2019 -- S 0256

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LC001246

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2019

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A N   A C T

RELATING TO INSURANCE -- TRAVEL INSURANCE ACT

     Introduced By: Senator Roger Picard

     Date Introduced: February 13, 2019

     Referred To: Senate Commerce

     It is enacted by the General Assembly as follows:

     SECTION 1. Chapter 27-79 of the General Laws entitled "Limited Lines Travel

Insurance Act" is hereby repealed in its entirety.

CHAPTER 27-79

Limited Lines Travel Insurance Act

     27-79-1. Short title.

     This act shall be known and may be cited as the "Limited Lines Travel Insurance Model

Act."

     27-79-2. Definitions.

     As used in this chapter, the following terms shall mean:

     (1) "Limited lines travel insurance producer" means a licensed insurance producer

designated by an insurer as the travel insurance supervising producer as set forth in § 27-79-6

below.

     (2) "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 non-licensable activities permitted by the state.

     (3) "Travel insurance" means insurance coverage for personal risks incident to planned

travel, including but not limited to:

     (i) Interruption or cancellation of trip or event;

     (ii) Loss of baggage or personal effects;

     (iii) Damages to accommodations or rental vehicles; or

     (iv) Sickness, accident, disability or death occurring during travel.

     Travel insurance does not include major medical plans, which provide comprehensive

medical protection for travelers with trips lasting six (6) months or longer, including for example,

those working overseas as an ex-patriot or military personnel being deployed.

     (4) "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.

     27-79-3. Requirements.

     (a) A travel retailer may offer and disseminate travel insurance only if the limited lines

travel insurance producer complies with the following:

     (1) The limited lines travel insurance producer or travel retailer provides to purchasers of

travel insurance:

     (i) A description of the material terms or the actual material terms of the insurance

coverage;

     (ii) A description of the process for filing a claim;

     (iii) A description of the review or cancellation process for the travel insurance policy;

and

     (iv) The identity and contact information of the insurer and limited lines travel insurance

producer.

     (2) At the time of licensure, the limited lines travel insurance producer shall establish and

maintain a register of each travel retailer that offers travel insurance on the limited lines travel

insurance producer's behalf. The register shall be maintained and updated by the limited lines

travel insurance producer and shall include the name, address, and contact information of the

travel retailer and an officer or person who directs or controls the travel retailer's operations, and

the travel retailer's federal employment identification number. The limited lines travel insurance

producer shall submit such register to the state insurance department upon reasonable request.

The limited lines travel insurance producer shall also certify that the travel retailer registered

complies with applicable federal law.

     (3) The limited lines travel insurance producer is responsible for compliance with the

travel insurance laws, rules and regulations of the state.

     (4) The limited lines travel insurance producer has paid all applicable insurance producer

licensing fees.

     (5) The limited lines travel insurance producer requires each employee of the travel

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retailer whose duties include offering and disseminating travel insurance to receive a program of

instruction or training, which may be subject to review by the commissioner. The training

material shall, at a minimum, contain instructions on the types of insurance offered, ethical sales

practices, and required disclosures to prospective customers.

     (b) Any travel retailer offering or disseminating travel insurance shall make available to

prospective purchasers brochures or other written materials that:

     (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 any

other product or service from the travel retailer; and

     (3) Explain that an unlicensed travel retailer is permitted to provide general information

about the insurance offered by the travel insurance producer or insurer, including a description of

the coverage and price, but is not qualified or authorized to answer technical questions about the

terms and conditions of the insurance offered by the travel retailer or to evaluate the adequacy of

the customer's existing insurance coverage.

     (c) A travel retailer who is not licensed as an insurance producer may not:

     (1) Evaluate or interpret the technical terms, benefits, and conditions of the offered travel

insurance coverage;

     (2) Evaluate or provide advice concerning a prospective purchaser's existing insurance

coverage; or

     (3) Hold himself/herself or itself out as a licensed insurer, licensed producer, or insurance

expert.

     27-79-4. Compensation.

     A travel retailer whose insurance-related activities, and those of its employees, are

limited to offering and disseminating travel insurance on behalf of and under the direction of a

limited lines travel insurance producer meeting the conditions stated in this chapter, is authorized

to do so and receive related compensation.

