Senate Bill 5319 — Pet Insurance (Washington, 2023)

Summary

Senate Bill 5319, State of Washington, 68th Legislature, 2023 Regular Session, by Senators Stanford, Dozier, and Mullet, among others, read first time 01/12/23 and referred to the Committee on Business, Financial Services, Gaming & Trade. The act relates to pet insurance and adds a new chapter to Title RCW. Section 2 defines terms including chronic condition, congenital anomaly, hereditary disorder, orthopedic and preexisting condition, and defines pet insurance as a property insurance policy that provides coverage for accidents and illnesses of pets. Section 8 provides that the insurance commissioner may adopt rules, and Section 10 states that the act takes effect January 1, 2024.

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Full text

     S-0512.1

                               SENATE BILL 5319


     State of Washington       68th Legislature         2023 Regular Session

     By Senators Stanford, Dozier, Mullet, and C. Wilson

     Read first time 01/12/23.       Referred   to   Committee   on   Business,
     Financial Services, Gaming & Trade.




1        AN ACT Relating to pet insurance; adding a new chapter to Title
2    48 RCW; and providing an effective date.


3    BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:


 4       NEW SECTION. Sec. 1. (1) The requirements of this chapter shall
 5   apply to pet insurance policies that are issued to any resident of
 6   this state, are sold, solicited, negotiated, or offered in this
 7   state, and policies or certificates that are delivered or issued for
 8   delivery in this state.
 9       (2) All other applicable provisions of this state's insurance
10   laws continue to apply to pet insurance except that the specific
11   provisions of this chapter shall supersede any general provisions of
12   law that would otherwise be applicable to pet insurance.

13       NEW SECTION.    Sec. 2.    The definitions in this section apply
14   throughout   this  chapter   unless  the   context  clearly   requires
15   otherwise.
16       (1) "Chronic condition" means a condition that can be treated or
17   managed, but not cured.
18       (2) "Congenital anomaly" and "congenital disorder" mean a
19   condition that is present from birth, whether inherited or caused by
20   the environment, which may cause or contribute to illness or disease.
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 1       (3)   "Hereditary   disorder"   means  an   abnormality   that   is
 2   genetically transmitted from parent to offspring and may cause
 3   illness or disease.
 4       (4) "Orthopedic" refers to conditions affecting the bones,
 5   skeletal   muscle,   cartilage,   tendons,  ligaments,    and   joints.
 6   "Orthopedic" includes, but is not limited to, elbow dysplasia, hip
 7   dysplasia, intervertebral disc degeneration, patellar luxation, and
 8   ruptured cranial cruciate ligaments. It does not include cancers or
 9   metabolic, hemopoietic, or autoimmune diseases.
10       (5) "Pet insurance" means a property insurance policy that
11   provides coverage for accidents and illnesses of pets.
12       (6)(a) "Preexisting condition" means any condition for which any
13   of the following are true prior to the effective date of a pet
14   insurance policy or during any waiting period:
15       (i) A veterinarian provided medical advice;
16       (ii) The pet received previous treatment; or
17       (iii) Based on information from verifiable sources, the pet had
18   signs or symptoms directly related to the condition for which a claim
19   is being made.
20       (b) A condition for which coverage is afforded on a policy cannot
21   be considered a preexisting condition on any renewal of the policy.
22       (7) "Renewal" means to issue and deliver at the end of an
23   insurance policy period a policy which supersedes a policy previously
24   issued and delivered by the same pet insurer or affiliated pet
25   insurer and which provides types and limits of coverage substantially
26   similar to those contained in the policy being superseded.
27       (8) "Veterinarian" means an individual who holds a valid license
28   to practice veterinary medicine from the appropriate licensing entity
29   in the jurisdiction in which he or she practices.
30       (9) "Veterinary expenses" means the costs associated with medical
31   advice, diagnosis, care, or treatment provided by a veterinarian
32   including, but not limited to, the cost of drugs prescribed by a
33   veterinarian.
34       (10) "Waiting period" means the period of time specified in a pet
35   insurance policy that is required to transpire before some or all of
36   the coverage in the policy can begin.
37       (11) "Wellness program" means a subscription or reimbursement-
38   based program that is separate from an insurance policy that provides
39   goods and services to promote the general health, safety, or well-
40   being of the pet.
                                      p. 2                          SB 5319
 1       NEW SECTION. Sec. 3. (1) If a pet insurer uses any of the terms
 2   in section 2 of this act in a policy of pet insurance, the pet
 3   insurer shall use the definition of each of those terms as set forth
 4   in section 2 of this act and include the definition of the terms in
 5   the policy. The pet insurer shall also make the definition available
 6   through a clear and conspicuous link on the main page of either the
 7   pet insurer's website or the pet insurer's program administrator's
 8   website, or both.
 9       (2) Nothing in section 2 of this act shall in any way prohibit or
10   limit the types of exclusions pet insurers may use in their policies
11   or require pet insurers to have any of the limitations or exclusions
12   in this chapter.

