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Public Act 102-0212


 

Public Act 0212 102ND GENERAL ASSEMBLY

  
  
  

 


 
Public Act 102-0212
 
SB1588 EnrolledLRB102 13159 BMS 18502 b

    AN ACT concerning regulation.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Illinois Insurance Code is amended by
changing Section 500-10 and by adding Article XLVI as follows:
 
    (215 ILCS 5/500-10)
    (Section scheduled to be repealed on January 1, 2027)
    Sec. 500-10. Definitions. In addition to the definitions
in Section 2 of the Code, the following definitions apply to
this Article:
    "Business entity" means a corporation, association,
partnership, limited liability company, limited liability
partnership, or other legal entity.
    "Car rental limited line licensee" means a person
authorized under the provisions of Section 500-105 to sell
certain coverages relating to the rental of vehicles.
    "Home state" means the District of Columbia and any state
or territory of the United States in which an insurance
producer maintains his or her principal place of residence or
principal place of business and is licensed to act as an
insurance producer.
    "Insurance" means any of the lines of authority in Section
500-35, any health care plan under the Health Maintenance
Organization Act, or any limited health care plan under the
Limited Health Service Organization Act.
    "Insurance producer" means a person required to be
licensed under the laws of this State to sell, solicit, or
negotiate insurance.
    "Insurer" means a company as defined in subsection (e) of
Section 2 of this Code, a health maintenance organization as
defined in the Health Maintenance Organization Act, or a
limited health service organization as defined in the Limited
Health Service Organization Act.
    "License" means a document issued by the Director
authorizing an individual to act as an insurance producer for
the lines of authority specified in the document or
authorizing a business entity to act as an insurance producer.
The license itself does not create any authority, actual,
apparent, or inherent, in the holder to represent or commit an
insurance carrier.
    "Limited lines insurance" means those lines of insurance
defined in Section 500-100 or any other line of insurance that
the Director may deem it necessary to recognize for the
purposes of complying with subsection (e) of Section 500-40.
    "Limited lines producer" means a person authorized by the
Director to sell, solicit, or negotiate limited lines
insurance.
    "Negotiate" means the act of conferring directly with or
offering advice directly to a purchaser or prospective
purchaser of a particular contract of insurance concerning any
of the substantive benefits, terms, or conditions of the
contract, provided that the person engaged in that act either
sells insurance or obtains insurance from insurers for
purchasers.
    "Person" means an individual or a business entity.
    "Rental agreement" means a written agreement setting forth
the terms and conditions governing the use of a vehicle
provided by a rental company for rental or lease.
    "Rental company" means a person, or a franchisee of the
person, in the business of providing primarily private
passenger vehicles to the public under a rental agreement for
a period not to exceed 30 days.
    "Rental period" means the term of the rental agreement.
    "Renter" means a person obtaining the use of a vehicle
from a rental company under the terms of a rental agreement for
a period not to exceed 30 days.
    "Self-service storage facility limited line licensee"
means a person authorized under the provisions of Section
500-107 to sell certain coverages relating to the rental of
self-service storage facilities.
    "Sell" means to exchange a contract of insurance by any
means, for money or its equivalent, on behalf of an insurance
company.
    "Solicit" means attempting to sell insurance or asking or
urging a person to apply for a particular kind of insurance
from a particular company.
    "Terminate" means the cancellation of the relationship
between an insurance producer and the insurer or the
termination of a producer's authority to transact insurance.
    "Travel insurance" has the meaning provided in Section
1630 means insurance coverage for personal risks incident to
planned travel, including, but not limited to: (1) the
interruption or cancellation of a trip or event, (2) the loss
of baggage or personal effects, (3) damages to accommodations
or rental vehicles, or (4) sickness, accident, disability, or
death occurring during travel. "Travel insurance" does not
include major medical plans that provide comprehensive medical
protection for travelers with trips lasting 6 months or
longer, including those working overseas as an ex-patriot or
as military personnel on deployment.
    "Uniform Business Entity Application" means the current
version of the National Association of Insurance
Commissioners' Uniform Business Entity Application for
nonresident business entities.
    "Uniform Application" means the current version of the
National Association of Insurance Commissioners' Uniform
Application for nonresident producer licensing.
    "Vehicle" or "rental vehicle" means a motor vehicle of (1)
the private passenger type, including passenger vans, mini
vans, and sport utility vehicles or (2) the cargo type,
including cargo vans, pickup trucks, and trucks with a gross
vehicle weight of less than 26,000 pounds the operation of
which does not require the operator to possess a commercial
driver's license.
    "Webinar" means an online educational presentation during
which a live and participating instructor and participating
viewers, whose attendance is periodically verified throughout
the presentation, actively engage in discussion and in the
submission and answering of questions.
(Source: P.A. 97-113, eff. 7-14-11; 98-1165, eff. 6-1-15.)
 
