8) 'Inland marine' means property coverage for products, materials, and equipment transported over land, including travel insurance coverage as well as coverage for equipment, fine art, precious stones, precious metals, jewelry, and personal watercraft, whether in the course of transportation or otherwise; coverage of personal property by all risk forms known as the 'Personal Property Floater'; and coverage of mobile machinery and equipment.
(9) 'Limited lines travel insurance producer' means one of the following when designated by an insurer as the travel insurance supervising entity:
(a) a licensed managing general underwriter;
(b) a licensed managing general agent or third-party administrator; or
(c) a licensed insurance producer.
(10) 'Offer and disseminate' means providing general information, including a description of the coverage and price, as well as processing the application, collecting premiums, and performing other nonlicensable activities permitted by the State.
(11) 'Primary certificate holder' means, concerning premium taxes, an individual who elects and purchases travel insurance under a group policy.
(12) 'Primary policyholder' means, concerning premium taxes, an individual who elects and purchases individual travel insurance.
(13) 'Travel administrator' means a person who, directly or indirectly, underwrites, collects charges, collateral, or premiums from, or adjusts or settles claims on residents of this State, in connection with travel insurance, except that a person may not be considered a travel administrator if that person's only actions that would otherwise cause it to be considered a travel administrator are:
(a) 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;
(b) an insurance producer selling insurance or engaged in administrative and claims-related activities within the scope of the producer's license;
(c) a travel retailer offering and disseminating travel insurance and registered under the license of a limited lines travel insurance producer;
(d) an individual adjusting or settling claims in the normal course of that 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 while acting as a travel administrator for the direct and assumed insurance business of an affiliated insurer.
(14) 'Travel assistance services' means noninsurance services for which the consumer is not indemnified based on a fortuitous event, and where providing the service does not result in the transfer or shifting of risk that would constitute the business of insurance. Travel assistance services include, but are not limited to, 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 similar service that is furnished in connection with planned travel. Travel assistance services are not insurance and are not related to insurance.
(15) 'Travel insurance' means insurance coverage for personal risks incident to planned travel including, but not limited to:
(a) interruption or cancellation of 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 upon determinable contingencies related to travel as approved by the director.
Travel insurance does 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 insurance that requires a specific insurance producer license.
(16) '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.
(17) 'Travel retailer' means a business entity that makes, arranges, or offers travel services 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.
Section 38-43-725. (A) Notwithstanding any other provision of this title, travel insurance must be classified and filed for purposes of rates and forms as inland marine insurance; provided, however, that travel insurance that provides coverage for sickness, accident, disability, or death occurring during travel, either exclusively or in conjunction with related coverages of emergency evacuation or repatriation of remains, or incidental limited property and casualty benefits such as baggage or trip cancellation, may be filed by an authorized insurer under either an accident and health line of insurance or an inland marine line of insurance.
(B) Travel insurance may be in the form of an individual, group, or blanket policy.
(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, provided those standards also meet this state's underwriting standards for inland marine insurance.
Section 38-43-730. (A) A travel retailer only may offer and disseminate travel insurance under a limited lines travel insurance producer license if:
(1) the limited lines travel insurance producer or travel retailer provides purchasers of travel insurance the following information on a form prescribed by the director:
(a) a description of the material terms or the actual material terms of the insurance coverage;
(b) a description of the process for filing a claim;
(c) a description of the review or cancellation process for the travel insurance policy; and
(d) the identity and contact information of the insurer and limited lines travel insurance producer;
(2) the limited lines travel insurance producer, at the time of licensure, establishes and subsequently maintains and updates a register of each travel retailer that offers insurance on its behalf, including the name, address, and contact information of the travel retailer and an officer or person who directs or controls the operations of the travel retailer, and the federal employment identification number of the travel retailer;
(3) the limited lines travel insurance producer submits the register to the department upon reasonable request;
(4) the limited lines travel insurance producer certifies that the travel retailers registered comply with 18 U.S.C. Section 1033;
(5) the limited lines travel insurance producer designates one of its employees, who is a licensed individual producer, as the 'Designated Responsible Producer' or 'DRP' who is responsible for compliance of the limited lines travel insurance producer with the travel insurance laws, rules, and regulations of the State;
(6) the DRP, president, secretary, treasurer, and another officer or person who directs or controls the insurance operations of the limited lines travel insurance producer each comply with the fingerprinting requirements applicable to insurance producers in the resident state of the limited lines travel insurance producer;
(7) the limited lines travel insurance producer has paid all applicable insurance producer licensing fees; and
(8) the limited lines travel insurance producer requires each employee of the travel retailer whose duties include offering and disseminating travel insurance to receive a program of instruction or training, subject to review by the director, and which shall contain instructions on the types of insurance offered, ethical sales practices, and required disclosures to prospective customers, among other things.
(B) A travel retailer who offers or disseminates travel insurance shall make brochures or other written materials available to prospective purchasers, and these brochures or other written materials must:
(1) provide the identity and contact information of the insurer and the limited lines travel insurance producer;
(2) explain that the purchase of travel insurance is not required in order to purchase another product or service from the travel retailer; and
(3) explain that