Pennsylvania Enacts Travel Insurance Legislation Adopting a Variation of the Limited Lines Travel Insurance Model Act
The Pennsylvania General Assembly recently enacted Senate Bill 630 ("Pennsylvania Act" or "Act"),1 making Pennsylvania the most recent of more than 40 states to adopt a version of the National Conference of Insurance Legislators (NCOIL) Limited Lines Travel Insurance Model Act, which governs licensing requirements for Travel Insurance (as defined in the Act). This Act provides requirements not only for those in the travel insurance industry, but all travel industry participants, such as travel agencies, tour operators and cruise lines, that offer travel insurance along with their travel services. The Pennsylvania Act will become effective in 120 days. The full text of the enacted bill is available here.
It is important to note that the Pennsylvania Act contains state-specific differences from the NCOIL Model Act. As a result, travel industry participants should consult counsel to obtain advice regarding state-specific variations.
Under the Pennsylvania Act, travel retailers may offer and disseminate travel insurance in conjunction with the making, arranging, or offering of travel services by operating under the license of a business entity limited lines travel insurance agent, so long as the agent designates one of the agent's employees who is licensed as an insurance agent to be responsible for the business entity's compliance with applicable travel insurance laws. However, the acts that may be performed by a travel retailer under the Pennsylvania Act are limited. Further, the Pennsylvania Act provides additional requirements, such as a training program and specific information and disclosures that must be provided to the consumer.
It is important to note that this legislation impacts the entire travel industry, not just those in the insurance business. All entities and individuals who offer travel insurance along with their travel services and are doing business in Pennsylvania are subject to the Act's licensing and registration requirements. This may include but is not limited to:
- Travel agencies;
- Tour operators;
- Cruise lines;
- Common carriers such as airlines;
- Vacation rental companies;
- Travel and vacation booking businesses; and
- Any other entity in the travel industry that offers travel insurance along with their travel products.
As a result, these entities and individuals should take steps to develop and implement policies and procedures that will comply with the Act.
Frost Brown Todd's Insurance Industry Group was actively involved in the drafting process and adoption of the NCOIL Model Act, and has experience assisting businesses with a variety of compliance services related to the travel industry and both the insurance and non-insurance components of travel protection plans, such as assistance services and contractual waivers, including nationwide licensing, implementation of compliance programs and the training programs that travel insurance producers are required to provide to travel retailers under the Act.
For those businesses that need to understand the impact of the Act or implement compliance solutions, we are also able to provide comprehensive licensing compliance and maintenance services through our Port Compliance Program, which is specifically tailored to the travel industry's unique requirements and designed to fully implement the Limited Lines Travel Insurance Model Act throughout our clients' entire distribution channel and in all jurisdictions.
If you have questions regarding the Act's requirements or implementing a compliant travel insurance program under the new law, please contact Greg Mitchell, Jay Holley or Nikki Parrott with Frost Brown Todd's Insurance Industry Group.
1 Pennsylvania S.B. 630 (May 31, 2018)