Report - 2023 01 24 A30526 D248875 Bill Report 5319 Sbr Bfgt Ta 23

Summary

A Senate Bill Report on SB 5319, an act relating to pet insurance, current as of January 19, 2023 and prepared by nonpartisan staff of the Senate Committee on Business, Financial Services, Gaming & Trade. The bill is sponsored by Senators Stanford, Dozier, Mullet and Wilson, C. The report explains that Washington State has no laws specific to pet insurance and that the bill establishes requirements based on the NAIC's Pet Insurance Model Act. It summarizes required policy definitions and disclosures, a 15-day period to examine and return a policy, a permitted 30-day waiting period for illness or orthopedic coverage, and licensing and training requirements for insurance producers. The report also lists no appropriation, a fiscal note requested January 11, 2023, and a staff summary of supporting public testimony.

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                             SENATE BILL REPORT
                                   SB 5319

                                      As of January 19, 2023

Title: An act relating to pet insurance.

Brief Description: Concerning pet insurance.

Sponsors: Senators Stanford, Dozier, Mullet and Wilson, C..

Brief History:
     Committee Activity: Business, Financial Services, Gaming & Trade: 1/19/23.


                                     Brief Summary of Bill
           • Establishes certain requirements on pet insurance policies sold, solicited,
             negotiated, or offered in Washington State.
           • Requires insurance producers selling pet insurance to be properly
             licensed and trained.


SENATE COMMITTEE ON BUSINESS, FINANCIAL SERVICES, GAMING & TRADE

     Staff: Kellee Gunn (786-7429)

     Background: Pet insurance is a property insurance policy that provides coverage for
     accidents and illnesses of pets. Premiums paid depend on factors related to the pet being
     insured. These factors include species of animal, breed, gender, age, location, and the
     coverages and deductible chosen. Most pet insurance policies are reimbursement plans,
     which provide repayment to a person for covered expenses after they have met their
     deductible.

     Pet wellness programs, also known as preventive plans, provide noninsurance benefits in
     the policy form. This is often a reimbursement for commonly needed procedures, such as
     vaccination and neutering.




     This analysis was prepared by non-partisan legislative staff for the use of legislative
     members in their deliberations. This analysis is not part of the legislation nor does it
     constitute a statement of legislative intent.

Senate Bill Report                              -1-                                             SB 5319
     In 2022, the National Association of Insurance Commissioners (NAIC) adopted a model act
     related to pet insurance—#633. The model law addresses pet wellness programs,
     preexisting conditions, consumer protections, and training for insurance producers.

     Washington State does not have laws and rules specific to pet insurance policies or those
     who sell pet insurance.

     Summary of Bill: Certain requirements on insurance producers, and insurance policies
     related to pet insurance sold, solicited, negotiated, or offered in Washington State are
     established based on the NAIC's Pet Insurance Model Act.

     Specific terms related to pet insurance are defined and are required to be included, if used,
     in pet insurance policies sold. These terms include chronic condition, congenital anomaly,
     hereditary disorder, orthopedic, preexisting condition, renewal, veterinary expenses, waiting
     period, and wellness program.

     Pet insurers shall disclose certain information on exclusions, limitations, demographic
     factors effecting premium cost, and whether the policy underwriters differ from the
     company selling the policy.

     Insurance applicants have 15 days to examine and return the policy, certificate, or
     endorsement, to qualify for a refund.

     Exclusions for preexisting conditions may be issued in a policy, with burden of proof on the
     insurer to show the preexisting condition exclusion applies. Initial pet insurance policies
     covering illnesses or orthopedic conditions may have a 30-day waiting period before
     enactment, which may be waived after a veterinary examination. A waiting period for
     accident coverage is prohibited. Renewals cannot be contingent on a veterinary
     examination.

     Certain requirements are established regarding the marketing of wellness program by
     insurers and insurance producers. Participating in a wellness program cannot be a
     requirement for buying pet insurance.

     All insurance producers selling, soliciting, or negotiating a pet insurance product in the state
     must be appropriately licensed and trained.

     Appropriation: None.

     Fiscal Note: Requested on January 11, 2023.

     Creates Committee/Commission/Task Force that includes Legislative members: No.



Senate Bill Report                              -2-                                          SB 5319
     Effective Date: Ninety days after adjournment of session in which bill is passed.

     Staff Summary of Public Testimony: PRO: Pet insurance is more popular than it has ever
     been before and there are significant expenses associated with having a pet. Washington
     State Office of the Insurance Commissioner (OIC) has been working with the industry on
     this. The market for pet insurance is expected to grow. As regulators, this bill shows
     progress in getting ahead of that. Trupanion is a Seattle-based company and one of the
     largest pet insurers in the industry. Trupanion worked with the NAIC work group to
     develop this model act, in which the OIC also participated. The model act was just adopted
     in August 2022. About 160 million cats and dogs are alive today, in which 3% are insured.
     Not everyone can afford all the medical options available to their pet. This bill mandates
     consumer disclosure. This pet insurance industry does a good job today, but setting this
     floor will help the industry. The bill provides consistency for definitions across the industry.
     This bill requires every agent selling this product to be properly licensed and trained. This
     bill is a result of collaborative effort between OIC and the industry and the industry
     supports it.

     Persons Testifying: PRO: Senator Derek Stanford, Prime Sponsor; David Forte, Office of
     the Insurance Commissioner; Gavin Friedman, Trupanion Inc.

     Persons Signed In To Testify But Not Testifying: No one.




Senate Bill Report                              -3-                                          SB 5319


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