13       NEW SECTION.     Sec. 4.    (1) A pet insurer      transacting   pet
14   insurance shall disclose the following to consumers:
15       (a) If the policy excludes coverage due to any of the following:
16       (i) A preexisting condition;
17       (ii) A hereditary disorder;
18       (iii) Either a congenital anomaly or a congenital disorder, or
19   both; or
20       (iv) A chronic condition;
21       (b) If the policy includes any other exclusions, the following
22   statement: "Other exclusions may apply. Please refer to the
23   exclusions section of the policy for more information";
24       (c) Any policy provision that limits coverage through a waiting
25   or affiliation period, a deductible, coinsurance, or an annual or
26   lifetime policy limit;
27       (d) Whether the pet insurer reduces coverage or increases
28   premiums based on the insured's claim history, the age of the covered
29   pet, or a change in the geographic location of the insured; and
30       (e) If the underwriting company differs from the brand name used
31   to market and sell the product.
32       (2)(a) Unless the insured has filed a claim under the pet
33   insurance policy, pet insurance applicants shall have the right to
34   examine and return the policy, certificate, or endorsement to the
35   company or an insurance producer appointed by the company within 15
36   days of its receipt and to have the premium refunded if, after
37   examination of the policy, certificate, or endorsement, the applicant
38   is not satisfied for any reason.


                                     p. 3                           SB 5319
 1       (b) Pet insurance policies, certificates, and endorsements must
 2   have a notice prominently printed on the first page or attached
 3   thereto including specific instructions to accomplish a return. The
 4   following free look statement or language substantially similar must
 5   be included:
 6       "You have 15 days from the day you receive this policy,
 7   certificate, or endorsement to review it and return it to the company
 8   if you decide not to keep it. You do not have to tell the company why
 9   you are returning it. If you decide not to keep it, simply return it
10   to the company at its administrative office or you may return it to
11   the insurance producer that you bought it from as long as you have
12   not filed a claim. You must return it within 15 days of the day you
13   first received it. The company will refund the full amount of any
14   premium paid within 30 days after it receives the returned policy,
15   certificate, or endorsement. The premium refund will be sent directly
16   to the person who paid it. The policy, certificate, or endorsement
17   will be void as if it had never been issued."
18       (3) A pet insurer shall clearly disclose a summary description of
19   the basis or formula on which the pet insurer determines claim
20   payments under a pet insurance policy within the policy prior to
21   policy issuance and through a clear and conspicuous link on the main
22   page of either the pet insurer's website or pet insurer's program
23   administrator's website, or both.
24       (4) A pet insurer that uses a benefit schedule to determine claim
25   payment under a pet insurance policy shall:
26       (a) Clearly disclose the applicable benefit schedule in the
27   policy; and
28       (b) Disclose all benefit schedules used by the pet insurer under
29   its pet insurance policies through a clear and conspicuous link on
30   the main page of either the pet insurer's website or pet insurer's
31   program administrator's website, or both.
32       (5) A pet insurer that determines claim payments under a pet
33   insurance policy based on usual and customary fees or any other
34   reimbursement limitation based on prevailing veterinary service
35   provider charges shall:
36       (a) Include a usual and customary fee limitation provision in the
37   policy that clearly describes the pet insurer's basis for determining
38   usual and customary fees and how that basis is applied in calculating
39   claim payments; and


                                     p. 4                          SB 5319
 1       (b) Disclose the pet insurer's basis for determining usual and
 2   customary fees through a clear and conspicuous link on the main page
 3   of either the pet insurer's website or the pet insurer's program
 4   administrator's website, or both.
 5       (6) If any medical examination by a licensed veterinarian is
 6   required to effectuate coverage, the pet insurer shall clearly and
 7   conspicuously disclose the required aspects of the examination prior
 8   to purchase and disclose that examination documentation may result in
 9   a preexisting condition exclusion.
10       (7) The pet insurer shall disclose waiting periods and the
11   requirements applicable to them clearly and prominently to consumers
12   prior to the policy purchase.
13       (8) The pet insurer shall include a summary of all policy
14   provisions required in this section in a separate document titled
15   "insurer disclosure of important policy provisions."
16       (9) The pet insurer shall post the insurer disclosure of
17   important policy provisions document required in subsection (8) of
18   this section through a clear and conspicuous link on the main page of
19   either the pet insurer's website or the pet insurer's program
20   administrator's website, or both.
21       (10) In connection with the issuance of a new pet insurance
22   policy, the pet insurer shall provide the consumer with a copy of the
23   insurer disclosure of important policy provisions document required
24   in subsection (8) of this section in at least 12-point type when it
25   delivers the policy.
26       (11) At the time a pet insurance policy is issued or delivered to
27   a policyholder, the pet insurer shall include a written disclosure
28   with the following information, printed in 12-point boldface type:
29       (a) The address and customer service telephone number of either
30   the pet insurer or the insurance producer of record, or both; and
31       (b) If the policy was issued or delivered by an insurance
32   producer, a statement advising the policyholder to contact the
33   insurance producer for assistance.
34       (12) The disclosures required in this section are in addition to
35   any other disclosure requirements required by law or regulation.


