The National Association of Insurance Commissioners (“NAIC”) has recently passed the Pet Insurance Model Act (the “Act”).  The NAIC’s passing of the Act follows a continued increase in annual premiums in connection with pet insurance policies.

The Act provides a comprehensive legal framework, which includes consumer protections and disclosure requirements, within which pet insurance may be sold in states that adopt the Act.  Noteworthy provisions of the Act include:

  • Preexisting Conditions: A pet insurer (“Insurer”) may exclude one or more preexisting conditions.  However, any condition for which coverage was offered may not be excluded on renewal of a policy.  In addition, the Insurer bears the burden of proving such exclusion exists.  Finally, an Insurer shall not require an examination at renewal.
  • Required Disclosures: An Insurer is required to provide consumers with the right to examine and return a pet insurance policy.  Unless a claim has been filed, a consumer will have 15 days from the date the consumer received to policy to review and return it.  If returned, an Insurer shall return any premium paid within 30 days.  In addition, an Insurer shall disclose to the consumer a summary description of the basis or formula upon which the Insurer determines claims payments, benefit schedules, required aspects of medical examinations, if applicable, and any waiting periods and the requirements applicable to them.
  • Waiting Period: An Insurer may impose a waiting period not to exceed 30 days.  An Insurer is prohibited from denying coverage resulting from an accident during such waiting period.
  • Sales Practices for Wellness Program: The Act prohibits an Insurer from advertising a wellness program as pet insurance and the products or coverages shall not duplicate products or coverages available through a pet insurance policy.
  • Insurance Producer Training: The Act requires producers to complete at least ten hours of pre-licensing or continuing education hours.

The Pet Insurance Model Act can be found here.