    (215 ILCS 5/Art. XLVI heading new)
ARTICLE XLVI. TRAVEL INSURANCE

 
    (215 ILCS 5/1620 new)
    Sec. 1620. Short title. This Article may be cited as the
Travel Insurance Act.
 
    (215 ILCS 5/1625 new)
    Sec. 1625. Scope and purposes.
    (a) The purpose of this Article is to promote the public
welfare by creating a comprehensive legal framework within
which travel insurance may be sold in this State.
    (b) This Article applies to travel insurance that covers
any resident of this State, and is sold, solicited,
negotiated, or offered in this State, and policies and
certificates that are delivered or issued for delivery in this
State. This Article does not apply to cancellation fee waivers
or travel assistance services except as expressly provided in
this Article.
    (c) All other applicable provisions of this State's
insurance laws shall continue to apply to travel insurance,
except that the specific provisions of this Article shall
supersede any general provisions of law that would otherwise
be applicable to travel insurance.
 
    (215 ILCS 5/1630 new)
    Sec. 1630. Definitions. As used in this Article:
    "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.
    "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.
    "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.
    "Eligible group", solely for the purposes of travel
insurance, means 2 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, any
of the following:
        (1) 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 such travel;
        (2) any college, school, or other institution of
    learning covering students, teachers, employees, or
    volunteers;
        (3) any employer covering any group of employees,
    volunteers, contractors, board of directors, dependents,
    or guests;
        (4) any sports team, camp, or sponsor of any sports
    team or camp covering participants, members, campers,
    employees, officials, supervisors, or volunteers;
        (5) any religious, charitable, recreational,
    educational, or civic organization, or branch of an
    organization covering any group of members, participants,
    or volunteers;
        (6) 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 account holders,
    credit card holders, debtors, guarantors, or purchasers;
        (7) 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;
        (8) 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 Director's
    permitting the use of a trust and the State's premium tax
    provisions, of one or more associations meeting the
    requirements of paragraph (7) of this definition;
        (9) any entertainment production company covering any
    group of participants, volunteers, audience members,
    contestants, or workers;
        (10) any volunteer fire department, ambulance, rescue,
    police, court, or any first aid, civil defense, or other
    such volunteer group;
        (11) preschools, day care institutions for children or
    adults, and senior citizen clubs;
        (12) any 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, 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
        (13) 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.
    "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.
    "Group travel insurance" means travel insurance issued to
any eligible group.
    "Limited lines travel insurance producer" means one of the
following:
        (1) a licensed managing general agent or third-party
    administrator;
        (2) a licensed insurance producer, including a limited
    lines producer; or
        (3) a travel administrator.
    "Offering and disseminating" means the following:
        (1) Providing information to a prospective or current
    policyholder on behalf of a limited lines travel insurance
    entity, including brochures, buyer guides, descriptions of
    coverage, and price.
        (2) Referring specific questions regarding coverage
    features and benefits from a prospective or current
    policyholder to a limited lines travel insurance entity.
        (3) Disseminating and processing applications for
    coverage, coverage selection forms, or other similar forms
    in response to a request from a prospective or current
    policyholder.
        (4) Collecting premiums from a prospective or current
    policyholder on behalf of a limited lines travel insurance
    entity.
        (5) Receiving and recording information from a
    policyholder to share with a limited lines travel
    insurance entity.
    "Primary policyholder" means an individual person who
elects and purchases individual travel insurance.
    "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 the person to
be considered a travel administrator are among the following:
        (1) 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;
        (2) an insurance producer selling insurance or engaged
    in administrative and claims-related activities within the
    scope of the producer's license;
        (3) a travel retailer offering and disseminating
    travel insurance and registered under the license of a
    limited lines travel insurance producer in accordance with
    Section 1635;
        (4) 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 connection with insurance coverage; or
        (5) 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.
    "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 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 are not related to
insurance.
    "Travel insurance" means insurance coverage for personal
risks incident to planned travel, including, but not limited
to:
        (1) the interruption or cancellation of a trip or
    event;
        (2) the loss of baggage or personal effects;
        (3) damages to accommodations or rental vehicles;
        (4) sickness, accident, disability, or death occurring
    during travel;
        (5) emergency evacuation;
        (6) repatriation of remains; or
        (7) 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 6 months or longer, including those working
overseas as expatriates or as military personnel on
deployment.
    "Travel insurance business entity" means a licensed
insurance producer designated by an insurer as set forth in
subsection (h) of Section 1635.
    "Travel protection plans" means plans that provide one or
more of the following: travel insurance, travel assistance
services, and cancellation fee waivers.
    "Travel retailer" means a business organization that
makes, arranges, or offers travel services and, with respect
to travel insurance, is limited to offering and disseminating
as defined in this Section, unless otherwise licensed under
subsection (b) of Section 1635.
 
