AN
ACT Relating to regulating insurance for rental vehicles; adding a new chapter
to Title 48 RCW; creating a new section; and prescribing penalties.
BE IT ENACTED BY THE
LEGISLATURE OF THE STATE OF WASHINGTON:
NEW
SECTION. Sec. 1.
SHORT TITLE. This chapter may be known and cited as the rental car
insurance limited agent license act.
NEW
SECTION. Sec. 2.
DEFINITIONS. The definitions in this section apply throughout this chapter
unless the context clearly requires otherwise.
(1)
"Endorsee" means an unlicensed employee or agent of a rental car
agent who meets the requirements of this chapter.
(2)
"Person" means an individual or a business entity.
(3)
"Rental agreement" means any written master, corporate, group, or
individual agreement setting forth the terms and conditions governing the use
of a rental car rented or leased by a rental car company.
(4)
"Rental car" means any motor vehicle that is intended to be rented or
leased for a period of thirty consecutive days or less by a driver who is not
required to possess a commercial driver's license to operate the motor vehicle
and the motor vehicle is either of the following:
(a)
A private passenger motor vehicle, including a passenger van, recreational
vehicle, minivan, or sports utility vehicle; or
(b)
A cargo vehicle, including a cargo van, pickup truck, or truck with a gross
vehicle weight of less than twenty-six thousand pounds.
(5)
"Rental car agent" means any rental car company that is licensed to
offer, sell, or solicit rental car insurance under this chapter.
(6)
"Rental car company" means any person in the business of renting
rental cars to the public, including a franchisee.
(7)
"Rental car insurance" means insurance offered, sold, or solicited in
connection with and incidental to the rental of rental cars, whether at the
rental office or by preselection of coverage in master, corporate, group, or
individual agreements that: (a) Is nontransferable; (b) applies only to the
rental car that is the subject of the rental agreement; and (c) is limited to
the following kinds of insurance:
(i)
Personal accident insurance for renters and other rental car occupants, for
accidental death or dismemberment, and for medical expenses resulting from an
accident that occurs with the rental car during the rental period;
(ii)
Liability insurance, including uninsured or underinsured motorist coverage,
whether offered separately or in combination with other liability insurance,
that provides protection to the renters and to other authorized drivers of a
rental car for liability arising from the operation of the rental car during
the rental period;
(iii)
Personal effects insurance that provides coverage to renters and other vehicle
occupants for loss of, or damage to, personal effects in the rental car during
the rental period; and
(iv)
Roadside assistance and emergency sickness protection insurance.
(8)
"Renter" means any person who obtains the use of a vehicle from a
rental car company under the terms of a rental agreement.
NEW
SECTION. Sec. 3.
GENERAL RULES. (1) A rental car company, or officer, director, employee, or
agent of a rental car company, may not offer, sell, or solicit the purchase of
rental car insurance unless that person is licensed under chapter 48.17 RCW or
is in compliance with this chapter.
(2)
The commissioner may issue a license to a rental car company that is in
compliance with this chapter authorizing the rental car company to act as a
rental car agent under this chapter, in connection with and incidental to
rental agreements, on behalf of any insurer authorized to write rental car
insurance in this state.
NEW
SECTION. Sec. 4.
LICENSING RENTAL CAR COMPANIES AS RENTAL CAR AGENTS. A rental car company may
apply to be licensed as a rental car agent under, and if in compliance with,
this chapter by filing the following documents with the commissioner:
(1)
A written application for licensure, signed by the applicant or by an officer
of the applicant, in the form prescribed by the commissioner that includes a
listing of all locations at which the rental car company intends to offer,
sell, or solicit rental car insurance; and
(2)(a)
A certificate by the insurer that is to be named in the rental car agent
license, stating that: (i) The insurer has satisfied itself that the named
applicant is trustworthy and competent to act as its rental car agent, limited
to this purpose; (ii) the insurer has reviewed the endorsee training and
education program required by section 5(4) of this act and believes that it
satisfies the statutory requirements; and (iii) the insurer will appoint the
applicant to act as its rental car agent to offer, sell, or solicit rental car
insurance, if the license for which the applicant is applying is issued by the
commissioner.
