NAIC committee adopts pet insurance model law

By John Hilton

A state regulator group adopted a pet insurance model law today in an effort to standardize the product across state lines.

The Property and Casualty Insurance Committee, comprised of National Association of Insurance Commissioners, adopted the model with little comment. The committee created the Pet Insurance Working Group in 2019 with the specific charge to create pet insurance standards, noted Don Beatty, associate general counsel at the Virginia State Corporation Commission.

The working group sent a previous version of the model to the committee last year, Beatty said.

"There were some uncertainty with respect to the producer training, some concern with the language so was sent back to us," he explained. "We've had a number of discussions and meetings on the producer training section ... and we believe we have addressed all the concerns that the training allows."

The full NAIC executive committee must vote on final adoption before any model law is sent to the state for consideration.

According to the North American Pet Health Insurance Association, North America’s pet insurance sector exceeded $2.83 billion at the end of 2021, and industry growth more than doubled over the past four years since 2018.

In a May report, the association reported a record $2.837 billion in total in-force premiums in 2021 (up over 30.5% from $2.175 billion in 2020) and over 4.41 million insured pets across North America (up 27.7% from over 3.45 million pets insured in 2020).

California adopted the first pet insurance law in 2014, but no state followed.

The NAIC’s Pet Insurance Model Act is largely based on California’s law, which established consumer protections by requiring pet insurers to disclose information regarding reimbursement benefits, preexisting condition limitations, and a clear explanation of limitations of coverage including coinsurance, waiting periods, deductibles, and annual or lifetime policy limits.

It also provided consumers with a “free look” period in which a pet insurance policy could be returned for a full refund.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john.hilton@innfeedback.com. Follow him on Twitter @INNJohnH.