The pandemic ramped up the already-excelling pet insurance market (growing by an average of more than 20% from 2015-2019, insuring 2.82 million pets by the end of 2019), and insurance carriers have made swift moves to provide the coverage pet owners are looking for. Pet insurers saw a “tremendous spike in enrollment” throughout 2020, as many Americans looked to their furry animals for companionship.
The industry’s exponential growth has brought some logistical issues for pet insurers, but the demand only keeps growing. Currently, there are no federal-level guidelines or regulations around pet insurance so coverage varies state by state, and only 3% of pets are covered. The NAIC’s Pet Insurance Working Group stated in March 2021 that they were developing a Pet Insurance Model Act based largely on California’s existing pet insurance law, as the state has been the most proactive in adapting insurance conditions to include broader coverage.
In April 2021, the Working Group approved language which places the burden of proving that a pre-existing condition exclusion applied to the condition for which a claim is made on the insurer. The team also approved language that would prevent a condition for which coverage is afforded on a policy to be a considered pre-existing condition on any renewal of that policy.
According to the agency, a proposal has been in the works since 2016 but has excelled their efforts in the past year. Here are a few reasons why the NAIC wanted to take the reins on the pet insurance sector.