This post is part of a series sponsored by AgentSync.
You and your friend have booked a once-in-a-lifetime cross-country train trip to celebrate your biggest achievement to date. What could go wrong? Unfortunately, an emergency appendectomy disrupts your plans two days before your departure. Good to have travel insurance!
However, the average observer probably does not understand that under that travel insurance there is a whole network of people and agencies and carriers, all of whom are responsible for bringing this protection to interested consumers. And beneath that network is a layer of law that shapes how those businesses obtain licenses, affiliate, and ultimately deliver contracts to consumers.
While a life insurance license or a property and casualty insurance license may be the same in every state, travel has many variations that make state reciprocity a tricky proposition. Here, we’ve listed some of the common differences we see between state regulation of travel insurance licenses.
1. Some states do not require producers or agencies to be licensed to travel
The first variation on the travel lines theme that makes replication difficult is that some states do not require any type of license to sell travel insurance. In these states, travel insurance may not be regulated by the state insurance department but may be considered a product warranty.
Some states do not require sales agencies or their sales people to have insurance licenses but require them to operate under the supervision of an appropriate travel license agency. Or perhaps a premises and accident (P&C) licence. Or maybe a travel agency can sell travel insurance without a license as long as the coverage is part of a travel package, but never as a stand-alone product.
This variation even within a single state is confusing, and inevitably makes reconciliation difficult in states that require a certain type of licensing.
2. Some states include your driver’s license under other major licenses
Many states allow licensed P&C producers to sell travel insurance under the P&C line of authority. And some states allow anyone with a major lines license — property, casualty, life, or health — to sell travel insurance as long as they have the proper training from the carrier.
States that include travel lines under other major jurisdictions often have very specific exceptions as to whether their travel licensing framework applies to manufacturers, agencies, third-party regulators, or any combination of these businesses and individuals.
As you might have guessed, this, too, makes finding state matching a bad thing.
3. You can predict getting a travel appointment in other states if you have a P&C license
In some states, if your ability to sell travel insurance stems from a P&C license, the travel insurance carriers you sell to can waive your travel designation. A great discount for your carriers, although you will still need P&C appointments with the appropriate carriers.
4. Some states require you to have a special restricted lines tour license that is different from other licenses
Many states require manufacturers to have a specific limited lines travel license in order to sell travel insurance. As we have said, revenge is difficult in the lines of travel, and this is one of the reasons.
At least one state also encourages producers to use their travel license as a designated home state (DHS) license to facilitate repatriation.
Some states that require a limited lines travel license will grant a nonresident whose status includes the sale of travel under a P&C or other major lines license. Sometimes this requires the manufacturer’s state DOI to submit proof that the state covers transportation under a trunk line license. And sometimes this requires manufacturers to take a special approach to application…
5. Remember paper license applications? * Insurance compliance is laughable *
In the event that a producer applies for a non-resident state limited tour lines license and the producer’s state operates tours under a major lines license, the non-resident state may require the producer to submit a paper application. There are at least three states where this is currently true: Alaska, Colorado, and New Mexico.
6. The similarity of a manufacturer’s license to a cruise line’s license is somewhat confusing
As you might think thanks to “Is it a P&C license? Is it a limited line license? Is it something anyone with a major lines license should be able to sell?”, Issuing a manufacturer’s license to anyone who wants to sell travel insurance across national lines is complicated.
Some states make it easier. Some states do not.
Take the pain out of license travel with AgentSync Manage
Do you know how we know all these crazy variations? That’s because we’ve done the hard work of mapping out how cruise line licensing works in all the different states, and how a manufacturer or agency can find uniformity. And now all that useful data is mapped to our Manage product.
What that means for travel insurance agencies and carriers is that AgentSync can take the application of non-resident licenses in all states from being a manual and tedious process to having a structured back-up data built-in. By using our proprietary line of authority map in combination with data. from the National Insurance Producer Registry (NIPR), you can maintain a complete picture of your producers in all lines of business and in all states in which you operate.
To see how AgentSync can transform your travel license compliance and manufacturer management, request a tour line-specific demo today.
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