Regulators adopt first significant legislation for fast-growing pet insurance industry. Now, states must decide.

Regulators gathering at the National Association of Insurance Commissioners’ (NAIC) Summer National Meeting voted to adopt the Pet Insurance Model Act nearly three years after the Pet Insurance Working Group began its drafting process.

“This model law establishes clear rules for the sale of pet insurance and provides important disclosures to pet owners interested in purchasing this product,” Beth Dwyer, Superintendent of Insurance for the Rhode Island Department of Business Regulation said in a statement that was part of a press release issued today by the NAIC. She added, “Now, it is up to the states to see if they would like to adopt or modify the model law for this regulatory framework to be in effect.”

“Good luck, Russ,” NAIC president Dean Cameron said, followed by laughter from the audience. Russ Galbraith of Arkansas read the following remarks to introduce the Model:

I’d like to start with a bit of history on this Model Act. After the release of a pet insurance white paper by the C Committee in April 2019, the C Committee then asked the Pet Insurance (C) Working Group to discuss the potential development of a model law that would address regulatory concerns in the pet insurance industry that were described in that white paper.  


The Pet Insurance Working Group was officially tasked with drafting a model in August 2019 and since then the Pet Insurance Working Group has held 26 meetings with active participation from industry, consumer representatives, producers, and veterinarian groups.   


The Pet Insurance Model you have before you covers required definitions and disclosures, as well as regulations for policy conditions, sales practices for wellness programs, and producer training.   


The Working Group held comment periods and had extensive discussion on all of the major issues. Of note, the Model includes several consumer protections related to policy renewals, required disclosures of waiting periods, policy limits, conditions, and benefit schedules. The Model requires disclosure language when a preexisting condition exists. The pet insurer has the burden of proving that the preexisting condition exclusion applies to the condition for which the claim is being made. The Model discusses wellness programs and prohibits a pet insurer from marketing a wellness program as pet insurance or requiring the purchase of a wellness program.  Finally, while the Working Group did decide that this model was not the appropriate place to decide the type of license required to sell pet insurance, regulators wanted to make sure producers are trained on the specific features of pet insurance products before selling those products.  


While this model was adopted by the Pet Insurance Working Group and C Committee ahead of the 2021 Fall National Meeting, there were concerns about language in the producer training section that could cause unintended consequences to producer licensing and reciprocity. The model was sent back to the Pet Insurance Working Group for revision. After discussions about the concerns raised related to the producer licensing language, the Working Group adopted the Pet Insurance Model Act with revisions to the Producer Training section, which now includes required training topics for pet insurance producers and language that allows for training requirements to be satisfied by substantially similar requirements in another state.     


I’d like to thank Don Beatty and Kendra Zoller for leading the Pet Insurance Working Group as well his Working Group members who did a tremendous job of working with consumer and industry groups in incorporating many thoughtful comments into the drafting and finalizing of this model. And thanks to Commissioner Schmidt for her leadership as C Committee chair last year in keeping the Model moving forward.   


At this time, I’d move to adopt the Pet Insurance Model Act 


Now, state legislatures may choose to adopt the legislation as it is written, make minor tweaks, or propose significant changes. The policy debates are about to begin again at the state level, and the stakes will be a lot higher, in some states more so than in others.

TCR will be covering the lobbying in state capitals sure to follow the completion of the draft, which can only become law if state legislatures approve it.

As we reported, Maine took the unique action of forging ahead this spring even as the model legislation remained sidelined at the NAIC. California and Maine are the only two states with pet insurance legislation, with Maine’s new law taking effect in January 2023.



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