Pet insurance regulation delayed again, without explanation – updated

This story has been updated.*

Any hope of a more regulated, tamed pet insurance industry has been placed on hold yet again. The Pet Insurance Model Law, which has been delayed many times in what has been nearly three-years of drafting processes.

Even after the law is adopted by the National Association of Insurance Commissioners (NAIC), which, at the earliest, would now occur at the next National Meeting in April, the law still needs to be considered by individual states where the policy battles begin again, assuming the states consider the law at all.

“We have had some late, breaking developments on the pet insurance model act,” David Altmaier of Florida announced Thursday morning during the NAIC’s final meeting of 2021.

There is some irony about the notion that a law ostensibly focused on consumers would be pulled out of a meeting agenda without a public explanation. It’s not as though the meeting was private; indeed, TCR published video  of the exact moment during which the law was removed from the agenda.

The NAIC has not returned requests for comment. Even Trupanion CEO Darryl Rawlings, who has never been one to dodge tough policy issues on this reporter’s watch involving the pet insurance law, did not return requests seeking comment. Trupanion Co-President Margi Tooth also did not respond to requests seeking comment. NAPHIA spokesperson Kristen Lynch also did not respond to emails seeking comment. Matthew Gendron of the Rhode Island Department of Insurance is one of the more vocal members of the Pet Insurance Working Group, though he has also not responded, and the chairman of the Working Group, the venerable Donald C. Beatty said in a brief conversation that he had no idea what had happened with the law.

Early Friday morning, Center for Economic Justice’s Birny Birnbaum said in an email to undisclosed recipients that the sudden removal may have been related to “some commissioners” who “sought more clarity” on licensing, an area that has caused an especially large portion of delays in the process. Mr. Birnbaum declined to elaborate.

Kansas Insurance Commissioner Vicki Schmidt (above), who is also the Property and Casualty (C) Committee Chair, delivered a brief statement towards the end of the meeting confirming that the Pet Insurance Law was out, describing the Law as “extremely unlucky.”

Commissioner Schmidt, however, did not offer any explanation for why the Law was being delayed nor did she return multiple emails seeking comment, except to say on Friday morning that she had been traveling on Thursday. TCR continued to follow up with Commissioner Schmidt.

“Now, this is the part of the speech that I am going to have to improvise because my remarks say, ‘As a member of the NAIC team, I am proud to have helped pass a Pet Insurance Model,’ Commissioner Schmidt said in a brief statement towards the end of the regulators’ final meeting of 2021. ‘Well, it turns out, Agenda Item #13 today was extremely unlucky. But I am committed to seeing that pet insurance model through somehow, someday and hopefully someday soon.'”

Reached for comment late Thursday evening, Pet Insurance Working Group chairman Donald Beatty of Virginia told TCR he had “no idea” what had happened or what the reason was for the last-minute removal of the Pet Insurance Law as he had been flying home from California for much of the afternoon, while the meeting was underway. Reached again Friday morning, Mr. Beatty maintained that he did not know what had happened but vowed to reach out if he learned anything.

Whatever the reason for the removal of the law from Thursday’s meeting, here are the facts TCR can report:

First, the Pet Insurance Model Law was not adopted by the NAIC, after which the legislation would have gone to state legislatures as early as January 2022, whereupon the policy debates we’ve been covering would have started all over again, if at all. Without question, this law has many years of state battles ahead, but moving out of the NAIC would have been a crucial step forward in what has already been a nearly three-year drafting process. As of now, it’s anyone’s guess if or when the industry will ever see any meaningful regulatory framework.

Second, it’s a fact that regulatory frameworks drive consumer confidence and that the pet insurance industry’s trade group, the North American Pet Health Insurance Association (NAPHIA), has fought more than it has supported legislation intended to protect consumers. No law is perfect, but whatever we learn was behind this latest delay, while not necessarily at all the result of industry action in this case, no party has been more responsible than the industry the law would regulate, for delaying a law that would bring some semblance of reliability to an otherwise free-wheeling industry for which the music will now continue for however many more months and years at the expense of pet owners who continue to be blindsided unless they happen to choose wisely.

Finally, TCR has new reporting, forthcoming, that shows how pet owners who may be first-time pet insurance policy holders are being blindsided by complex online marketing scams that neither federal nor state regulators seem to have the appetite nor the ability to reign in.

*Update: On December 24, TCR again reached out to Chairman Beatty for an update. Mr. Beatty advised that he knew nothing beyond what Mr. Birnbaum had released days ago, which was that the delay was related to licensing. NAPHIA’s Kristen Lynch did not respond. An NAIC spokesman also did not respond.