Insurance; Limited License; Car Rentals Companies;
Authorizes motor vehicle rental companies to sell insurance incidental to car rentals under a limited license; provides for enforcement by the Insurance Division. (SB2883 HD1)
TWENTY-FIRST LEGISLATURE, 2002
STATE OF HAWAII
A BILL FOR AN ACT
relating to Insurance.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Chapter 431, Hawaii Revised Statutes, is amended by adding a new article to be appropriately designated and to read as follows:
motor vehicle rental company limited license
§431: -101 Definitions. (a) As used in this article:
"Limited license" means the authority conferred on a person or entity pursuant to this article to sell certain coverages relating to the rental of vehicles.
"Rental agreement" means any written agreement setting forth the terms and conditions governing the use of a vehicle that is rented or leased from a rental car company.
"Rental car company" means any person or entity that is primarily in the business of providing motor vehicles to the public under a rental agreement for a rental period not to exceed ninety days.
"Rental period" means the term of the rental agreement.
"Renter" means any person obtaining the use of a vehicle from a rental company under a rental agreement for a rental period not to exceed ninety days.
"Vehicle" or "rental vehicle" means a motor vehicle:
(1) Of the private passenger type, including passenger vans, minivans and sport utility vehicles; or
(2) Of the cargo type, with a gross vehicle weight of less than twenty-six thousand pounds, including cargo vans and pick up trucks,
that do not require a commercial drivers' license for operation of the vehicle.
§431: -102 Limited license to offer or sell insurance; prerequisites; types of coverage authorized; disclosure requirements. (a) The commissioner may issue to a rental company that has complied with the requirements of this article, a limited license authorizing the licensee to offer or sell insurance in connection with the rental of vehicles. No person licensed under this section shall advertise, represent, or otherwise hold oneself or any of one's employees out as licensed insurers, insurance agents, or insurance brokers.
(b) Prerequisite to the issuance of a limited license under this article, there shall be filed with the commissioner a written application for a limited license, signed by an officer of the applicant, in such form as the commissioner may prescribe. An applicant for a limited license shall also pay the applicable fee set forth in section 431:7-101.
(c) A limited licensee shall offer or sell insurance:
(1) Only in connection with and incidental to the rental of vehicles, whether at the rental office or by preselection of coverage in master, corporate, group rental, or individual agreements; and
(2) Only within any of the following general categories:
(A) Personal accident insurance covering the risks of travel, including but not limited to accident and health or sickness insurance, that provides coverage to renters and other rental vehicle occupants for accidental death or dismemberment and reimbursement for medical expenses resulting from an accident that occurs during the rental period;
(B) Liability insurance that, at the exclusive option for the rental company, may include uninsured and underinsured motorist coverage whether offered separately or in combination with other liability insurance, that provides protection to renters and other authorized drivers of rental vehicles for liability arising from the operation of the rental vehicle;
(C) Personal effects insurance that provides coverage to renters and other vehicle occupants for loss of, or damage to personal effects that occurs during the rental period;
(D) Roadside assistance and emergency sickness protection programs; and
(E) Any other travel or vehicle-related coverage that a rental company offers in connection with and incidental to the rental of vehicles.
(d) No insurance may be offered or sold by a limited licensee unless:
(1) The rental period does not exceed ninety consecutive days; and
(2) At every rental location where rental agreements are executed, brochures or other written materials are readily available to the prospective renter that:
(A) Summarize clearly and correctly, the material terms of coverage offered to renters, including the identity of the insurer;
(B) Disclose that the coverage offered by the rental company may duplicate coverage already provided by a renter’s personal motor vehicle insurance policy, or other source of coverage;
(C) State that the purchase of the coverage offered is not required in order to rent a vehicle; and
(D) Describe the procedure for filing a claim if the renter elects to purchase coverage and in the event of a claim;
(3) Evidence of coverage in the rental agreement is disclosed to every renter who elects to purchase coverage.
(e) Notwithstanding any other provision of this chapter, or any rule adopted by the commissioner, a limited licensee shall not be required to treat moneys collected as payment for insurance as funds received in a fiduciary capacity or to hold the funds in a separate trust account.
§431: -103 Rental company employees; training. (a) Any limited license issued under this article shall authorize any employee of the limited licensee to act individually on behalf of, and under the supervision of the limited licensee with respect to the kinds of coverage specified in section 431: -102.
(b) Each rental company licensed pursuant to this article shall conduct a training program in which employees shall receive basic instruction about the kinds of coverage specified in section 431: -102 and offered for purchase by prospective renters of rental vehicles. The training shall take place at a location affiliated with the rental car agent that is convenient for the employee, and may also include electronic or video training.
§431: -104 Violations. Upon violation of any provision of this article the commissioner may, after notice and a hearing:
(1) Revoke or suspend a limited license in accordance with article 2; or
(2) Impose penalties, including suspending the transaction of insurance at specific rental locations where violations have occurred, as the commissioner deems necessary to carry out the purposes of this article."
SECTION 2. Section 431:7-101, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:
"(a) The commissioner shall collect in advance the following fees:
(1) Certificate of authority: Issuance $900
(2) Organization of domestic insurers and affiliated corporations:
(A) Application and all other papers required for issuance of solicitation permit, filing $1,500
(B) Issuance of solicitation permit $150
(3) General agent's license:
(A) Issuance, regular license $75
(B) Issuance, temporary license $75
(4) Subagent's license:
(A) Issuance, regular license $75
(B) Issuance, temporary license $75
(5) Nonresident agent's or broker's license: Issuance $60
(6) Solicitor's license: Issuance $60
(7) Independent adjuster's license: Issuance $60
(8) Public adjuster's license: Issuance $60
(9) Workers' compensation claims adjuster's limited license: Issuance $60
(10) Independent bill reviewer's license: Issuance $80
(11) Limited license issued pursuant to section 431:9-214(c): Issuance $60
(12) Managing general agent's license: Issuance $75
(13) Reinsurance intermediary's license: Issuance $75
(14) Surplus line broker's license: Issuance $150
(15) Motor vehicle rental company limited license:
(15)] (16) Service contract provider's registration:
(16)] (17) Approved course provider certificate:
(17)] (18) Approved continuing education course certificate: Issuance $30
(18)] (19) Examination for license: For each examination, a fee to be established by the commissioner.
