Insurance News

NAIC Passes Regulatory Standards for Pet Insurance


The Nationwide Affiliation of Insurance coverage Commissioners (NAIC) introduced that it has handed the Pet Insurance coverage Mannequin Act, a mannequin regulation that establishes clear guidelines for pet insurance coverage gross sales and requires disclosures for pet house owners.

The brand new regulation comes on the heels of sharp development in annual premiums and new insurance policies within the U.S.

Key Takeaways

  • The Nationwide Affiliation of Insurance coverage Commissioners handed the Pet Insurance coverage Mannequin Act this week.
  • The mannequin regulation, which particular person states can undertake as-is or modify to suit their wants, gives extra protections for customers who buy insurance coverage for his or her pets.
  • Specifically, the regulation requires sure disclosures for potential policyholders, in addition to guidelines for the gross sales course of.

NAIC Creates a New Pet Insurance coverage Mannequin Legislation for States to Undertake

Because the pet insurance coverage trade grows quickly, the NAIC has discovered some holes within the regulation that might hurt customers, which is why it handed the Pet Insurance coverage Mannequin Act. The regulation consists of 4 key parts:

  • Client protections: The mannequin regulation gives a number of shopper protections associated to coverage renewals, required disclosures of ready intervals, coverage limits, situations, profit schedules, and extra. It additionally requires strong disclosures that enable customers to affirmatively select the coverage that’s finest for them.
  • Preexisting situations: It limits how insurers can deny pet insurance coverage claims associated to preexisting situations of lined pets. It additionally places the burden of proof on the insurance coverage supplier to show {that a} preexisting situation limitation applies.
  • Wellness packages: The mannequin regulation requires insurance coverage carriers and producers to obviously differentiate pet wellness packages from insurance coverage insurance policies to get rid of confusion for customers wanting to buy one or the opposite.
  • Coaching necessities: Coaching for producers is codified to make sure that they’re correctly ready to offer crucial info to customers.

Be aware, nonetheless, that NAIC is a regulatory assist group ruled by chief insurance coverage regulators from all 50 states, the District of Columbia, and 5 U.S. territories, and doesn’t have legislative powers. Insurance coverage services and products are regulated on the state degree, so whereas the NAIC can present mannequin legal guidelines, particular person states can select to undertake them, modify them, or ignore them.

The mannequin regulation comes on the heels of spectacular development within the pet insurance coverage trade. The NAIC states that the trade noticed 30.5% development in annual premiums from 2020 to 2021, in addition to 27.7% development in insured pets.



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