     27-79-5. Policy.

     Travel insurance may be provided under an individual policy or under a group or master

policy.

     27-79-6. Responsibility.

     As the insurer designee, the limited lines travel insurance producer is responsible for the

acts of the travel retailer and shall use reasonable means to ensure compliance by the travel

retailer with this chapter.

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     27-79-7. Enforcement.

     The limited lines travel insurance producer and any travel retailer offering and

disseminating travel insurance under the limited lines travel insurance producer license shall be

subject to the penalties for violations of this chapter pursuant to § 42-14-16.

     SECTION 2. Title 27 of the General Laws entitled "INSURANCE" is hereby amended

by adding thereto the following chapter:

CHAPTER 79.1

TRAVEL INSURANCE ACT

     27-79.1-1. Short title.

     This chapter shall be known and may be cited as the "Travel Insurance Act."

     27-79.1-2. Scope and purposes.

     (a) The purpose of this chapter is to promote the public welfare by creating a

comprehensive legal framework within which travel insurance may be sold in this state.

     (b) The requirements of this chapter shall apply to travel insurance policies and

certificates which are delivered or issued for delivery in this state. It shall not apply to

cancellation fee waivers and travel assistance services, except as expressly provided herein.

     (c) All other applicable provisions of the state's insurance laws shall continue to apply to

travel insurance; provided, that, the specific provisions of this chapter shall supersede any other

provisions of the general or public laws that would otherwise be applicable to travel insurance.

     27-79.1-3. Definitions.

     As used in this chapter, the following terms shall have the following meanings:

     (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 comparison shopping.

     (2) "Blanket travel insurance" means a policy of travel insurance issued to 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.

     (3) "Cancellation fee waiver" means 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 travel contract, with or without regard to the reason for the

cancellation or form of reimbursement. A cancellation fee waiver is not insurance.

     (4) "Eligible group," for the purposes of travel insurance, means two (2) or more persons

who are engaged in a common enterprise, or have an economic, educational, or social affinity or

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relationship, including, but not limited to, any of the following:

     (i) Any 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, including, but

not limited to, 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 the travel;

     (ii) Any college, school, or other institution of learning covering students, teachers or

employees or volunteers;

     (iii) Any employer covering any group of employees, volunteers, contractors, board of

directors, dependents or guests;

     (iv) Any sports team, camp, or sponsor thereof covering participants, members, campers,

employees, officials, supervisors, or volunteers;

     (v) Any religious, charitable, recreational, educational, or civic organization or branch

thereof covering any group of members, participants, or volunteers;

     (vi) Any financial institution or financial institution vendor, or parent holding company,

trustee, or agent of, or designated by, one or more financial institutions or financial institution

vendors, including accountholders, credit card holders, debtors, guarantors, or purchasers;

     (vii) Any 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;

     (viii) Any trust or the trustees of a fund established, created or maintained for the benefit

of and covering members, employees or customers, subject to the insurance commissioner

(commissioner), as defined in §27-2.7-1, permitting the use of a trust and the state's premium tax

provisions in § 27-79.1-6 of one or more associations meeting the requirements of subsection

(4)(vii) of this section;

     (ix) Any entertainment production company covering any group of participants,

volunteers, audience members, contestants, or workers;

     (x) Any volunteer fire department, ambulance, rescue, police, court or any first aid, civil

defense or other such volunteer group;

     (xi) Preschools, daycare institutions for children or adults, and senior citizen clubs;

     (xii) Any automobile or truck rental or leasing company covering a group of individuals

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who may become renters, lessees, or passengers defined by their travel status on the rented or

leased vehicles. The common carrier, the 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

     (xiii) Any other group where the commissioner 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.

     (5) "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

assistance details.

     (6) "Group travel insurance" means travel insurance issued to any eligible group.

     (7) "Limited lines travel insurance producer" means:

     (i) Licensed managing general agent or third-party administrator;

     (ii) Licensed insurance producer, including a limited lines producer; or

     (iii) Travel administrator.

     (8) "Offer and disseminate" means providing general information, including a description

of the coverage and price, as well as processing the application, and collecting premiums.

     (9) "Primary certificate holder" means an individual person who elects and purchases

travel insurance under a group policy.

