Senate Commerce Committee Statement to Senate, No. 3327 — State of New Jersey (February 16, 2023)

Summary

A Senate Commerce Committee statement to the Senate on Senate Bill No. 3327, State of New Jersey, dated February 16, 2023, reporting the bill favorably with committee amendments. As amended, the bill establishes the "Pet Insurance Act," a legal framework for selling pet insurance in the State, with consumer protections on renewals, waiting periods, policy limits and required disclosures of exclusions for preexisting conditions, hereditary disorders, congenital anomalies and chronic conditions. Insurers must prove a preexisting condition limitation applies, and must differentiate pet wellness programs from insurance. The amendments give the insured 30 days, rather than 15 days, to examine and return a policy, and require producers to have an active life, health, or property and casualty license.

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SENATE COMMERCE COMMITTEE

STATEMENT TO

SENATE, No.
3327

with
committee amendments

STATE
OF NEW JERSEY

DATED: FEBRUARY
16, 2023

The
Senate Commerce Committee reports favorably and with committee amendments
Senate Bill No. 3327.

As
amended, 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.

COMMITTEE AMENDMENTS:

The committee amended the bill to:

(1) define the term “insured” to mean the owner of a
pet listed within the pet insurance policy;

(2) clarify that, unless the insured has filed a
claim, the insured has 30 days, rather than 15 days, to examine and return the
pet insurance policy from the date the insured received the policy;

(3) remove the prohibition on an insurance producer
marketing a wellness program during the sale, solicitation, or negotiation of a
pet insurance policy; and

(4) require an insurance producer to hold an active
life, health, or property and casualty license and be in good standing at the
time the producer submits an application to receive a pet insurance license.

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