    (215 ILCS 5/1635 new)
    Sec. 1635. Licensing and registration.
    (a) The Director may issue to a travel insurance business
entity that registers travel retailers under its license as
described in paragraph (2) of subsection (c) of this Section a
producer license as provided in paragraph (6) of subsection
(a) of Section 500-35 of this Code. A travel insurance
business entity license issued under this Section shall also
authorize any employee of the travel insurance business entity
to act individually on behalf and under the supervision of the
travel insurance business entity licensee with respect to the
coverage specified in this Section. Each travel insurance
business entity licensed under this Section shall pay the
Department a fee of $500 for its initial license and $500 for
each renewal license, payable on May 31 annually.
    (b) The Director may issue to a travel retailer a limited
lines producer license. A travel retailer license issued under
this Section shall also authorize any employee of the travel
retailer limited line licensee to act individually on behalf
and under the supervision of the travel retailer limited line
licensee with respect to the coverage specified in this
Section.
    (c) Notwithstanding any other provision of law, a travel
retailer may do the limited activities of offering and
disseminating travel insurance on behalf of and under the
license of a supervising travel insurance business entity if
the following conditions are met:
        (1) the travel insurance business entity or travel
    retailer provides to purchasers of travel insurance:
            (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 travel insurance business entity;
        (2) at the time of licensure, the travel insurance
    business entity shall establish and maintain a register on
    a form prescribed by the Director of each travel retailer
    that offers travel insurance on the travel insurance
    business entity's behalf; the register shall be maintained
    and updated continuously by the travel insurance business
    entity 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 travel insurance business
    entity shall submit the register to the Director annually
    on a form and in a manner approved by the Director; the
    limited lines producer shall also certify that the travel
    retailer personnel who are offering and disseminating
    insurance under the travel retailer's registration
    complies with 18 U.S.C. 1033;
        (3) the travel insurance business entity has
    designated one of its employees as a licensed individual
    producer (a designated responsible producer or DRP)
    responsible for the travel insurance business entity's and
    its travel retailer's compliance with the travel insurance
    laws, rules, and regulations of this State;
        (4) the travel insurance business entity has paid all
    applicable insurance producer licensing fees as set forth
    in this Code; and
        (5) the travel insurance business entity requires 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 that shall be subject to review by the Director;
    the training material shall, at a minimum, contain
    instructions on the types of insurance offered, ethical
    sales practices, and required disclosures to prospective
    customers.
    (d) 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 travel insurance business entity;
        (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 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.
    (e) A travel retailer's 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 himself, herself, or itself out as a licensed
    insurer, licensed producer, or insurance expert.
    (f) A travel retailer whose insurance-related activities,
and those of its employees and authorized representatives, are
limited to offering and disseminating travel insurance on
behalf of and under the direction of a travel insurance
business entity meeting the conditions stated in this Section
is authorized to do so and receive related compensation upon
registration by the travel insurance business entity as
described in paragraph (2) of subsection (c) of this Section.
    (g) Travel insurance may be provided under an individual
policy or under a group, blanket, or master policy.
    (h) As the insurer designee, the travel insurance business
entity is responsible for the acts of the travel retailer that
is registered under its license.
    (i) Any entity that violates any provision of this Article
shall be subject to all appropriate regulatory action as set
forth in this Code.
    (j) 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 travel insurance.
 