(b)
The certification shall be subscribed by an authorized representative of the
insurer on a form prescribed by the commissioner.
NEW
SECTION. Sec. 5.
RENTAL CAR AGENT ENDORSEES. (1) An employee or agent of a rental car agent may
be an endorsee authorized to offer, sell, or solicit rental car insurance under
the authority of the rental car agent license, if all of the following
conditions have been satisfied:
(a)
The employee or agent is eighteen years of age or older;
(b)
The employee or agent is a trustworthy person and has not committed any act set
forth in RCW 48.17.530;
(c)
The employee or agent has completed a training and education program;
(d)
The rental car company, at the time it submits its rental car agent license
application, also submits a list of the names of all endorsees to its rental
car agent license on forms prescribed by the commissioner. The list shall be
updated and submitted to the commissioner quarterly on a calendar year basis.
Each list shall be retained by the rental car company for a period of three
years from submission; and
(e)
The rental car company or its agent submits to the commissioner with its
initial rental car agent license application, and annually thereafter, a
certification subscribed by an officer of the rental car company on a form
prescribed by the commissioner, stating all of the following:
(i)
No person other than an endorsee offers, sells, or solicits rental car
insurance on its behalf or while working as an employee or agent of the rental
car agent; and
(ii)
All endorsees have completed the training and education program under
subsection (4) of this section.
(2)
A rental car agent's endorsee may only act on behalf of the rental car agent in
the offer, sale, or solicitation of a rental car insurance. A rental car agent
is responsible for, and must supervise, all actions of its endorsees related to
the offering, sale, or solicitation of rental car insurance. The conduct of an
endorsee acting within the scope of his or her employment or agency is the same
as the conduct of the rental car agent for purposes of this chapter.
(3)
The manager at each location of a rental car agent, or the direct supervisor of
the rental car agent's endorsees at each location, must be an endorsee of that
rental car agent and is responsible for the supervision of each additional
endorsee at that location. Each rental car agent shall identify the endorsee
who is the manager or direct supervisor at each location in the endorsee list
that it submits under subsection (1)(d) of this section.
(4)
Each rental car agent shall provide a training and education program for each
endorsee prior to allowing an endorsee to offer, sell, or solicit rental car
insurance. Details of the program must be submitted to the commissioner, along
with the license application, for approval prior to use, and resubmitted for
approval of any changes prior to use. This training program shall meet the
following minimum standards:
(a)
Each endorsee shall receive instruction about the kinds of insurance authorized
under this chapter that may be offered for sale to prospective renters; and
(b)
Each endorsee shall receive training about the requirements and limitations
imposed on car rental agents and endorsees under this chapter. The training
must include specific instruction that the endorsee is prohibited by law from
making any statement or engaging in any conduct express or implied, that would
lead a consumer to believe that the:
(i)
Purchase of rental car insurance is required in order for the renter to rent a
motor vehicle;
(ii)
Renter does not have insurance policies in place that already provide the
coverage being offered by the rental car company under this chapter; or
(iii)
Endorsee is qualified to evaluate the adequacy of the renter's existing
insurance coverages.
(5)
The training and education program submitted to the commissioner is approved if
no action is taken within thirty days of its submission.
(6)
An endorsee's authorization to offer, sell, or solicit rental car insurance
expires when the endorsee's employment with the rental car company is
terminated.
(7)
The rental car agent shall retain for a period of one year from the date of
each transaction records which enable it to identify the name of the endorsee
involved in each rental transaction when a renter purchases rental car
insurance.
NEW
SECTION. Sec. 6.
