Maine has become the second state in the nation, after California, to enact an explicit pet insurance law.
The legislation, signed by the governor this spring, takes effect Jan. 1. It is based on a model bill developed by a National Association of Insurance Commissioners (NAIC) task force, which aims to bring clarity and consistency to policy provisions. and pet insurance disclosures as sales of the product increase.
Maine law provisions include giving consumers the right to a premium refund within 15 days of payment, unless they have already filed a claim; limitation of waiting periods to a maximum of 30 days; the prohibition on requiring a medical examination to renew a policy; and a ban on marketing wellness programs at the same time pet insurance is solicited, negotiated, or sold. (Wellness plans, which typically provide prepaid preventive and routine care, are often sold by insurers as well as veterinary practices, but are not insurance products.)
Maine Senator Heather Sanborn, who sponsored the legislation, said she submitted the bill in late 2020, more than a year after the NAIC pet insurance group began work. She expected the model law to be completed before the end of her state’s two-year legislative session.
But as the session drew to a close this spring, the model had not been finalized. Sanborn chose not to wait.
“We decided to go ahead, partly because we were running out of legislative time and the next chance would be next spring, and I’m not running for re-election,” she explained in a statement. interview Monday. “It was something I wanted to accomplish.”
The owner of two insured dogs, Sanborn, said: “There are also a lot of dog lovers in our insurance office, and they followed [the NAIC group’s progress] and were completely supportive of the model.”
Sanborn said she and state insurance officials believed the law could be changed later if necessary, so she adopted the language of the unfinished model.
Maine’s bill proved popular. Although pet insurance industry lobbyists have opposed aspects such as the provision separating sales of wellness plans from insurance, Sanborn said, the legislation has received support. total of the Joint Standing Committee on Health Coverage, Insurance and Financial Services, which she chairs. The bill was then passed in the House and Senate by unanimous consent. The governor signed the law on April 7.
The NAIC Pet Insurance Task Force, meanwhile, met again today. It was the first time the group had met since last year, when it appeared to have finished drafting the model law. The project was to be reviewed and possibly approved at an all-NAIC meeting in December. But at the last minute, the project was removed from consideration without public explanation.
At today’s meeting, task force chair Don Beatty, who is associate general counsel with the Virginia State Corporation Commission, offered the following: “What happened was that we adopted a model, acknowledging our brilliant work. However, at the fall national meeting, there were concerns about Article 7. And so the draft model was removed from the agenda of the executive plenary.
Section 7 concerns the training of Insurance “producers”, an industry term for people who are licensed to sell insurance products. The version of the model previously adopted by the group had a large section on training, including a specified number of hours and continuous ongoing training, as well as information to be covered, namely: pre-existing conditions and waiting periods ; differences between pet insurance and uninsured wellness programs; hereditary disorders, congenital abnormalities or disorders, chronic conditions and how pet insurance policies interact with these conditions; and administrative matters such as pricing, underwriting and renewal.
Following unspecified dissatisfaction with the section, the working group considered eliminating specifics, leaving all details of mandatory training to be determined by individual jurisdictions. However, he did not make a decision. “Today’s meeting, we’re going to go over the proposed changes… and after this meeting, we’ll lay out those changes for comment and have another meeting in a few weeks with the goal of adopting a model and doing that. move forward,” Beatty said.
Kendra Zoller, deputy legislative director of the California Department of Insurance, said she would reject the revision: “Unfortunately, we would oppose this change because it does not provide uniformity and defeats the purpose of ‘a model law.’
George Bradner, director of the Connecticut Department of Insurance’s property and casualty division, noted that because the model law is just that — a model — states could follow or reject any aspect of it, including CE and training recommendations. He suggested adopting both the old and the proposed new version of section 7, presenting them as options. That way, “states could choose either version and make the necessary adjustments that align with their needs,” he said.
Once finalized, the document will not of itself have legislative authority, although the NAIC, whose 56 voting members represent 50 states, the District of Columbia and five U.S. territories, expects member jurisdictions to adopt it in some form within a few years.
Maine’s new law retains the more prescriptive training requirements specified in the earlier version of the draft, which Sanborn happily pointed out is consistent with leaving the details to the states. ” We decide ! ” she says.
At the same time, there may be changes to Maine law. Sanborn said some licensed health insurance brokers in the state would like to be able to get an endorsement on their license that would allow them to sell pet insurance — “so they can sell health insurance for the whole family.” .
That may be possible, she said, even though pet insurance is technically regulated as property and casualty insurance, not health insurance.
In fact, it was consumer confusion about the difference between pet insurance and health insurance for people that piqued Sanborn’s interest in pet insurance legislation.
“The paradigm under which it’s regulated doesn’t really align with consumers’ expectations of the coverage they’ll receive,” she said. “They expect pet insurance to behave a lot more like the health insurance they know. … So trying to match the regulatory paradigm more closely to consumer expectations, I think, will help people better understand what they are buying.”
According to the latest figures from the North American Pet Health Insurance Association, nearly 4 million dogs and cats in the United States were insured in 2021, an increase of more than 28% over the previous year.
While the rate of growth is high, the total proportion of pets insured remains modest at just under 2.5%.