Travel agents are not insurance agents, but after years of negotiations, 46 of 50 states have now adopted regulations that enable travel agents to sell policies under an umbrella license held by the travel insurance companies.

Several years ago, insurers and the U.S. Travel Insurance Association (USTIA) proposed regulations to take the licensing burden off travel advisers and shift it to insurers, who carry the burden of educating the advisers and keeping records of those who sell their policies.

The advisers, in turn, are required to direct clients to the insurer to answer other-than-basic questions about policies. 

Jason Schreier, CEO of April Travel Protection, said that today, most states have adopted the reform, though a handful still require advisers to be individually licensed to sell insurance.

Advisers, he said, "should definitely make sure that they reach out to their insurance partner and make sure they have the most up-to-date information on licensing. And don't assume that one insurance partner, one underwriter, will have the same licensing requirements as another one."

The licensing requirements come as the National Association of Insurance Commissioners (NAIC) and the National Conference of Insurance Legislators (NCOIL) are considering new model acts that states could adopt with regard to travel insurance regulations. (Insurance is regulated at the state, not the federal, level.)

John Fielding, a lawyer with Steptoe & Johnson who has been working with the USTIA on the issue, said NCOIL's model act, adopted at the beginning of last year, became the basis for NAIC's act, which is up for membership approval in November.

"Once that is done at the NAIC level, then both the legislators will have acted and the regulators will have acted, and we're hoping that the states will then move to adopt this as a law in their state," Fielding said.

Several states have adopted laws identical or similar to the NCOIL and NAIC models, Fielding said, and the hope is that more states will take action in 2019. While the full model act under consideration by the NAIC deals with a number of issues of interest to insurance companies, such as regulations that govern bundled products and premium taxes, the portions dealing with travel agent licensing have already been adopted by some 46 states. 

Of the remaining states, Fielding said, New York and Hawaii have not taken any action with respect to licensing reform, Washington's regulation framework has not been fully adopted, and Iowa does not require licensure for limited lines travel insurance.

Prior to the regulations, Fielding said, an adviser had to be licensed as an insurance agent in order to sell travel policies. Under the new approach, travel advisers are licensed under the larger umbrella license of an insurance company. The new approach is considered a win.

"It's a big deal, and this really lowers that [licensing] burden greatly without doing any harm to consumers," Fielding said. 

Beth Godlin, president of Aon Affinity Travel Practice and a member of the USTIA Board of Directors, said that if all 50 states were to adopt model acts similar to the one the NAIC recommends, the repercussions would be different for each insurer.

"I don't think it means an enormous change, but it's going to be different by carrier," Godlin said.

Some newer entrants, such as Travel MedEvac Insurance, built their companies from the ground up to be compliant under the new regulations, said MedEvac's founding partner Jim Labelle.

"At the end of the day," Labelle said, "I think this protects travel agents as much as it adds another level of making sure they're complying regulatory-wise."

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