RENTAL CAR AGENT RESTRICTIONS. Insurance may not be offered, sold, or
solicited under this section, unless:
(1)
The rental period of the rental car agreement is thirty consecutive days or
less;
(2)
At every location where rental agreements are executed, the rental car agent or
endorsee provides brochures or other written materials to each renter who
purchases rental car insurance that clearly, conspicuously, and in plain
language:
(a)
Summarize, clearly and correctly, the material terms, exclusions, limitations,
and conditions of coverage offered to renters, including the identity of the
insurer;
(b)
Describe the process for filing a claim in the event the renter elects to
purchase coverage, including a toll-free telephone number to report a claim;
(c)
Provide the rental car agent's name, address, telephone number, and license
number, as well as the commissioner's consumer hotline number;
(d)
Inform the consumer that the rental car insurance offered, sold, or solicited
by the rental car agent may provide a duplication of coverage already provided
by a renter's personal automobile insurance policy, homeowners' insurance
policy, or by another source of coverage;
(e)
Inform the consumer that the purchase by the renter of the rental car insurance
is not required in order to rent a rental car from the rental car agent; and
(f)
Inform the consumer that the rental car agent and the rental car agent's
endorsees are not qualified to evaluate the adequacy of the renter's existing
insurance coverages;
(3)
The purchaser of rental car insurance acknowledges in writing the receipt of
the brochures or written materials required by subsection (2) of this section;
(4)
Evidence of the rental car insurance coverage is stated on the face of the
rental agreement;
(5)
All costs for the rental car insurance are separately itemized in the rental
agreement;
(6)
When the rental car insurance is not the primary source of coverage, the
consumer is informed in writing in the form required by subsection (2) of this
section that their personal insurance will serve as the primary source of
coverage; and
(7)
For transactions conducted by electronic means, the rental car agent must
comply with the requirements of this section, and the renter must acknowledge
in writing or by electronic signature the receipt of the following disclosures:
(a)
The insurance policies offered by the rental car agent may provide a
duplication of coverage already provided by a renter's personal automobile
insurance policy, homeowners' insurance policy, or by another source of
coverage;
(b)
The purchase by the renter of rental car insurance is not required in order to
rent a rental car from the rental car agent; and
(c)
The rental car agent and the rental car agent's endorsees are not qualified to
evaluate the adequacy of the renter's existing insurance coverages.
NEW
SECTION. Sec. 7.
RENTAL CAR AGENT PROHIBITIONS. A rental car agent may not:
(1)
Offer, sell, or solicit the purchase of insurance except in conjunction with
and incidental to rental car agreements;
(2)
Advertise, represent, or otherwise portray itself or any of its employees or
agents as licensed insurers, insurance agents, or insurance brokers;
(3)
Pay any person, including a rental car agent endorsee, any compensation, fee,
or commission that is dependent primarily on the placement of insurance under
the license issued under this chapter;
(4)
Make any statement or engage in any conduct, express or implied, that would
lead a customer to believe that the:
(a)
Insurance policies offered by the rental car agent do not provide a duplication
of coverage already provided by a renter's personal automobile insurance
policy, homeowners' insurance policy, or by another source of coverage;
(b)
Purchase by the renter of rental car insurance is required in order to rent a
rental car from the rental car agent; and
(c)
Rental car agent or the rental car agent's endorsees are qualified to evaluate
the adequacy of the renter's existing insurance coverages.
NEW
SECTION. Sec. 8.
ENFORCEMENT. (1) Every rental car agent licensed under this chapter shall promptly
reply in writing to an inquiry of the commissioner relative to the business of
car rental insurance.
