California Insurance Commissioner Goes to the Dogs, and the Cats, and the …

For many years California’s Insurance Commissioner has been tasked with reviewing both the cost and implementation of insurance policies sold to California residents.  Traditionally this has focused on those mundane insurance things like auto, home & health – well if A.B. 2056 is signed into law by the Governor, the Insurance Commission will also have the authority to review pet insurance!  A.B. 2056, sponsored by the current Insurance Commissioner Dave Jones, and introduced in February 2014 by Assembly Member Dababneh would require the following:

  1. Require pet insurance policies have specific definitions of terms and disclosures;
  2. Require the policy to specifically state if it excludes coverage for preexisting conditions; hereditary disorders, congenital anomaly or disorder, or chronic conditions.  If there are any other exclusions it must state so and refer the insured to a specific section of the policy to see what other exclusions may apply.
  3. Require the policy to state any limits on coverage through a waiting or affiliation period, a deductible, coinsurance, or an annual or lifetime policy limit.
  4. Whether the insurer reduces coverage or increases premiums based on the insured’s claim history (in other words, if you actually use the insurance will your rate go up).
  5. Require pet insurance companies to explain how they developed their usual and customary fees (the amount they will actually pay) and create a 30-day “free look” period during which the policy can be returned and all money refunded.

A California pet insurance company that violates the provisions of A.B, 2056 could be liable for up to $5,000 per violation and, if it is determined that violation was willful, up to $10,000 per violation.

Now we know that there are not many in the small business community that are in favor of increasing the role of a single elected politician and would certainly question the idea of an elected official sponsoring a bill that would increase their power over businesses, but in this instance as pet parents ourselves creating some clarity in the pet insurance world seems like a good idea to us.  What do you think?

Thanks for reading!