SB0168CTS

SENATE TAX, BUSINESS AND TRANSPORTATION

COMMITTEE SUBSTITUTE FOR

SENATE BILL 168

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

AN ACT

RELATING TO TRAVEL INSURANCE; RECOMPILING A SECTION OF THE NMSA 1978; ENACTING THE TRAVEL INSURANCE ACT; PROHIBITING CERTAIN TRAVEL INSURANCE PRACTICES.

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 9 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] 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 an 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 that 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:

(a) tour operator;

(b) lodging provider, vacation property owner, hotel or resort;

(d) property manager;

(e) cultural exchange program; or

(f) common carrier or operator, owner or lessor of a means of transportation of passengers, including an airline, a cruise line, a railroad, a steamship company or a public bus carrier, 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 a 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 a 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 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 the association's 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;

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

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

(11) a preschool, a daycare institution for children or adults or a senior citizen club;

(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. "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;

G. "travel administrator" means a person that directly or indirectly underwrites or collects charges, collateral or premiums from or adjusts or settles claims on residents of this state in connection with travel insurance; provided 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;

H. "travel assistance service" means a service for which the consumer is not indemnified based on a fortuitous event and that 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 service" is not insurance and is not related to insurance;

I. "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. "Travel insurance" does not include a major medical plan that provides 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;

J. "travel protection plan" means a plan that provides one or more of the following:

(1) travel insurance;

(2) travel assistance services; or

(3) cancellation fee waivers; and

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

SECTION 3. Section 59A-12-18.1 NMSA 1978 (being Laws 2013, Chapter 140, Section 3, as amended) is recompiled in the Travel Insurance Act and is amended to read:

"LIMITED LINES TRAVEL INSURANCE PRODUCER LICENSE.--

A. The superintendent may issue a limited lines travel insurance producer license to [applicants] an applicant who [are] is qualified to solicit or sell travel insurance.

B. A travel retailer may offer travel insurance under the license of a limited lines travel insurance producer only if:

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

(a) a description of the material terms of the insurance coverage;

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

(d) the identity and contact information of the insurer and limited lines travel insurance producer;

(2) the limited lines travel insurance producer:

(a) establishes at the time of licensure on a form prescribed by the superintendent a register of each travel retailer that offers travel insurance on behalf of the limited lines travel insurance producer;

(b) includes in the register each travel retailer's federal tax identification number and the name, address and contact information of each travel retailer and an officer or person who directs or controls the travel retailer's operations;

(d) submits the register to the superintendent upon reasonable request; and

(e) certifies that each travel retailer on the register complies with federal laws;

(3) the limited lines travel insurance producer has selected a designated responsible agent who is one of its licensed individual insurance producer employees and who is responsible for the limited lines travel insurance producer's compliance with the travel insurance laws and rules of this state;

(4) the designated responsible agent, president, secretary, treasurer and all other officers or persons who direct or control the limited lines travel insurance producer's insurance operations comply with the fingerprinting requirements for insurance producers of 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 pursuant to state law; and

(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 that the superintendent may review and that, at a minimum, contains instructions on the types of insurance offered, ethical sales practices and required disclosures to prospective customers.

C. A travel retailer that offers and disseminates travel insurance shall make available to prospective purchasers brochures or other written materials that:

(1) identify and provide the contact information of the insurer and the limited lines travel insurance producer;

(2) explain that the purchase of travel insurance is not a prerequisite to the purchase of any other product or service of the travel retailer; and

(3) explain that an unlicensed travel retailer may 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 shall not:

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

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

(3) make representation as being a licensed insurer, licensed insurance producer or insurance expert.

E. A travel retailer and its employees and authorized representatives whose insurance-related activities are limited to the offering and disseminating of travel insurance on behalf of and under the direction of a limited lines travel insurance producer that complies with this section may conduct and receive compensation for those activities.

F. A travel retailer may place insurance under an individual policy or under a group or master policy.

G. As the insurer designee, a limited lines travel insurance producer shall be responsible for the acts of the travel retailer and shall use reasonable means to ensure that the travel retailer complies with the provisions of [this section] the Travel Insurance Act.

[H. As used in this section:

(1) "limited lines travel insurance producer" means a licensed managing general agent or third-party administrator or a licensed insurance producer;

(2) "offer and disseminate" means providing general information, including a description of coverage and price, processing applications, collecting premiums and performing other nonlicensable activities permitted by this state;

(3) "travel insurance" means insurance coverage for personal risks incident to planned travel, including the interruption or cancellation of a trip or event; the loss of baggage or personal effects; damage to accommodations or rental vehicles; or sickness, accident, disability or death during travel. "Travel insurance" does not include major medical plans that provide comprehensive medical protection for travelers on trips of six months or longer, such as for those working overseas as expatriates or deployed military personnel; and

(4) "travel retailer" means a business entity that makes, arranges or offers travel services.]"

