FLOOR BOOK MEMORANDUM House Committee on the Judiciary
Committee Substitute for H.B. 2536
Prepared by: Mark Adkins
(2/23/2015) Phone: 304-340-3133
email: mark.adkins@wvhouse.gov
______________________________________________________________________________
SPONSORS: Delegates Westfall, Walters, B. White, Ashley, Frich and Kurcaba
TITLE: Relating to travel insurance limited lines producers
DATE INTRODUCED: February 2, 2015; referred to the Committee on Banking and Insurance and then Judiciary
CODE SECTION AFFECTED: adding a new section designated W.Va. Code §33-12-32b
IDENTICAL/SIMILAR BILLS: None.
CHAIRMAN’S SUMMARY: The purpose of this bill is to authorize the Insurance Commissioner to issue a limited lines travel insurance producer license to a business entity and to allow travel retailers and their employees to offer and disseminate travel insurance under the limited lines travel insurance business entity producer license.
FULL ANALYSIS:
I. SUBSTANTIVE ANALYSIS:
A. EXISTING LAW:
None. This is a new section of code.
B. THIS BILL:
This matter was passed out of the House Committee on Banking and Insurance with a strike and insert amendment to the House Bill as well as a title amendment which were both incorporated into the House Committee on Judiciary’s Committee Substitute. A similar bill passed both the House and Senate during the 2014 Legislative Session, but was lost on message at the end of the session (SB593 - 2014).
This bill would add a new section, §33-12-32b, to the insurance article on Insurance Producers and Solicitors, entitled “Insurance Producers and Solicitors”. This new section would be known as the “Travel Insurance Entity Producer Limited License Act." It would allow the Insurance Commissioner to issue a “travel insurance entity producer license” for an annual $200 fee. Travel retailers and their employees would be permitted to “offer and disseminate” travel insurance on behalf of and under the direction of the travel insurance entity producer.
“Travel insurance” means an individual or group policy of insurance that provides coverage for personal risks incident to planned travel, including:
► interruption or cancellation of a trip or event;
► loss of baggage or personal effects;
► damages to accommodations or rental vehicles; and
► sickness, accident, disability or death occurring during travel.
It does not include major medical plans that provide comprehensive medical protection for travelers with trips lasting six months or longer.
The bill would provide definitions and impose certain conditions. Conditions for the travel insurance retailer would include not providing insurance coverage advice, as well as making available informational brochures to prospective purchasers. Conditions for the travel insurance entity producers would include maintaining a register of all travel retailers that offer travel insurance on behalf of the producer, compliance with fingerprinting requirements, payment of licensing fees, and training for the employees offering the insurance, including instructions on the types of insurance offered, ethical sales practices, and required disclosures to prospective customers.
The bill would exempt producers and those operating under the travel insurance entity producer license from examination and continuing education requirements. It would permit a lapsed license to be reinstated within twelve months after the expiration date with payment of a $50 penalty.
The bill would permit a travel insurance entity producer to be appointed and to act as an agent subject to the insurer filing a notice of appointment and payment of a nonrefundable appointment processing fee of $25. It would permit an insurer to appoint a travel insurance entity producer to all or some insurers within the insurer’s holding company system or group by filing a single notice of appointment.
Travel retailers would be authorized to receive compensation for offering and dissemination of travel insurance. The producer would be liable for the acts of the travel retailer in offering and disseminating travel insurance. The producer would also be required to use reasonable means to ensure compliance by the travel retailer with the statutory requirements. The bill specifies certain enforcement measures against a travel retailer, its employees and the producer.
II. SECTION DIRECTORY: §33-12-32b - Travel Insurance Entity Producer Limited License Act.
III. FISCAL ANALYSIS: Requested on 2/4/15 from Insurance Commissioner. Based on the fiscal note for SB 593 [2014], Authorizing issuance of limited lines travel insurance producer license, it is anticipated that this bill will result in a loss of revenue. This 2014 fiscal note provided as follows: Senate Bill 593 would have a negative fiscal impact on the revenues of the Offices of the Insurance Commissioner (OIC). The OIC estimates a negative impact of approximately $33,875 to $23,875 in lost annual revenue if SB 593 is enacted.
IV. COMMENTS
A. CONSTITUTIONAL ISSUES: None identified
B. GOVERNMENT AGENCIES AFFECTED: Insurance Commission.
C. RULE MAKING AUTHORITY: Insurance commissioner may propose rules for legislative approval in accordance with W.Va. Code §29a-3-1 et seq.
D. COMMITTEE REFERENCE: This bill passed the Committee on Banking and Insurance with amendments which are incorporated in the Committee on Judiciary’s committee substitute.
E. TITLE ANALYSIS: This bill’s title appears to be within Constitutional parameters.
F. DRAFTING ISSUES OR OTHER COMMENTS: The House Committee on Banking and Insurance approved a strike and insert amendment which contains technical corrections, title corrections, separates requirements for producers and retailers into distinct subsections, clarifies language, and clarifies that the enforcement mechanisms set forth in the bill are in addition to, and do not replace, other existing enforcement mechanisms of the Insurance Commissioner. These amendments and title amendments were incorporated into the House Committee on Judiciary’s Committee Substitute.
G. EFFECTIVE DATE: Ninety days from passage.