State Regulators Approve Pet Health Insurance Model

The NAIC Model

States have jurisdiction over pet health insurance regulation.

The NAIC is a nonprofit, Kansas City, Missouri-based group for state insurance regulators. Its new pet insurance model will have no direct effect on states’ rules, but states can use the model when developing their own pet insurance laws and regulations.

Regulators generally classify pet insurance as a form of property and casualty insurance, and the panel that developed the model is part of the NAIC’s Property and Casualty Insurance Committee  The model itself does not define pet insurance as either a health line or P&C line.

In the past, the NAIC offered a general, “limited lines” approach to setting pet insurance rules. The approach was based on the model rules the NAIC has developed for simple products that people such as travel agents or tennis club owners might sell as an extra.

In 2016, regulators decided that pet insurance was popular enough and complicated enough to need its own model.

The NAIC has based the new model on models for human supplemental health insurance, and it has designed the model mainly for coverage for family-owned dogs and cats.

The sample language in the new model shows what kinds of rules a state could set for policy elements such as policy renewals, descriptions of conditions covered, descriptions of benefits provided, and descriptions of coverage limitations.

Another proposed provision shows how a state could regulate an issuer’s ability to deny benefits for treatments required to treat what might be a pet’s preexisting condition.

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