    (215 ILCS 5/1640 new)
    Sec. 1640. Travel protection plans. 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 before 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 before the time of
    purchase, for the consumer to obtain additional
    information regarding the features and pricing of each;
    and
        (2) the fulfillment materials:
            (A) describe and delineate the travel insurance,
        travel assistance services, and cancellation fee
        waivers in the travel protection plan; and
            (B) include the travel insurance disclosures and
        the contact information for persons providing travel
        assistance services, and cancellation fee waivers, as
        applicable.
 
    (215 ILCS 5/1645 new)
    Sec. 1645. Sales practices.
    (a) All persons offering travel insurance to residents of
this State are subject to the Unfair Methods of Competition
and Unfair and Deceptive Acts and Practices Article of this
Code, except as otherwise provided in this Section. In the
event of a conflict between this Article and other provisions
of this Code regarding the sale and marketing of travel
insurance and travel protection plans, the provisions of this
Article shall control.
    (b) Offering or selling a travel insurance policy that
could never result in payment of any claims for any insured
under the policy is an unfair trade practice under Section
424.
    (c) Marketing of travel insurance policies shall comply
with the following:
        (1) All documents provided to consumers before 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 preexisting condition exclusions, information and
    an opportunity to learn more about the preexisting
    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 subparagraphs (A) through (D) of paragraph
    (1) of subsection (c) of Section 1635 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:
            (A) 15 days following the date of delivery of the
        travel protection plan's fulfillment materials by
        postal mail; or
            (B) 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 mail or electronic
        means to the policyholder or certificate holder.
        (4) The company shall disclose in the policy
    documentation and fulfillment materials whether the travel
    insurance is primary or secondary to other applicable
    coverage.
        (5) Where 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 web page, so long as the consumer has access to the
    full provisions of the policy through electronic means.
    (d) No person offering, soliciting, or negotiating travel
insurance or travel protection plans on an individual or group
basis may do so by using 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 the consumer purchases a trip.
    (e) It shall be an unfair trade practice under Section 424
to market blanket travel insurance coverage as free.
    (f) Where 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
    before departure.
 
    (215 ILCS 5/1650 new)
    Sec. 1650. Travel insurance administrators.
    (a) Notwithstanding any other provisions of this Code, no
entity shall act or represent itself as a travel administrator
for travel insurance in this State unless that entity:
        (1) is a licensed property and casualty insurance
    producer in this State for activities permitted under that
    producer license;
        (2) holds a valid managing general agent license in
    this State; or
        (3) holds a valid third-party administrator license in
    this State.
    (b) 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 Director upon request.
 
    (215 ILCS 5/1655 new)
    Sec. 1655. Policy.
    (a) Notwithstanding any other provision of this Code,
travel insurance shall be classified and filed for purposes of
rates and forms under an inland marine line of insurance,
including 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.
    (b) Travel insurance may be in the form of an individual,
group, master, 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.
 
    (215 ILCS 5/1660 new)
    Sec. 1660. Rules. The Department may adopt rules to
implement this Article.
 
    (215 ILCS 5/500-108 rep.)
    Section 10. The Illinois Insurance Code is amended by
repealing Section 500-108.
 
    Section 99. Effective date. This Act takes effect 90 days
after becoming law.

Effective Date: 10/28/2021