     (10) "Primary policyholder" means an individual person who elects and purchases

individual travel insurance.

     (11) "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 shall not be considered a travel

administrator if that person's only actions that would otherwise cause it to be considered a travel

administrator are among the following:

     (i) 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;

     (ii) An insurance producer selling insurance or engaged in administrative and claims

related activities within the scope of the producer's license;

     (iii) A travel retailer offering and disseminating travel insurance, and registered under the

license of a limited lines travel insurance producer in accordance with this chapter;

     (iv) An individual adjusting or settling claims in the normal course of that individual's

practice or employment as an attorney at law and who does not collect charges or premiums in

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connection with insurance coverage; or

     (v) 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.

     (12) "Travel assistance services" means non-insurance services for which the consumer 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. 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 other service that is

furnished in connection with planned travel. Travel assistance services are not insurance and not

related to insurance.

     (13) "Travel insurance" means insurance coverage for personal risks incident to planned

travel, including:

     (i) Interruption or cancellation of trip or event;

     (ii) Loss of baggage or personal effects;

     (iii) Damages to accommodations or rental vehicles;

     (iv) Sickness, accident, disability or death occurring during travel;

     (v) Emergency evacuation;

     (vi) Repatriation of remains; or

     (vii) 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.

     Travel insurance does not include major medical plans, that provide comprehensive

medical protection for travelers with trips lasting longer than six (6) months or longer, including,

for example, those working or residing overseas as an expatriate, or any other product that

requires a specific insurance producer license.

     (14) "Travel protection plans" means plans that provide one or more of the following:

     (i) Travel insurance,

     (ii) Travel assistance services, and

     (iii) Cancellation fee waivers.

     (15) "Travel retailer" means a business entity that makes, arranges, or offers planned

travel services, and may offer and disseminate travel insurance as a service to its customers on

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behalf of, and under the direction of, a limited lines travel insurance producer.

     27-79.1-4. Licensing and registration requirements.

     (a) The commissioner may issue to an individual or business entity that has filed with the

commissioner an application for a limited lines travel insurance producer license in a form and

manner prescribed by the commissioner, a limited lines travel insurance producer license, which

authorizes the limited lines travel insurance producer to sell, solicit, or negotiate travel insurance

through a licensed insurer. No person may act as a limited lines travel insurance producer or

travel insurance retailer unless properly licensed or registered.

     (b) A travel retailer may offer and disseminate travel insurance under a limited lines

travel insurance producer business entity license only, and if the following conditions are met:

     (1) The limited lines travel insurance producer or travel retailer provides to purchasers of

travel insurance:

     (i) A description of the material terms or the actual material terms of the insurance

coverage;

     (ii) A description of the process for filing a claim;

     (iii) A description of the review or cancellation process for the travel insurance policy;

and

     (iv) The identity and contact information of the insurer and limited lines travel insurance

producer.

     (2) At the time of licensure, the limited lines travel insurance producer shall establish and

maintain a register, on a form prescribed by the commissioner of each travel retailer, that offers

travel insurance on the limited lines travel insurance producer's behalf. The register shall be

maintained and updated by the limited lines travel insurance producer, and shall include the

name, address, and contact information of the travel retailer, and an officer or person who directs

or controls the travel retailer's operations, and the travel retailer's federal tax identification

number. The limited lines travel insurance producer shall submit the register to the commissioner

upon reasonable request. The limited lines travel insurance producer shall also certify that the

travel retailer registered complies with 18 U.S.C. § 1033. The grounds for the suspension,

revocation, and the penalties applicable to resident insurance producers shall be applicable to the

limited lines travel insurance producers and travel retailers.

     (3) The limited lines travel insurance producer has designated one of its employees who

is a licensed individual producer as the person (a "designated responsible producer" or "DRP")

responsible for the compliance with the travel insurance laws and regulations applicable to the

limited lines travel insurance producer and its registrants.

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     (4) The DRP, president, secretary, treasurer, and any other officer or person who directs

or controls the limited lines travel insurance producer's insurance operations shall comply with

the fingerprinting requirements applicable to insurance producers in the resident state of the

limited lines travel insurance producer.

     (5) The limited lines travel insurance producer has paid all applicable licensing fees as set

forth in applicable state law.