(b) The fees for services of the department of commerce and consumer affairs subsequent to the issuance of a certificate of authority, license, or other certificate are as follows:
(1) $600 per year for all services (including extension of the certificate of authority) for an authorized insurer;
(2) $75 per year for all services (including extension of the license) for a regularly licensed general agent;
(3) $75 per year for all services (including extension of the license) for a regularly licensed subagent;
(4) $45 per year for all services (including extension of the license) for a regularly licensed nonresident agent or broker;
(5) $30 per year for all services (including extension of the license) for a regularly licensed solicitor;
(6) $45 per year for all services (including extension of the license) for a regularly licensed independent adjuster;
(7) $45 per year for all services (including extension of the license) for a regularly licensed public adjuster;
(8) $45 per year for all services (including extension of the license) for a regularly limited licensed workers' compensation claims adjuster;
(9) $60 per year for all services (including extension of the license) for a regularly licensed independent bill reviewer;
(10) $45 per year for all services (including extension of the license) for a limited license issued pursuant to section 431:9-214(c);
(11) $75 per year for all services (including extension of the license) for a regularly licensed managing general agent;
(12) $75 per year for all services (including extension of the license) for a regularly licensed reinsurance intermediary;
(13) $45 per year for all services (including extension of the license) for a licensed surplus line broker;
(14) $ per year for all services (including extension of the license) for a limited license for motor vehicle rental companies;
(14)] (15) $75 per year for all services (including renewal of registration) for a service contract provider;
(15)] (16) $65 per year for all services (including extension of the certificate) for an approved course provider; and
(16)] (17) $20 per year for all services (including extension of the certificate) for an approved continuing education course.
The services referred to in paragraphs (1) to [
(16)] (17) shall not include services in connection with examinations, investigations, hearings, appeals, and deposits with a depository other than the department of commerce and consumer affairs."
SECTION 3. Section 431:9A-101, Hawaii Revised Statutes, is amended to read as follows:
§431:9A-101[ ]] Scope. This article governs qualifications and procedures for the licensing of insurance producers. It simplifies and organizes statutory language to improve efficiency, to permit the use of new technology, and to reduce costs associated with issuing and renewing insurance licenses.
This article does not apply to excess and surplus lines agents and brokers licensed through article 8, except as provided in section 431:9A-108 and section 431:9A-116 of this article[
.], or to limited licensees licensed pursuant to article ."
SECTION 4. Section 431:9A-104, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b) A license as an insurance producer shall not be required of the following:
(1) A officer or employee of an insurer or of an insurance producer, provided that the officer, director, or employee does not receive any commission or remuneration on policies written or sold to insure risks residing, located, or to be performed in this State and:
(A) The officer, director, or employee's activities are executive, administrative, managerial, clerical, or a combination of these and are only indirectly related to the sale, solicitation, or negotiation of insurance;
(B) The officer, director, or employee's functions relate to underwriting, loss control, inspection, or the processing, adjusting, investigating, or settling of a claim on a contract of insurance; or
(C) The officer, director, or employee is acting in the capacity of a special agent or agency supervisor, assisting insurance producers where the person's activities are limited to providing technical advice and assistance to licensed insurance producers and do not include the sale, solicitation, or negotiation of insurance;
(2) A person who secures and furnishes information for the purpose of group life insurance, group property and casualty insurance, group annuities, group or blanket accident and health insurance, for the purpose of enrolling individuals under such plans, issuing certificates under plans, or otherwise assists in administering the plans, performs administrative services related to mass marketed property and casualty insurance, or where no commission is paid to the person for the service;
(3) An employer or association or its officers, directors, employees, or the trustee of any employee trust plan, to the extent that the employers, officers, employees, directors, or trustees are engaged in the administration or operation of a program of employee benefits for the employer's or association's own employees or the employees of its subsidiaries or affiliates, which program involves the use of insurance issued by an insurer, so long as the employers, associations, officers, directors, employees, or trustees are not in any manner compensated, directly or indirectly, by the company issuing the contracts;
(4) Employees of insurers or organizations employed by insurers who are engaging in the inspection, rating, or classification of risks, or in the supervision or the training of insurance producers, and who are not individually engaged in the sale, solicitation, or negotiation of insurance;
(5) A person whose activities in this State are limited to advertising without the intent to solicit insurance in this State through communications in printed publications or other forms of electronic mass media, whose distribution is not limited to residents of this State, provided that the person does not sell, solicit, or negotiate insurance that would insure risks residing, located, or to be performed in this State;
(6) A person who is not a resident of this State who sells, solicits, or negotiates a contract of insurance for commercial property and casualty risks to an insured with risks located in more than one state insured under that contract, provided that the person is otherwise licensed as an insurance producer to sell, solicit, or negotiate that insurance in the state where the insured maintains its principal place of business and the contract of insurance insures risks located in that state; [
(7) A salaried, full-time employee who counsels or advises the person's employer relative to the insurance interests of the employer or of the subsidiaries or business affiliates of the employer, provided that the employee does not sell or solicit insurance or receive commissions[
(8) A person offering or selling insurance in connection with the rental of a motor vehicle under a limited license pursuant to article ."
SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 6. This Act shall take effect on July 1, 2099.