(2)(a)
In the event of a violation of this chapter by a rental car agent, the
commissioner may revoke, suspend, or refuse to issue or renew any rental car
agent's license that is issued or may be issued under this chapter for any
cause specified in any other provision of this title, or for any of the
following causes:
(i)
For any cause that the issuance of this license could have been refused had it
then existed and been known to the commissioner;
(ii)
If the licensee or applicant willfully violates or knowingly participates in a
violation of this title or any proper order or rule of the commissioner;
(iii)
If the licensee or applicant has obtained or attempted to obtain a license
through willful misrepresentation or fraud;
(iv)
If the licensee or applicant has misappropriated or converted funds that belong
to, or should be paid to, another person as a result of, or in connection with,
a car rental or insurance transaction;
(v)
If the licensee or applicant has, with intent to deceive, materially
misrepresented the terms or effects of any insurance contract, or has engaged,
or is about to engage, in any fraudulent transaction;
(vi)
If the licensee or applicant or officer of the licensee or applicant has been
convicted by final judgment of a felony;
(vii)
If the licensee or applicant is shown to be, and is determined by the
commissioner, incompetent or untrustworthy, or a source of injury and loss to
the public; and
(viii)
If the licensee has dealt with, or attempted to deal with, insurances, or has
exercised powers relative to insurance outside the scope of the car rental
agent license or other insurance licenses.
(b)
If any natural person named under a firm or corporate car rental agent license,
or application therefore, commits or has committed any act, or fails or has
failed to perform any duty, that constitutes grounds for the commissioner to
revoke, suspend, or refuse to issue or renew the license or application for
license, the commissioner may revoke, suspend, refuse to renew, or refuse to
issue the license or application for a license of the corporation or firm.
(c)
Any conduct of an applicant or licensee that constitutes grounds for disciplinary
action under this title may be addressed under this section regardless of where
the conduct took place.
(d)
The holder of any license that has been revoked or suspended shall surrender
the license to the commissioner at the commissioner's request.
(e)
After notice and hearing the commissioner may impose other penalties, including
suspending the transaction of insurance at specific rental locations where
violations of this section have occurred and imposing fines on the manager or
supervisor at each location responsible for the supervision and conduct of each
endorsee, as the commissioner determines necessary or convenient to carry out
the purpose of this chapter.
(3)
The commissioner may suspend, revoke, or refuse to renew any car rental agent
license by an order served by mail or personal service upon the licensee not
less than fifteen days prior to its effective date. The order is subject to
the right of the licensee to a hearing under chapter 48.04 RCW.
(4)
The commissioner may temporarily suspend a license by an order served by mail
or personal service upon the licensee not less than three days prior to its
effective date. However, the order must contain a notice of revocation and
include a finding that the public safety or welfare imperatively requires
emergency action. These suspensions may continue only until proceedings for
revocation are concluded. The commissioner may also temporarily suspend a
license in cases when proceedings for revocation are pending if it is found
that the public safety or welfare imperatively requires emergency action.
(5)
Service by mail under this section means posting in the United States mail,
addressed to the licensee at the most recent address shown in the
commissioner's licensing records for the licensee. Service by mail is complete
upon deposit in the United States mail.
(6)
If any person sells insurance in connection with or incidental to rental car
agreements, or holds himself or herself or a company out as a rental car agent,
without satisfying the requirements of this chapter, the commissioner is
authorized to issue a cease and desist order.
NEW
SECTION. Sec. 9. TRUST
ACCOUNT. A rental car agent is not required to treat moneys collected from
renters purchasing rental car insurance as funds received in a fiduciary
capacity, if:
(1)
The charges for rental car insurance coverage are itemized and ancillary to a
rental transaction; and
(2)
The insurer has consented in writing, signed by an officer of the insurer, that
premiums need not be segregated from funds received by the rental car agent.
NEW
SECTION. Sec. 10. RULE
MAKING. The commissioner may adopt rules necessary to implement this chapter,
including rules establishing licensing fees to defray the cost of administering
this chapter.
NEW
SECTION. Sec. 11. The
commissioner shall report to the legislature by January 1, 2004, regarding the
impact of this act on small businesses in the state of Washington.
NEW
SECTION. Sec. 12.
CAPTIONS. Captions used in this act are not any part of the law.
NEW SECTION. Sec. 13.
Sections 1 through 10 and 12 of this act constitute a new chapter in Title 48
RCW.