     (6) The limited lines travel insurance producer must require each employee and

authorized representative of the travel retailer whose duties include offering and disseminating

travel insurance, to receive a program of instruction or training, which is subject at the discretion

of the commissioner for review and approval. The training material shall, at a minimum, contain

adequate instructions on the types of insurance offered, ethical sales practices, and required

disclosures to prospective customers.

     (c) Any travel retailer offering or disseminating travel insurance shall make available to

prospective purchasers brochures or other written materials that have been approved by the travel

insurer. Such materials shall include information which, at a minimum:

     (1) Provides the identity and contact information of the insurer and the limited lines travel

insurance producer;

     (2) Explains that the purchase of travel insurance is not required in order to purchase any

other product or service from the travel retailer; and

     (3) Explains that an unlicensed travel retailer is permitted to provide only general

information about the insurance offered by the travel retailer, including a description of the

coverage and price, but is not qualified or authorized to answer technical questions about the

terms and conditions of the insurance offered by the travel retailer or to evaluate the adequacy of

the customer's existing insurance coverage.

     (d) A travel retailer employee or authorized representative, who is not licensed as an

insurance producer may not:

     (1) Evaluate or interpret the technical terms, benefits, and conditions of the offered travel

insurance coverage;

     (2) Evaluate or provide advice concerning a prospective purchaser's existing insurance

coverage; or

     (3) Hold themselves out as a licensed insurer, licensed producer, or insurance expert.

     (e) Any 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 is not required to become appointed by an insurer in order to sell, solicit, or negotiate

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travel insurance.

     27 79.1-5. Compensation.

     A travel retailer whose insurance related activities, and those of its employees, are limited

to offering and disseminating travel insurance on behalf of and under the direction of a limited

lines travel insurance producer meeting the conditions stated in this chapter, is authorized to do so

and receive related compensation.

     27-79.1-6. Premium tax.

     (a) A travel insurer shall pay a gross premiums tax, as provided in § 44-17-2 on travel

insurance premiums paid by any of the following:

     (1) An individual primary policyholder who is a resident of this state;

     (2) A primary certificate holder who is a resident of this state who elects coverage under

a group travel insurance policy; or

     (3) A blanket travel insurance policyholder that is resident in, or has its principal place of

business or the principal place of an affiliate or subsidiary that has purchased blanket travel

insurance in this state for eligible blanket group members, subject to any apportionment rules

which apply to the insurer across multiple taxing jurisdictions, or that permits the insurer to

allocate premiums on an apportioned basis in a reasonable and equitable manner in those

jurisdictions.

     (b) A travel insurer shall:

     (1) Document the state of residence or principal place of business of the policyholder or

certificate holder, as required in this chapter; and

     (2) Report as premium only the amount allocable to travel insurance, and not any

amounts received for travel assistance services or cancellation fee waivers.

     27-79.1-7. Travel protection plans.

     (a) Travel protection plans may be offered for one price for the combined features that

the travel protection plan offers in this state if:

     (1) The travel protection plan clearly discloses to the consumer at, or prior to the time of

purchase, that it includes travel insurance, travel assistance services, and cancellation fee waivers,

as applicable, and provides information and an opportunity at, or prior to the time of purchase, for

the consumer to obtain additional information regarding the features and pricing of each; and

     (2) The fulfillment materials:

     (i) Describe and delineate the travel insurance, travel assistance services, and cancellation

fee waivers in the travel protection plan; and

     (ii) Include the travel insurance disclosures and the contact information for persons

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providing travel assistance services and cancellation fee waivers, as applicable.

     27-79.1-8. Sales practices.

     (a) All persons offering travel insurance to residents of this state are subject to the unfair

trade practices provided in chapter 29 of title 27, except as otherwise provided in this section. In

the event of a conflict between this chapter, and other provisions of this title regarding the sale

and marketing of travel insurance and travel protection plans, the provisions of this chapter shall

control.

     (b) Offering or selling a travel insurance policy that could never result in the payment of

any claims for any insured under the policy is an unfair trade practice under chapter 29 of title 27.

     (c)(1) All documents provided to consumers prior to the purchase of travel insurance,

including, but not limited to, sales materials, advertising materials, and marketing materials, shall

be consistent with the travel insurance policy itself, including, but not limited to, forms,

endorsements, policies, rate filings, and certificates of insurance.

