Regulating travel insurance. (FE)

Travel administrators The bill imposes requirements related to “travel administrators,” who are defined as persons who directly or indirectly underwrite, collect charges or premiums from, or adjust or settle claims of Wisconsin residents in connection with travel insurance. The bill specifies that the term “travel administrator” does not include an individual working for and subject to the supervision and control of a travel administrator; an intermediary selling insurance or engaging in administrative and claims related activities within the scope of the intermediary's license; a travel retailer; an attorney acting in his or her professional capacity; or an affiliated business entity of a licensed insurer. Under the bill, a person may only act or represent the person as a travel administrator in Wisconsin if the person is a licensed property and casualty insurance intermediary for activities permitted under the license or the person holds a valid managing general agent or third-party administrator license. The bill provides that an insurer is responsible for the acts of a travel administrator who is administering travel insurance underwritten by the insurer and requires that the insurer ensure that the travel administrator maintains all relevant books and records. The bill also provides that travel administrators are not subject to regulation as public adjusters.

Travel protection plans The bill imposes requirements on travel protection plans, which are defined as plans that provide any combination of travel insurance, travel assistance services, and cancellation fee waivers. Under the bill, a travel protection plan may be offered for one price for the combined items if there is sufficient disclosure of the items and the plan's fulfillment materials contain specified information about the items.

Additionally, the bill provides that a person who cancels a travel protection plan that includes travel insurance may receive a full refund if the insured has not started the trip or filed a claim and the cancellation occurs no later than 15 days after delivery of the fulfillment materials by postal mail or 10 days if delivered by other means, unless the policy specifies a greater number of days.

Disclosures The bill requires that all documents provided to a prospective purchaser be consistent with the travel insurance policy, forms, endorsements, rate filings, and certificate of insurance. Additionally, the bill requires that the policy and a travel protection plan's fulfillment materials state whether the travel insurance is primary or secondary to other coverage and that the policy information and fulfillment materials be provided to a plan's purchaser as soon as practicable after the purchase.

For travel insurance policies that contain a preexisting condition exclusion, the bill requires that a prospective purchaser be given information about the exclusion prior to purchase and that information about the exclusion be included in fulfillment materials.

Opt out provisions The bill prohibits a person offering, soliciting, or negotiating travel insurance or a travel protection plan on an individual or group basis from requiring the purchaser to affirmatively deselect coverage when purchasing a trip.

Unfair marketing practices The bill prohibits the marketing of blanket travel insurance as free and the offering or selling of a travel insurance policy that could never result in payment of any claims for any insured. The bill specifies that it is not an unfair marketing practice to include a summary of policy coverage on an Internet site marketing travel insurance so long as the summary is accurate and prospective purchasers have access to the policy's full provisions through electronic means. The bill also specifies that it is not an unfair marketing practice for a travel retailer or limited lines travel insurance producer to require that a person purchasing a trip to a location that requires insurance coverage choose, as a condition of purchasing the trip, between purchasing the coverage through the travel retailer or producer or agreeing to obtain and provide proof of coverage prior to departure.

Other provisions The bill specifies that travel insurance may be offered as a blanket policy. The bill also specifies that an intermediary licensed in a major line of authority is authorized to sell, solicit, and negotiate travel insurance and that a property and casualty insurance intermediary does not have to be appointed by an insurer to sell, solicit, or negotiate travel insurance. Under the bill, travel insurance is generally treated in a manner similar as marine insurance for purposes of rates and forms, underwriting standards, and the state premium tax on foreign insurers. The bill authorizes an insurer to establish and use eligibility and underwriting standards for travel insurance based on travel protection plans designed for individual or identified marketing or distribution channels so long as the standards meet any requirements related to standards for inland marine insurance.