New York State Seal
STATE OF NEW YORK
INSURANCE DEPARTMENT
25 BEAVER STREET
NEW YORK, NEW YORK 10004

George E. Pataki
Governor

Howard Mills
Superintendent

The Office of General Counsel issued the following opinion on August 2, 2005, representing the position of the New York State Insurance Department.

Re: Regulation of Travel Agents Selling Travel Insurance.

Questions Presented:

1. Must a travel agent who wishes to sell only baggage or accident insurance tickets (i.e., travel insurance) in New York be licensed by the Insurance Department?

2. Are travel agents, who are licensed to sell only travel insurance in New York, subject to the same statutory and regulatory licensing requirements as other New York licensed insurance agents?

3. Does the Insurance Department investigate complaints of insurance agent misconduct against travel agents who are licensed to sell only travel insurance in New York?

Conclusions:

1. Yes. A travel agent who wishes to sell only baggage or accident insurance tickets (i.e., travel insurance) must be licensed by the New York State Insurance Department as an insurance agent to sell such insurance in New York. Please be advised that such license grants the travel agent the authority to sell only travel insurance.

2. The Insurance Law does not require such travel agents to pass a written examination (which would otherwise be required as a prerequisite to the issuance of an insurance agent’s license) to become licensed for the limited purpose of selling baggage or accident insurance tickets to cover the risks of travel. N.Y. Ins. Law § 2103(g) (McKinney Supp. 2005). And the Insurance Law exempts travel agents who hold such licenses from any continuing education requirements, which would otherwise serve as prerequisites for the renewal of an insurance agent’s license. N.Y. Ins. Law § 2132(b)(1) (McKinney Supp. 2005). But such travel agents are subject to all other statutory and regulatory licensing requirements (e.g., the payment of licensing and renewal fees) applicable to insurance agents in New York.

3. Yes. The Insurance Department’s Consumer Services Bureau investigates complaints of misconduct against travel agents who are licensed to sell only travel insurance in New York, and the Insurance Department may discipline such travel agents in accordance with N.Y. Ins. Law §§ 2110 and 2127, which are applicable to, inter alia, all New York licensed insurance agents.

Facts:

There are no presented facts.

Analysis:

N.Y. Ins. Law § 2103(a)-(b) (McKinney Supp. 2005) authorizes the Insurance Department to issue an insurance agent’s license for the limited purpose of granting its holder the authority to sell travel insurance (i.e., baggage or accident insurance tickets to cover the risks of travel). Travel insurance may provide both property/casualty insurance coverage (i.e., the baggage component), and accident and health insurance coverage (i.e., the accident insurance ticket component).

A travel agent who wishes to sell only travel insurance must be licensed by the New York State Insurance Department as an insurance agent to sell such insurance in New York. Such license grants the travel agent the authority to sell travel insurance only, and the limited nature of such license is duly noted within the internal records of the Insurance Department’s Licensing Bureau.

N.Y. Ins. Law § 2103(g)(1) (McKinney Supp. 2005) does not require a travel agent who applies for such license to pass a written examination, which is generally required as a prerequisite for the issuance of other insurance agent licenses:

(g) No such written examination shall be required:

(1) as a prerequisite to the issuance of a baggage or accident and health insurance agent's license to any ticket selling agent or representative of a railroad company, steamship company, carrier by air, or public bus carrier, who shall act thereunder as insurance agent only in reference to the issuance of baggage or accident insurance tickets primarily for the purpose of covering risk of travel . . . .

And N.Y. Ins. Law § 2132(b)(1) (McKinney Supp. 2005) exempts a travel agent (who holds a license to sell travel insurance only) from any continuing education requirements, which must generally be fulfilled to renew an insurance agent’s license. Such exemptions exist for travel agents (who seek an insurance agent’s license to sell travel insurance only) because it would be too burdensome to require a ticket selling agent to take a written examination since such licensee, in order merely to sell the limited form of ticket insurance, would not possess the broad knowledge tested in an insurance agent’s written examination. With the exception of these two exemptions, travel agents who hold such license are subject to the same statutory and regulatory licensing requirements (e.g., initial licensing fees and renewal fees) as all other insurance agents.

The Insurance Department’s Licensing Bureau has licensing kits available that contain additional information that may be helpful to this inquiry. The Licensing Bureau can be contacted by telephone, (518)474-6630, or e-mail, licensing@ins.state.ny.us.

The Insurance Department’s Consumer Services Bureau investigates complaints of misconduct against, inter alia, all New York licensed insurance agents, which include travel agents who are licensed to sell only travel insurance. The Insurance Department may discipline such licensees in accordance with N.Y. Ins. Law §§ 2110 and 2127 (McKinney 2000 & Supp. 2005).

For further information you may contact Associate Attorney Kristian Earl Lynch at the New York City Office.