Consumer reps blast pet insurance industry in scathing letter; our story to follow

In damning written comments submitted to the Pet Insurance Working Group task force on Wednesday, consumer representatives blasted the pet insurance industry’s trade group, the North American Pet Health Insurance Association (NAPHIA), for comments made by the group’s attorney Cari Lee during last week’s meeting.

“We have given, and given, and given, and given, and compromised, and compromised, and compromised,” NAPHIA lawyer Cari Lee told Working Group chairman Donald C. Beatty last week. “The waiting period language really is a line in the sand. It will be something we will oppose and will result in us, very likely, opposing the model,” she added, referring to the model pet insurance law. She added, “I wish it didn’t have to be that way. Really, we’re hoping for a better outcome.”

In comments submitted by designated consumer representatives to the NAIC’s Pet Insurance Working Group on July 28, Birny Birnbaum (Center for Economic Justice) and Brendan Brigeland (Center for Insurance Research) wrote:

“We are troubled by NAPHIA’s threat to regulators during the last call if regulators don’t comply with industry wishes and memorialize (or worsen)… NAPHIA’s comments make clear that NAPHIA seeks regulation to protect and memorialize current pet insurance sales practices and not to protect consumers. NAPHIA’s comments also reveal their belief that they have veto power over regulator actions…Needless to say, bowing to industry threats would not be a good look for state insurance regulators….In sum, the arguments offered by industry for waiting periods are illogical and without any empirical support. CIR and CEJ have conclusively refuted the rationales provided by industry for waiting periods and demonstrated that waiting periods will harm pet insurance consumers while failing to address allegations of adverse selection. It is precisely issues like the proposed waiting periods where regulators demonstrate your commitment to consumer protection. Further, prohibiting waiting periods does not prevent an insurer from offering pet insurance. While such a prohibition may change current industry practices, there is no reason why pet insurers cannot adapt to such a prohibition. In fact, that is the purpose of a model law or actual state law – to stop unfair and deceptive practices and create a competitive market in which both consumers and insurers have market power.”

TCR story coming soon

Full document: