Travel insurance license regulation requires travel agents to opt in. // © 2012 Thinkstock
Marc Kassouf is owner and CEO of Pride Travel, which specializes in catering to the needs of gay and lesbian clientele. Kassouf holds industry certifications, most notably by Cruise Lines International Association, the Travel Institute and destination visitors’ bureaus including Europe, Asia, and the Americas. He sat on two board committees of the International Gay and Lesbian Travel Association, has traveled to nearly four dozen countries and sailed on more than 60 cruises.
Regulation is a broad spectrum, from rules that provide basic governance in order to form a foundation to burdensome laws that make it impossible to function in a business or industry. The key when approaching a particular item is to accurately analyze where it falls on this broad spectrum.
For the travel agency community, regulation takes many forms and not all of them are burdensome. After all, regulation is responsible for the state Seller of Travel requirements, among others, which help provide a basic foundation for consumer trust and accountability. As an agency owner, I believe that the requirement for an insurance license to sell travel insurance is a benign regulation. For example, California’s requirements for obtaining a license to sell travel insurance are simple:
• File and pay a $22 licensure fee per year for a two-year license.
• Pay a one-time fingerprinting fee of approximately $50-$70.
• Pass an FBI and DOJ criminal background check.
Renewing agents need only to pay the same fee every two years ($44), an amount easily recoverable with one average policy sale. Preferred insurance companies may also reimburse all fees. While a bit tedious, this requirement serves a purpose. The licensure ensures that, at the very least, there is some form of consumer accountability (the state’s Department of Insurance, for example, mediates complaints). Licensure also denies access to those with certain criminal backgrounds, which is only a small barrier to entry that ensures a general standard.
Other types of insurance often require rigorous requirements, including examination and demonstrated competence in the subject, while travel insurance requirements (at least in California) simply require the above and a sincere desire to know and sell the insurance product. Indirectly, the licensure process ensures that only travel agents who can see the profit potential and who have taken the time to familiarize themselves with insurance products are the ones who opt in and make the effort to get licensed.