Pet Insurance
Trupanion sues Maine insurance regulator
The suit hints at a larger, core challenge to Trupanion’s survival.
Trupanion’s complaint asserts:
“As of January 1, 2023-the effective date of the Maine Pet Insurance Act-the Bureau of Insurance has prohibited Trupanion and other pet insurance companies from deferring the effective date of policies issued in Maine. As a result, to avoid the anti-selection effect of certain consumers using the prohibition on waiting periods to obtain coverage for accidents that already occurred, Trupanion is requiring that consumers must have their pet examined by a veterinarian before the policy takes effect. Other insurers have largely pulled out of the market in Maine altogether including Nationwide, which along with Trupanion constitutes half the market share of the industry.”
With many more states set to enact similar laws starting January 1, 2024, this will inevitably draw attention to EDO’s. And, so, Maine seems to be the tip of an iceberg, with a larger battle looming for Trupanion, which would challenge the entire business model itself as more states pass similar legislation banning waiting periods and put Trupanion into an EDO-only revenue model, thereby putting the spotlight on the EDO and — its legality.
If territory partners (independently contracted local sales agents critical to Trupanion’s vet-centric business model) need to be licensed just to visit vet hospitals and educate vet professionals about pet insurance, how does Trupanion explain a system of relying upon vet hospital staff to introduce Trupanion and educate consumers about the EDO without being licensed?
Trupanion Press Release Claim of NY Rate Hike ‘Approval’ Not True, Regulator Says
It’s taking a little bit of liberty. It’s a bit of an exaggeration on their part….It’s more that they just submitted these rates to us, and we are aware of them.” – NYDFS official
NYDFS: NY ‘Approval’ Claim Not True
“The department does not technically have the authority to approve [pet insurance rates]… These rates are just submitted to us. We do not have the authority to review them prior to publishing,” an official at New York’s Department of Financial Services told TCR.
When asked if Trupanion’s statement about NYDFS approving an 18% rate increase was accurate, the official said, “It’s taking a little bit of liberty. It’s a bit of an exaggeration on their part….It’s more that they just submitted these rates to us, and we are aware of them.”
By email, the official confirmed, “the Department still retains the authority to object to aspects of the rate filing,” she wrote, referring to Trupanion’s filing.
TCR has included redacted written exchanges with New York DFS et al. after the conclusion of our reporting.