SENATE BILL 168

57th legislature - STATE OF NEW MEXICO - first session, 2025

INTRODUCED BY

William E. Sharer

AN ACT

RELATING TO TRAVEL INSURANCE; ENACTING THE TRAVEL INSURANCE ACT; REPEALING AND ENACTING SECTIONS OF THE NMSA 1978.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. A new section of the New Mexico Insurance Code is enacted to read:

     "[NEW MATERIAL] SHORT TITLE.--Sections 1 through 10 of this act may be cited as the "Travel Insurance Act"."

     SECTION 2. A new section of the New Mexico Insurance Code is enacted to read:

     "[NEW MATERIAL] SCOPE.--

          A. The requirements of the Travel Insurance Act shall apply to:

                (1) travel insurance that covers any resident of this state and is sold, solicited, negotiated or offered in this state; and

                (2) policies and certificates that are delivered or issued for delivery in this state.

          B. The requirements of the Travel Insurance Act shall not apply to cancellation fee waivers or travel assistance services, except as expressly provided herein.

          C. All other applicable provisions of the New Mexico Insurance Code shall continue to apply to travel insurance, except that the specific provisions of the Travel Insurance Act shall supersede any general provisions of law that would otherwise be applicable to travel insurance."

     SECTION 3. A new section of the New Mexico Insurance Code is enacted to read:

     "[NEW MATERIAL] DEFINITIONS.--As used in the Travel Insurance Act:

          A. "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;

          B. "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;

          C. "cancellation fee waiver" means a contractual agreement between a supplier of travel services and the supplier's 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;

          D. "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:

                (1) any entity engaged in the business of providing travel or travel services, including:

                     (a) tour operators;

                     (b) lodging providers, vacation property owners, hotels or resorts;

                     (c) travel clubs or travel agencies;

                     (d) property managers;

                     (e) cultural exchange programs; or

                     (f) common carriers or operators, owners or lessors of a means of transportation of passengers, including airlines, cruise lines, railroads, steamship companies and public bus carriers, when all members or customers of the group have a common exposure to risk attendant to their 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 thereof, covering participants, members, campers, employees, officials, supervisors or volunteers;

                (5) any religious, charitable, recreational, educational or civic organization or branch thereof, 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 a financial institution or financial institution vendor, 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 superintendent's permitting the use of a trust and the state's premium tax provisions pursuant to Section 5 of the Travel Insurance Act in one or more associations meeting the requirements of Paragraph (7) of this subsection;

                (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, daycare institutions for children or adults or 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 regarding the rented or leased vehicles where the truck rental or leasing company is the policyholder under a policy to which this section applies; or

                (13) any other group of which the superintendent has determined that the members are engaged in a common enterprise and have an economic, educational or social affinity or relationship and that issuance of the policy would not be contrary to the public interest;

          E. "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;

          F. "group travel insurance" means travel insurance issued to any eligible group;

          G. "limited lines travel insurance producer" means a licensed managing general agent or third-party administrator or licensed insurance producer, including a limited lines producer or travel administrator;

          H. "offer and disseminate" means providing general information, including a description of coverage and price, processing applications or collecting premiums;

          I. "primary certificate holder" means an individual who elects and purchases travel insurance under a group policy pursuant to Section 5 of the Travel Insurance Act;

          J. "primary policyholder" means an individual person who elects and purchases individual travel insurance pursuant to Section 5 of the Travel Insurance Act;

          K. "superintendent" means the superintendent of insurance;

          L. "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 include:

                (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 the Travel Insurance Act;

                (4) a person adjusting or settling claims in the normal course of that person'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;

          M. "travel assistance services" means services for which the consumer is not indemnified based on a fortuitous event; and where providing the service does not result in the transfer or shifting of risk that would constitute the business of insurance, including:

                (1) security advisories;

                (2) destination information;

                (3) vaccination and immunization information services;

                (4) travel reservation services;

                (5) entertainment;

                (6) activity and event planning;

                (7) translation assistance;

                (8) emergency messaging;

                (9) international legal and medical referrals;

                (10) medical case monitoring;

                (11) coordination of transportation arrangements;

                (12) emergency cash transfer assistance;

                (13) medical prescription replacement assistance;

                (14) passport and travel document replacement assistance;

                (15) lost luggage assistance;

                (16) concierge services; or

                (17) any other service that is furnished in connection with planned travel. Travel assistance services are not insurance and not related to insurance;

          N. "travel insurance" means insurance coverage for personal risks incident to planned travel, including:

                (1) interruption or cancellation of a trip or an event;

                (2) 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 superintendent; and does not include major medical plans that provide comprehensive medical protection for travelers with trips lasting longer than six months, including expatriates living or working abroad, or any other product that requires a specific insurance producer license;

          O. "travel protection plans" means plans that provide one or more of the following:

                (1) travel insurance;

                (2) travel assistance services; and

                (3) cancellation fee waivers; and

          P. "travel retailer" means an entity that makes, arranges or offers planned travel 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."

     SECTION 4. A new section of the New Mexico Insurance Code is enacted to read:

     "[NEW MATERIAL] LICENSING AND REGISTRATION.--

          A. The superintendent shall issue a limited lines travel insurance producer license to an individual or a business entity that has filed with the superintendent an application for a limited lines travel insurance producer license in a form and manner prescribed by the superintendent. A limited lines travel insurance producer shall be licensed to sell, solicit or negotiate travel insurance through a licensed insurer. No person shall act as a limited lines travel insurance producer or travel insurance retailer unless properly licensed or registered, respectively.

          B. A travel retailer shall offer and disseminate travel insurance under a limited lines travel insurance producer business entity license if the following conditions are met:

                (1) the limited lines travel insurance producer or travel retailer provides to purchasers of travel insurance the following:

                     (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 limited lines travel insurance producer;

                (2) the limited lines travel insurance producer establishes, maintains and updates a register, on a form prescribed by the superintendent, of each travel retailer that offers travel insurance on the limited lines travel insurance producer's behalf, including:

                     (a) the name of the travel retailer;

                     (b) the address and contact information of the travel retailer and an officer or a person who directs or controls the travel retailer's operations; and

                     (c) the travel retailer's federal tax identification number;

                (3) the limited lines travel insurance producer submits such register to the superintendent upon reasonable request;

                (4) the limited lines travel insurance producer certifies that the travel retailer's registration complies with 18 U.S.C. Section 1033;

                (5) the limited lines travel insurance producer has designated one of the limited lines travel insurance producer's employees, who is a licensed individual producer, as the person responsible for compliance with the travel insurance laws, rules and regulations applicable to the limited lines travel insurance producer and its registrants, as a designated responsible producer; and the designated responsible person, president, secretary, treasurer or any other officer or person who directs or controls the limited lines travel insurance producer's insurance operations complies with the fingerprinting requirements applicable to insurance producers in the resident state of the limited lines travel insurance producer;

                (6) the limited lines travel insurance producer has paid all applicable licensing fees as set forth in applicable state law; and

                (7) 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 is subject, at the discretion of the superintendent, to review and approval; and that the training material contains adequate instructions on the types of insurance offered, ethical sales practices and required disclosures to prospective customers.

          C. The grounds for the suspension, revocation and penalties applicable to resident insurance producers under the New Mexico Insurance Code shall be applicable to the limited lines travel insurance producers and travel retailers.

          D. 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:

                (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 evaluate the adequacy of the customer's existing insurance coverage.

          E. A travel retailer, employee or authorized representative who is not licensed as an insurance producer shall 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 itself out as a licensed insurer, licensed producer or insurance expert.

          F. As the insurer's designee, the limited lines travel insurance producer shall be responsible for the acts of the travel retailer and use reasonable means to ensure compliance by the travel retailer with the Travel Insurance Act.

          G. Notwithstanding any other provision in law, 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 the Travel Insurance Act, is authorized to receive related compensation, upon registration by the limited lines travel insurance producer as described in Paragraph (2) of Subsection B of this section.

          H. Any person licensed in a major line of authority as an insurance producer is authorized to sell, solicit and negotiate travel insurance.

          I. A property and casualty insurance producer is not required to become appointed by an insurer in order to sell, solicit or negotiate travel insurance."

     SECTION 5. A new section of the New Mexico Insurance Code is enacted to read:

     "[NEW MATERIAL] PREMIUM TAX.--

          A. A travel insurer shall pay premium tax as provided in the Insurance Premium Tax Act 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 and 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 group members, subject to any apportionment rules which 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."

     SECTION 6. A new section of the New Mexico Insurance Code is enacted to read:

     "[NEW MATERIAL] TRAVEL PROTECTION PLANS.--Travel protection plans shall be offered for one price for the combined features that the travel protection plan offers in this state if:

          A. the travel protection plan:

                (1) 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

                (2) 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

          B. the fulfillment materials:

                (1) describe and delineate the travel insurance, travel assistance services and cancellation fee waivers in the travel protection plan; and

                (2) include the travel insurance disclosures and contact information for persons providing travel assistance services and cancellation fee waivers, as applicable."

     SECTION 7. A new section of the New Mexico Insurance Code is enacted to read:

     "[NEW MATERIAL] SALES PRACTICES.--

          A. All persons offering travel insurance to residents of this state are subject to Chapter 59A, Article 16 NMSA 1978 except as otherwise provided in this section. In the event of a conflict between the Travel Insurance Act and other provisions of the New Mexico Insurance Code regarding the sale and marketing of travel insurance and travel protection plans, the provisions of the Travel Insurance Act 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.

          C. 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.

          D. 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.

          E. The fulfillment materials and the information described in Subparagraphs (a) through (d) of Paragraph (1) of Subsection B of Section 4 of the Travel Insurance Act 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 fifteen days following the date of delivery of the travel protection plan's fulfillment materials by postal mail; or ten 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 subsection, "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.

          F. The company shall disclose in the policy documentation and fulfillment materials whether the travel insurance is primary or secondary to other applicable coverage.

          G. 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 if an accurate summary or short description of coverage is provided on the web page, provided that the consumer has access to the full provisions of the policy through electronic means.

          H. No person offering, soliciting or negotiating 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 the consumer purchases a trip.

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

          J. If 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."

     SECTION 8. A new section of the New Mexico Insurance Code is enacted to read:

     "[NEW MATERIAL] TRAVEL ADMINISTRATION.--

          A. Notwithstanding any other provisions of the New Mexico Insurance Code, 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;

                (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 Chapter 59A, Article 13 NMSA 1978 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 superintendent upon request."

     SECTION 9. A new section of the New Mexico Insurance Code is enacted to read:

     "[NEW MATERIAL] POLICY.--

          A. Notwithstanding any other provision of the New Mexico Insurance Code, travel insurance shall be classified and filed for purposes of rates and forms under an inland marine line of insurance; provided 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, shall be filed 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.

          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 that those standards also meet the state's underwriting standards for inland marine."

     SECTION 10. A new section of the New Mexico Insurance Code is enacted to read:

     "[NEW MATERIAL] REGULATIONS.--The superintendent may promulgate regulations to implement the provisions of the Travel Insurance Act."

     SECTION 11. REPEAL.--Section 59A-12-18.1 NMSA 1978 (being Laws 2013, Chapter 140, Section 3, as amended) is repealed.

     SECTION 12. EFFECTIVE DATE.--The Travel Insurance Act shall take effect ninety days after enactment."

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