Fiscal Note — 1078 HB, Pet Insurance (Office of Insurance Commissioner)
Summary
This is an Individual State Agency Fiscal Note for Bill Number 1078 HB, titled Pet insurance, prepared by agency 160, the Office of Insurance Commissioner. Part I lists estimated operating expenditures from the Insurance Commissioners Regulatory Account-State and marks the box that the fiscal impact is less than $50,000 per fiscal year. Part II describes Section 1(6), which prohibits a pet insurer from cancelling or refusing to renew a pet insurance policy based on the covered pet's age, among other grounds. Near the end, the note assumes enforcement work of 80 hours per year of an Insurance Attorney.
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“Fiscal Note — 1078 HB, Pet Insurance (Office of Insurance Commissioner).”
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Individual State Agency Fiscal Note
Bill Number: 1078 HB Title: Pet insurance Agency: 160-Office of Insurance
Commissioner
Part I: Estimates
No Fiscal Impact
Estimated Cash Receipts to:
NONE
Estimated Operating Expenditures from:
FY 2026 FY 2027 2025-27 2027-29 2029-31
FTE Staff Years 0.2 0.1 0.1 0.1 0.1
Account
Insurance Commissioners Regulatory 32,631 10,156 42,787 20,312 20,312
Account-State 138-1
Total $ 32,631 10,156 42,787 20,312 20,312
Estimated Capital Budget Impact:
NONE
The cash receipts and expenditure estimates on this page represent the most likely fiscal impact. Factors impacting the precision of these estimates,
and alternate ranges (if appropriate), are explained in Part II.
Check applicable boxes and follow corresponding instructions:
If fiscal impact is greater than $50,000 per fiscal year in the current biennium or in subsequent biennia, complete entire fiscal note
form Parts I-V.
X If fiscal impact is less than $50,000 per fiscal year in the current biennium or in subsequent biennia, complete this page only (Part I).
Capital budget impact, complete Part IV.
Requires new rule making, complete Part V.
Legislative Contact: Megan Mulvihill Phone: 360-786-7304 Date: 01/08/2025
Agency Preparation: Dory Nicpon Phone: 360-725-7261 Date: 01/13/2025
Agency Approval: Joyce Brake Phone: 360-725-7041 Date: 01/13/2025
OFM Review: Jason Brown Phone: (360) 742-7277 Date: 01/16/2025
Form FN (Rev 1/00) 196,378.00 Request # 25-07-1
FNS063 Individual State Agency Fiscal Note 1 Bill # 1078 HB
Part II: Narrative Explanation
II. A - Brief Description Of What The Measure Does That Has Fiscal Impact
Significant provisions of the bill and any related workload or policy assumptions that have revenue or expenditure impact on the responding agency by
section number.
Section 1(6) prohibits a pet insurer from cancelling or refusing to renew a pet insurance policy based on any one or more of
the following:
• The covered pet's age;
• The detection or development of a health condition during a covered policy period including, but not limited to, a chronic
condition, an orthopedic condition, a congenital anomaly, a hereditary disorder; or
• Any other health condition that might overwise constitute a preexisting condition as defined in RCW 48.205.020.
Section 1(7) requires that if an insurer ceases writing pet insurance through one affiliated company and moves that business
to another affiliated company, current policy holders must receive an offer of insurance from the affiliated company.
Additionally, the provision prohibits the affiliated company from doing any of the following:
• Impose a waiting period on the new policy;
• Require a veterinary examination of the covered pet in order to issue or subsequently renew the policy; or
• Cancel, refuse to issue, or refuse to renew the new pet insurance policy for any reason under subsection (6).
II. B - Cash receipts Impact
Cash receipts impact of the legislation on the responding agency with the cash receipts provisions identified by section number and when appropriate, the
detail of the revenue sources. Description of the factual basis of the assumptions and the method by which the cash receipts impact is derived. Explanation
of how workload assumptions translate into estimates. Distinguished between one time and ongoing functions.
II. C - Expenditures
Agency expenditures necessary to implement this legislation (or savings resulting from this legislation), with the provisions of the legislation that result in
the expenditures (or savings) identified by section number. Description of the factual basis of the assumptions and the method by which the expenditure
impact is derived. Explanation of how workload assumptions translate into cost estimates. Distinguished between one time and ongoing functions.
Section 1(6) prohibits a pet insurer from cancelling or refusing to renew a pet insurance policy based on any one or more of
the following:
• The covered pet's age;
• The detection or development of a health condition during a covered policy period including, but not limited to, a chronic
condition, an orthopedic condition, a congenital anomaly, a hereditary disorder; or
• Any other health condition that might overwise constitute a preexisting condition as defined in RCW 48.205.020.
