The Vermont Statutes Online

Title 8: Banking and Insurance

Chapter 148: Travel Insurance

• § 7122. Scope and purpose

  (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 Vermont.

  (b) The requirements of this chapter apply to travel insurance that covers any resident of this State, and is sold, solicited, negotiated, or offered in this State, and the policies and certificates of which are delivered or issued for delivery in this State. It shall not apply to cancellation fee waivers or travel assistance services, except as expressly provided in this chapter.

  (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 chapter shall supersede any general provisions of law that would otherwise be applicable to travel insurance. (Added 2021, No. 139 (Adj. Sess.), § 10, eff. August 25, 2022.)

• § 7123. Definitions

  As used in this chapter:

  (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 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.

  (4) “Eligible group” means two or more persons who are engaged in a common enterprise, or have an economic, educational, or social affinity or relationship, including any of the following:

  (A) any entity engaged in the business of providing travel or travel services, including a tour operator, lodging provider, vacation property owner, hotel or resort, travel club, travel agency, property manager, cultural exchange program, or common carrier, or the operator, owner, or lessor of a means of transportation of passengers, including to an airline, cruise line, railroad, steamship company, or public bus carrier, wherein with regard to any particular travel or type of travel or travelers, all members or customers of the group have a common exposure to risk attendant to such travel;

  (B) any college, school, or other institution of learning, covering students, teachers, employees, or volunteers;

  (C) any employer covering any group of employees, volunteers, contractors, board of directors, dependents, or guests;

  (D) any sports team, camp, or sponsor thereof, covering participants, members, campers, employees, officials, supervisors, or volunteers;

  (E) any religious, charitable, recreational, educational, or civic organization, or branch thereof, covering any group of members, participants, or volunteers;

  (F) 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;

  (G) any incorporated or unincorporated association, including a labor union, 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;

  (H) 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 Commissioner’s permitting the use of a trust and the State’s premium tax provisions in section 7125 of this chapter, of one or more associations meeting the requirements of subdivision (4)(G) of this section;

  (I) any entertainment production company covering any group of participants, volunteers, audience members, contestants, or workers;

  (J) any volunteer fire department, ambulance, rescue, police, court, or any first aid, civil defense, or other such volunteer group;

  (K) any preschool, daycare institution for children or adults, or senior citizen club;

  (L) 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, provided that 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

  (M) 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 a:

  (A) licensed managing general agent or third-party administrator;

  (B) licensed insurance producer, including a limited lines producer, designated by an insurer as the travel insurance supervising entity as set forth in subsection 7124(f) of this title; or

  (C) travel administrator.

  (8) “Offer and disseminate” means to provide general information, including a description of the coverage and price, as well as to process the application and collect 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:

  (A) 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;

  (B) an insurance producer selling insurance or engaged in administrative and claims-related activities within the scope of the producer’s license;

  (C) 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;

  (D) 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

  (E) 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 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 the provision of security advisories; destination information; vaccination and immunization information services; travel reservation services; entertainment, activity, or 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; or concierge services. Travel assistance services are not insurance and not related to insurance.

  (13)(A) “Travel insurance” means insurance coverage for personal risks incident to planned travel, including:

  (i) interruption or cancellation of a 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.

  (B) Travel insurance does not include major medical plans that provide comprehensive medical protection for travelers with trips lasting six months or longer, including, for example, those working overseas as expatriates, or any other product that requires a specific insurance producer license.

  (14) “Travel protection plan” means a plan that provides one or more of the following: travel insurance, travel assistance services, or cancellation fee waivers.

  (15) “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. (Added 2021, No. 139 (Adj. Sess.), § 10, eff. August 25, 2022.)

• § 7124. Licensing and registration

  (a) The Commissioner may issue to an individual or a business entity that has complied with the requirements of this chapter and filed an application for such 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. A person may not act as a limited lines travel insurance producer or travel retailer unless properly licensed or registered, respectively.

  (b) A travel retailer may offer and disseminate travel insurance under a limited lines travel insurance producer license only if the following conditions are met:

  (1) The limited lines travel insurance producer 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 at the time of purchase;

  (B) a description of the process for filing a claim;

  (C) a description of the review and cancellation process for the travel insurance policy; and

  (D) 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 has established and maintains 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 annually 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 such register within 30 days of request by the Commissioner. 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 and revocation and the penalties applicable to resident insurance producers under 8 V.S.A. § 4804 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 responsible for the limited lines travel insurance producer’s compliance with the travel insurance laws, rules, and regulations of the State. This person shall be identified as the Designated Responsible Licensed Producer (DRLP).

  (4) The DRLP, president, secretary, treasurer, and any other officer or person who directs or controls the limited lines travel insurance producer’s insurance operations has complied 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 insurance producer licensing fees as set forth in section 4800 of this title.

  (6) The limited lines travel insurance producer 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, 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.

  (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 that, 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 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’s employee or authorized representative who is not licensed as an insurance producer may not:

  (1) evaluate or interpret the technical terms, benefits, or conditions of the offered travel insurance coverage;

  (2) evaluate or provide advice concerning a prospective purchaser’s existing insurance coverage; or

  (3) hold themself out as a licensed insurer, licensed producer, or insurance expert.

