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On August 1, 2022, after a multi-year process that began in 2019, the Property and Casualty (C) Insurance Committee of the US National Association of Insurance Commissioners (“NAIC”) approved Model Pet Insurance Act (the “Model Act”) that was drafted by the Pet Insurance Working Group (C) to set industry standards for pet insurance coverage, sales practices, and other consumer protections. On August 13, 2022, at the 2022 Summer National Meeting, the KAIC Executive Committee (EX) and Plenary adopted the Model Act as an official KAIC model act.
As the demand for pet insurance has continued to grow exponentially over the past decade or so, the NAIC identified the need to define a clear regulatory framework for pet insurance. The Model Act focuses on the following key areas related to pet insurance: consumer protection, pre-existing conditions, wellness programs, and training requirements for insurance producers selling pet insurance.
Key features of the Model Act regarding consumer protection focus on policy limits, policy benefits and terms, policy renewal standards, and disclosure of waiting periods for coverage. Further, the Model Law requires insurers and manufacturers selling pet insurance to clearly distinguish between pet insurance policies and pet health programs in order to eliminate any confusion for consumers when deciding which products to purchase. buy. Additionally, the Model Law limits the extent to which insurers may limit or deny coverage due to pre-existing conditions of covered pets and places the burden on insurers to establish the basis on which a pre-existing condition limit will apply.
In late 2021, the Producer Licensing Uniformity Working Group (D) discussed options for a uniform producer licensing standard for pet insurance and conducted a survey of its members to gather their views on which should be the right license. The survey results showed that there was no consensus, not even a majority view on the issue. Therefore, the Pet Insurance Working Group (C) concluded that the Model Act was not the appropriate document to define what type of insurance producer licenses should be required to sell pet insurance – instead , the Model Act leaves this determination to the individual. states. This means that the appropriate manufacturer’s license to sell pet insurance will vary from state to state, making nationwide licensing more complicated than if there were a uniform standard. However, the Model Law codifies various standards for insurance producer training to ensure that producers are adequately prepared to interact with pet insurance consumers.
To view additional updates from the NAIC Summer 2022 US National Meeting, visit our meeting highlights page.
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