Section 1(6) will require pet insurance product form filings to be updated to address the prohibitions on cancelling or
renewing pet insurance policies; and will also require the revision of approximately 40% (approximately 60% of rate plans
are currently updated each year) of the active pet insurance rate plans. The Office of Insurance Commissioner (OIC) will
require one-time costs, in FY2026, of 8 hours of a Functional Program Analyst 4 to update filing review standards, update
checklist documents and filings instructions, and train staff. There are currently 188 approved pet insurance product form
filings and an estimated 11 (28 active rating plans x 40%) active pet insurance rate plans that will need to be revised. The
OIC estimates it will take one hour to review each updated pet insurance policy form filing and four hours to review each
revised rate plan filing requiring one-time costs of 188 hours (188 form filings x 1 hour) of a Functional Program Analyst 4
and 44 hours (11 rate plans x 4 hours) of an Actuarial Analyst 3 in FY2026.
Section 1(7) requires that if an insurer ceases writing pet insurance through one affiliated company and moves that business
to another affiliated company, current policy holders must receive an offer of insurance from the affiliated company.
Additionally, the provision prohibits the affiliated company from doing any of the following:
• Impose a waiting period on the new policy;
• Require a veterinary examination of the covered pet in order to issue or subsequently renew the policy; or
• Cancel, refuse to issue, or refuse to renew the new pet insurance policy for any reason under subsection (6).
Pet insurance 160-Office of Insurance Commissioner
Form FN (Rev 1/00) 196,378.00 Request # 25-07-1
FNS063 Individual State Agency Fiscal Note 2 Bill # 1078 HB
The OIC anticipates the new requirements in the subsection (6) and (7) will attract additional consumer interest/market for
pet insurance due to the growing nature of the market. The OIC estimates it will receive three additional insurance product
filings per year and that each product filing will take 2.5 hours of review requiring 7.5 hours (3 filings x 2.5 hours) of a
Functional Program Analyst 4 beginning in FY2026.
The provisions in Section 1 will lead to an increase in enforcement actions in situations where an insurer does not comply
with the requirements within the bill. The OIC anticipates an average of an additional 2 enforcement cases per year to
address compliance issues. For purposes of this fiscal note, it is assumed that enforcement actions will require the
equivalent of approximately 40 hours per case, requiring 80 hours (2 cases x 40 hours) per year of an Insurance Attorney
beginning in FY2026.
Ongoing Costs:
Salary, benefits and associated costs for .01 FTE Functional Program Analyst 4 and .05 FTE Insurance Attorney.
Part III: Expenditure Detail
III. A - Operating Budget Expenditures
Account Account Title Type FY 2026 FY 2027 2025-27 2027-29 2029-31
138-1 Insurance State 32,631 10,156 42,787 20,312 20,312
Commissioners
Regulatory Account
Total $ 32,631 10,156 42,787 20,312 20,312
III. B - Expenditures by Object Or Purpose
FY 2026 FY 2027 2025-27 2027-29 2029-31
FTE Staff Years 0.2 0.1 0.1 0.1 0.1
A-Salaries and Wages 19,693 6,197 25,890 12,394 12,394
B-Employee Benefits 6,412 1,928 8,340 3,856 3,856
C-Professional Service Contracts
E-Goods and Other Services 6,526 2,031 8,557 4,062 4,062
G-Travel
J-Capital Outlays
M-Inter Agency/Fund Transfers
N-Grants, Benefits & Client Services
P-Debt Service
S-Interagency Reimbursements
T-Intra-Agency Reimbursements
9-
Total $ 32,631 10,156 42,787 20,312 20,312
III. C - Operating FTE Detail: List FTEs by classification and corresponding annual compensation. Totals need to agree with total FTEs in
Part I and Part IIIA
Job Classification Salary FY 2026 FY 2027 2025-27 2027-29 2029-31
Actuarial Analyst 3 103,008 0.0 0.0
Functional Program Analyst 4 86,712 0.1 0.0 0.1 0.0 0.0
Insurance Attorney 106,608 0.1 0.1 0.1 0.1 0.1
Total FTEs 0.2 0.1 0.1 0.1 0.1
III. D - Expenditures By Program (optional)
NONE
Pet insurance 160-Office of Insurance Commissioner
Form FN (Rev 1/00) 196,378.00 Request # 25-07-1
FNS063 Individual State Agency Fiscal Note 3 Bill # 1078 HB
Part IV: Capital Budget Impact
IV. A - Capital Budget Expenditures
NONE
IV. B - Expenditures by Object Or Purpose
NONE
IV. C - Capital Budget Breakout
Acquisition and construction costs not reflected elsewhere on the fiscal note and description of potential financing methods.
NONE
IV. D - Capital FTE Detail: FTEs listed by classification and corresponding annual compensation. Totals agree with total FTEs in Part IVB.
NONE
Part V: New Rule Making Required
Provisions of the bill that require the agency to adopt new administrative rules or repeal/revise existing rules.
Pet insurance 160-Office of Insurance Commissioner
Form FN (Rev 1/00) 196,378.00 Request # 25-07-1
FNS063 Individual State Agency Fiscal Note 4 Bill # 1078 HB
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