Senate Commerce Committee Statement to Assembly, No. 1203 (1R) — State of New Jersey (March 24, 2025)

Summary

Statement of the Senate Commerce Committee, State of New Jersey, dated March 24, 2025, reporting favorably Assembly Bill No. 1203 (1R), which establishes the "Pet Insurance Act" as a legal framework for selling pet insurance in the State. The bill requires disclosures to consumers, including whether a policy excludes coverage for a preexisting condition, a hereditary disorder, a congenital anomaly or disorder, or a chronic condition. It limits how insurers can deny claims related to preexisting conditions and requires the insurer to prove that a preexisting condition limitation applies. It also requires pet wellness programs to be clearly differentiated from insurance policies and sets training requirements for insurance producers.

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SENATE COMMERCE COMMITTEE

STATEMENT TO

[First Reprint]

ASSEMBLY,
No. 1203

STATE
OF NEW JERSEY

DATED: MARCH
24, 2025

The Senate Commerce Committee reports favorably
Assembly Bill No. 1203 (1R).

This bill establishes the “Pet Insurance Act,” which
creates a comprehensive legal framework within which pet insurance may be sold
in the State.

Under the bill, several consumer protections related
to policy renewals, waiting periods, policy limits, conditions, and benefit
schedules are included, including disclosures a pet insurer transacting pet
insurance must disclose to consumers, such as:

(1) if the policy excludes coverage due to:

(a) a preexisting condition;

(b) a hereditary disorder;

(c) a congenital anomaly or disorder; or

(d) a chronic condition; and

(2) if the policy includes any other exclusions,
using the following statement: “Other exclusions may apply. Please refer to the
exclusions section of the policy for more information.”

The bill provides limits on how insurers can deny pet
insurance claims related to preexisting conditions of covered pets, and
requires the insurer to prove a preexisting condition limitation applies.

The bill additionally provides requirements to
insurers and insurance producers to clearly differentiate pet wellness programs
from insurance policies to eliminate consumer confusion between what services
are covered by insurance.

Finally, the bill provides training requirements for
insurance producers to ensure that producers are appropriately prepared to
present information to consumers. The bill also stipulates that an insurance producer can only be licensed
to sell pet insurance if the producer holds an active life, health, personal
lines, or property and casualty line of authority.

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