     (2) For travel insurance policies or certificates that contain pre-existing condition

exclusions, information and an opportunity to learn more about the pre-existing condition

exclusions shall be provided any time prior to the time of purchase, and in the coverage's

fulfillment materials.

     (3) The fulfillment materials and the information described in § 27-79.1-4 shall be

provided to a policyholder or certificate holder as soon as practicable following the purchase of a

travel protection plan. Unless the insured has either started a covered trip or filed a claim under

the travel insurance coverage, a policyholder or certificate holder may cancel a policy or

certificate for a full refund of the travel protection plan price from the date of purchase of a travel

protection plan until at least:

     (i) Fifteen (15) days following the date of delivery of the travel protection plan's

fulfillment materials by postal mail; or

     (ii) Ten (10) days following the date of delivery of the travel protection plan's fulfillment

materials by means other than postal mail. For the purposes of this section, "delivery" means

handing fulfillment materials to the policyholder or certificate holder, or sending fulfillment

materials by postal or electronic mail to the policyholder or certificate holder.

     (4) The company shall disclose in the policy fulfillment and documentation whether the

travel insurance is primary or secondary to other applicable coverage.

     (5) When travel insurance is marketed directly to a consumer through an insurer's website

or by others through an aggregator site, it shall not be an unfair trade practice or other violation of

law where an accurate summary or short description of coverage is provided on the website, so

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long as the consumer has access to the full provisions of the policy through electronic means.

     (d) No person offering travel insurance or travel protection plans on an individual or

group basis may do so by using a negative option or opt out, which would require a consumer to

take an affirmative action to deselect coverage such as unchecking a box on an electronic form

when they purchase a trip.

     (e) It shall be an unfair trade practice to market blanket travel insurance coverage as free.

     (f) When a consumer's destination jurisdiction requires insurance coverage, it shall not be

an unfair trade practice to require that a consumer choose between the following options as a

condition of purchasing a trip or travel package:

     (1) Purchasing the coverage required by the destination jurisdiction through the travel

retailer or limited lines travel insurance producer supplying the trip or travel package; or

     (2) Agreeing to obtain and provide proof of coverage that meets the destination

jurisdiction's requirements prior to departure.

     27-79.1-9. Travel administrators.

     (a) Notwithstanding any other provisions of this title, no person shall act or represent

itself as a travel administrator for travel insurance in this state unless that person:

     (1) Is a licensed property and casualty insurance producer in this state for activities

permitted under that producer license; or

     (2) Holds a valid managing general agent license in this state.

     (b) A travel administrator and its employees are exempt from the licensing requirements

of chapter 10 of title 27 for travel insurance it administers.

     (c) An insurer is responsible for the acts of a travel administrator administering travel

insurance underwritten by the insurer, and is responsible for ensuring that the travel administrator

maintains all books and records relevant to the insurer to be made available by the travel

administrator to the commissioner upon request.

     27-79.1-10. Policy.

     (a) Notwithstanding any other provision of this title, travel insurance shall be classified

and filed for purposes of rates and forms under an inland marine line of 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.

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     (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 the state's underwriting standards for

inland marine.

     27-79.1-11. Responsibility.

     As the insurer designee, the limited lines travel insurance producer is responsible for the

acts of the travel retailer and shall use reasonable means to ensure compliance by the travel

retailer with this chapter.

     27-79.1-12. Enforcement.

     The limited lines travel insurance producer and any travel retailer offering and

disseminating travel insurance under the limited lines travel insurance producer license shall be

subject to the penalties for violations of this chapter pursuant to § 42-14-16.

     27-79.1-13. Regulations.

     The commissioner may promulgate regulations to implement the provisions of this

chapter.

     SECTION 3. This act shall take effect ninety (90) days after passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO INSURANCE -- TRAVEL INSURANCE ACT

***

     This act would create "The Travel Insurance Act" to establish a comprehensive, uniform

regulatory framework to clarify current law applicable to the unique aspects of travel insurance,

while establishing uniform regulation pertaining to travel insurance providers, and by

standardizing protections and requirements, and encouraging fair and effective competition

among market participants.

     This act would take effect ninety (90) days after passage.

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