  (e) 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 limited lines travel insurance producer meeting the conditions stated in this section is authorized to do so and receive related compensation for such services, upon registration by the limited lines travel insurance producer as described in subdivision (b)(2) of this section.

  (f) As the insurer’s designee, a limited lines travel insurance producer is responsible for the acts of each of its registered travel retailers related to the offer and dissemination of travel insurance and shall use reasonable means to ensure the travel retailer’s compliance with this chapter.

  (g) 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.

  (h) The limited lines travel insurance producer and any travel retailer offering and disseminating travel insurance under a limited lines travel insurance producer license shall be subject to the provisions of sections 13 and 4804 and chapter 129 of this title. (Added 2021, No. 139 (Adj. Sess.), § 10, eff. August 25, 2022.)

• § 7125. Premium tax

  (a) A travel insurer shall pay premium tax, as provided in 32 V.S.A. § 8551, on travel insurance premiums paid by any of the following:

  (1) a 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 a resident in or has its principal place of business or the principal place of business of an affiliate or subsidiary that has purchased blanket travel insurance in this State for eligible blanket travel insurance group members, subject to any apportionment rules that apply to the insurer across multiple taxing jurisdictions or that permit the insurer to allocate premium 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 subsection (a) of this section; 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. (Added 2021, No. 139 (Adj. Sess.), § 10, eff. August 25, 2022.)

• § 7126. Travel protection plans

  A travel protection plan 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, or 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;

  (2) the person offering the travel protection plan that includes a travel insurance policy complies with section 7127 of this title; and

  (3) 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. (Added 2021, No. 139 (Adj. Sess.), § 10, eff. August 25, 2022.)

• § 7127. Sales practices

  (a) All persons offering travel insurance to residents of this State are subject to chapter 129 of this title, 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 payment of any claims for any insured under the policy is an unfair trade practice under chapter 129 of this title.

  (c)(1) All documents provided to consumers prior to the purchase of travel insurance, including sales materials, advertising materials, and marketing materials, shall be consistent with the travel insurance policy itself, including forms, endorsements, policies, rate filings, and certificates of insurance.

  (2) For a travel insurance policy or certificate that contains preexisting condition exclusions:

  (A) information and an opportunity to learn more about the preexisting condition exclusions shall be provided prior to the time of purchase and in the coverage’s fulfillment materials; and

  (B) the policy or certificate may only exclude preexisting conditions for which medical advice or treatment was recommended by or received from a health care provider within a six-month period preceding the effective date of coverage.

  (3)(A) The fulfillment materials and the information described in subdivisions 7124(b)(1)(B)–(D) of this title 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) 15 days following the date of delivery of the travel protection plan’s fulfillment materials by U.S. mail; or

  (ii) 10 days following the date of delivery of the travel protection plan’s fulfillment materials by means other than U.S. mail.

  (B) As used in this subdivision (3), “delivery” means handing fulfillment materials to the policyholder or certificate holder or sending fulfillment materials by U.S. mail or electronic means to the policyholder or certificate holder.

  (4) A travel insurer 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, provided the consumer has access to the full provisions of the policy through electronic means.

  (d) A person offering, soliciting, or negotiating travel insurance or travel protection plans on an individual or group basis may not do so by using negative option or opt out, which would require a consumer to take an affirmative action to deselect coverage, such as by unchecking a box on an electronic form, when the consumer purchases a trip.

  (e) Marketing blanket travel insurance coverage as free is an unfair trade practice under chapter 129 of this title.

  (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 prior to departure.

  (g) For any travel insurance policy or certificate that provides coverage for sickness, sickness shall include any mental disorder as defined by the American Psychiatric Association DSM-5, or its current equivalent that is diagnosed or treated by a properly qualified medical professional. (Added 2021, No. 139 (Adj. Sess.), § 10, eff. August 25, 2022.)

• § 7128. Travel administrators

  (a) A person shall not act or represent themself 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;

  (2) holds a valid managing general agent license in this State; or

  (3) holds a valid third-party administrator license in this State.

  (b) A travel administrator and its employees are exempt from the licensing requirements of section 4803 of this title 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. (Added 2021, No. 139 (Adj. Sess.), § 10, eff. August 25, 2022.)

• § 7129. Policy

  (a) Notwithstanding any other provision of this title to the contrary, 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 such as emergency evacuation or repatriation of remains, or incidental limited property and casualty benefits such as baggage or trip cancellation, may be filed under either an accident and health line of insurance or an inland marine line of insurance.

  (b) Travel insurance may be provided under an individual, group, 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 the State’s underwriting standards for inland marine. (Added 2021, No. 139 (Adj. Sess.), § 10, eff. August 25, 2022.)

• § 7130. Rulemaking authority

  The Commissioner may adopt rules to implement the provisions of this chapter. (Added 2021, No. 139 (Adj. Sess.), § 10, eff. August 25, 2022.)