US insurance industry passes “clear rules” for its pet business

The National Association of Insurance Commissioners (NAIC) approved a model law setting regulatory standards for companies operating in the sector.

The so-called Pet Insurance Model Act establishes rules for the sale of pet premiums and provides disclosures to pet owners interested in purchasing the products for their animals.

The text includes several consumer protections related to policy renewals, required disclosures of waiting periods, policy limits, conditions and benefit schedules. “Robust disclosures allow consumers to affirmatively choose the policy that is best for them in a world with dozens of available options,” claims the NAIC.

The model law also limits how insurers can deny pet insurance claims related to preexisting conditions for covered pets.

Consumer confusion

It also requires insurers and their producers to clearly differentiate pet wellness programs from insurance policies to help eliminate “consumer confusion” between insurance policies and non-insurance wellness programs.

Finally, the act establishes a set of training requirements for insurance producers to “ensure that producers are appropriately prepared to present information to consumers.”

Now it is up to the individual US states to decide if they add this model text regulating the pet insurance business into their regulatory framework.

According to the North American Pet Health Insurance Association, the pet insurance industry had approximately $2.8 billion in total in-force premiums in 2021 (+30.5%).