36       NEW SECTION. Sec. 5. (1) A pet insurer may issue policies that
37   exclude coverage on the basis of one or more preexisting conditions
38   with appropriate disclosure to the consumer. The pet insurer has the


                                     p. 5                          SB 5319
 1   burden of proving that the preexisting condition exclusion applies to
 2   the condition for which a claim is being made.
 3       (2)(a) A pet insurer may issue policies that impose waiting
 4   periods upon effectuation of the policy that do not exceed 30 days
 5   for illnesses or orthopedic conditions not resulting from an
 6   accident. Waiting periods for accidents are prohibited. Waiting
 7   periods may not be applied to renewals of existing coverage.
 8       (b) A pet insurer utilizing a waiting period permitted in (a) of
 9   this subsection shall include a provision in its policy that allows
10   the waiting periods to be waived upon completion of a medical
11   examination. Pet insurers may require the examination to be conducted
12   by a licensed veterinarian after the purchase of the policy.
13       (c) A medical examination under (b) of this subsection must be
14   paid for by the policyholder, unless the policy specifies that the
15   pet insurer will pay for the examination.
16       (d) A pet insurer can specify elements to be included as part of
17   the examination and require documentation thereof, provided the
18   specifications do not unreasonably restrict a consumer's ability to
19   waive the waiting periods listed in (a) of this subsection.
20       (3) A pet insurer may not require a veterinary examination of the
21   covered pet for the insured to have their policy renewed.
22       (4) If a pet insurer includes any prescriptive, wellness, or
23   noninsurance benefits in the policy form, then it is made part of the
24   policy contract and must follow all applicable laws and regulations
25   in the insurance code.
26       (5) An insured's eligibility to purchase a pet insurance policy
27   must not be based on participation, or lack of participation, in a
28   separate wellness program.

29       NEW SECTION. Sec. 6. (1) A pet insurer and insurance producer
30   may not:
31       (a) Market a wellness program as pet insurance; or
32       (b) Market a wellness program during the sale, solicitation, or
33   negotiation of pet insurance.
34       (2) If a wellness program is sold by either a pet insurer or an
35   insurance producer, or both:
36       (a) The purchase of the wellness program may not be a requirement
37   to the purchase of pet insurance;



                                     p. 6                          SB 5319
 1       (b) The costs of the wellness program must be separate and
 2   identifiable from any pet insurance policy sold by either a pet
 3   insurer, an insurance producer, or both;
 4       (c) The terms and conditions for the wellness program must be
 5   separate from any pet insurance policy sold by either a pet insurer,
 6   an insurance producer, or both;
 7       (d) The products or coverages available through the wellness
 8   program may not duplicate products or coverages available through the
 9   pet insurance policy;
10       (e) The advertising of the wellness program may not be misleading
11   and must be in accordance with this section;
12       (f) Either a pet insurer or an insurance producer, or both, must
13   clearly disclose the following to consumers, printed in 12-point
14   boldface type:
15       (i) That wellness programs are not insurance; and
16       (ii) The address and customer service telephone number of either
17   the pet insurer or the insurance producer of record, or both.
18       (3) Coverages included in the pet insurance policy contract
19   described as "wellness" benefits are insurance.
20       (4) If any wellness program undertakes to indemnify another or
21   pay a specified amount upon determinable contingencies, it is
22   transacting in the business of insurance and is subject to the
23   insurance code. This definition is not intended to classify a
24   contract directly between a service provider and a pet owner that
25   only involves the two parties as being the business of insurance
26   unless other indications of insurance also exist.


27       NEW SECTION.   Sec. 7.   (1) An insurance producer may not sell,
28   solicit, or negotiate a pet insurance product until after the
29   producer is appropriately licensed and has completed the required
30   training identified in subsection (3) of this section.
31       (2) An insurer shall ensure that its producers are trained under
32   subsection (3) of this section and that its producers have been
33   appropriately trained on the coverages and conditions of its pet
34   insurance products.
35       (3) The training required under this subsection must include
36   information on the following topics:
37       (a) Preexisting conditions and waiting periods;
38       (b) The differences between pet insurance and noninsurance
39   wellness programs;
                                     p. 7                          SB 5319
 1       (c)   Hereditary   disorders,  congenital  anomalies,   congenital
 2   disorders, chronic conditions, and how pet insurance policies
 3   interact with those conditions or disorders; and
 4       (d)    Rating,   underwriting,   renewal,    and  other    related
 5   administrative topics.
 6       (4) The satisfaction of the training requirements of another
 7   state that are substantially similar to the provisions of subsection
 8   (3) of this section shall satisfy the training requirements in this
 9   state.


10       NEW SECTION. Sec. 8. The insurance commissioner may adopt rules
11   as necessary to implement and administer this chapter.

12       NEW SECTION.   Sec. 9.   Sections 1 through 8 and 10 of this act
13   constitute a new chapter in Title 48 RCW.


14       NEW SECTION.   Sec. 10.   This act takes effect January 1, 2024.

                                    --- END ---




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