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

"[NEW MATERIAL] POLICY.--

A. Travel insurance shall be classified and filed for purposes of rates and forms under an inland marine line of insurance.

B. Travel insurance may be in the form of an individual, a group or a 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 insurance."

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

"[NEW MATERIAL] 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:

A. the travel protection plan:

(1) clearly discloses to the consumer, at or prior to the time of purchase, whether the travel protection plan includes travel insurance, travel assistance services or 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 6. A new section of the New Mexico Insurance Code is enacted to read:

"[NEW MATERIAL] SALES PRACTICES.--

A. 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.

B. For a travel insurance policy or certificate that contains a preexisting condition exclusion, information and an opportunity to learn more about the preexisting condition exclusion shall be provided any time prior to the time of purchase and in the coverage's fulfillment materials.

C. The fulfillment materials and information described in this section shall be provided to a policyholder or certificate holder as soon as practicable following the purchase of a travel protection plan.

D. Fulfillment materials shall disclose whether the travel insurance is primary or secondary to other applicable coverage.

E. A policyholder or certificate holder may cancel a policy or certificate in accordance with the provisions of Section 59A-45-11 NMSA 1978."

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

"[NEW MATERIAL] PERMISSIBLE PRACTICES.--

A. An insurer may market travel insurance directly to a consumer through the insurer's website or through an aggregator website so long as an accurate summary or short description of coverage is provided and the consumer has access to the full policy through electronic means.

B. When a consumer's destination jurisdiction requires insurance, an insurer may require a consumer to 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.

C. Permissible practices described in this section shall not constitute an unfair claims practice pursuant to the provisions of Section 59A-16-20 NMSA 1978."

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

"[NEW MATERIAL] TRAVEL ADMINISTRATION.--

A. A person shall not act or represent the person's self 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. An insurer shall be responsible for the acts of a travel administrator administering travel insurance underwritten by the insurer and shall ensure 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] RULES.--The superintendent may promulgate rules to implement the provisions of the Travel Insurance Act."

SECTION 10. Section 59A-16-20 NMSA 1978 (being Laws 1984, Chapter 127, Section 286, as amended) is amended to read:

"59A-16-20. UNFAIR CLAIMS PRACTICES DEFINED AND PROHIBITED.--Any [and all] of the following practices with respect to claims, by an insurer or other person, knowingly committed or performed with such frequency as to indicate a general business practice are defined as unfair and deceptive practices and are prohibited:

A. misrepresenting to insureds pertinent facts or policy provisions relating to coverages at issue;

B. failing to acknowledge and act reasonably promptly upon communications with respect to claims from insureds arising under policies;

C. failing to adopt and implement reasonable standards for the prompt investigation and processing of insureds' claims arising under policies;

D. failing to affirm or deny coverage of claims of insureds within a reasonable time after proof of loss requirements under the policy have been completed and submitted by the insured;

E. not attempting in good faith to effectuate prompt, fair and equitable settlements of an insured's claims in which liability has become reasonably clear;

F. failing to settle all catastrophic claims within a ninety-day period after the assignment of a catastrophic claim number when a catastrophic loss has been declared;

G. compelling insureds to institute litigation to recover amounts due under policy by offering substantially less than the amounts ultimately recovered in actions brought by such insureds when such insureds have made claims for amounts reasonably similar to amounts ultimately recovered;

H. attempting to settle a claim by an insured for less than the amount to which a reasonable person would have believed [he] the insured was entitled by reference to written or printed advertising material accompanying or made part of an application;

I. attempting to settle claims on the basis of an application that was altered without notice to, or knowledge or consent of, the insured, [his] the insured's representative, agent or broker;

J. failing, after payment of a claim, to inform insureds or beneficiaries, upon request by them, of the coverage under which payment has been made;

K. making known to insureds or claimants a practice of insurer of appealing from arbitration awards in favor of insureds or claimants for the purpose of compelling them to accept settlements or compromises less than the amount awarded in arbitration;

L. delaying the investigation or payment of claims by requiring an insured, claimant or the physician of either to submit a preliminary claim report and then requiring the subsequent submission of formal proof of loss forms, both of which submissions contain substantially the same information;

M. failing to settle an insured's claims promptly where liability has become apparent under one portion of the policy coverage in order to influence settlement under other portions of the policy coverage;

N. failing to promptly provide an insured a reasonable explanation of the basis relied on in the policy in relation to the facts or applicable law for denial of a claim or for the offer of a compromise settlement; [or]

O. violating a provision of the Domestic Abuse Insurance Protection Act;

P. marketing blanket travel insurance as free; or

Q. offering, soliciting or negotiating travel insurance or a travel protection plan by using a negative option or opt out that requires the consumer to take an affirmative action to deselect coverage."

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