NAIC Approves Pet Health Insurance Regulatory Framework
The NAIC model
States have jurisdiction over the regulation of pet health insurance.
The NAIC is a Kansas City, Missouri-based nonprofit group for state insurance regulators. Its new pet insurance model will have no direct effect on state rules, but states can use the model when developing their own pet insurance laws and regulations.
The NAIC classifies pet insurance as a form of property and casualty insurance.
In the past, the NAIC offered a general “limited lines” approach to establishing pet insurance rules. The approach was based on model rules that the NAIC developed for simple products that people such as travel agents or tennis club owners could sell as an extra.
In 2016, regulators decided that pet insurance was popular enough and complicated enough to require its own model.
The NAIC based the new model on human supplemental health insurance models and designed the model primarily for coverage of family-owned dogs and cats.
The new model’s sample language shows the types of rules a state might set for policy items 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 necessary to treat what could be a pre-existing condition of a pet.