House File 2527 - Introduced HOUSE FILE 2527 BY AMOS JR. , GAINES , KRESSIG , CAHILL , FORBES , WILBURN , and ISENHART A BILL FOR An Act relating to pet insurance and pet wellness programs. 1 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 2 TLSB 5545YH (4) 90 nls/ko
H.F. 2527 Section 1. NEW SECTION . 515L.1 Definitions. 1 1. For purposes of this chapter: 2 a. Chronic condition means a condition that can be treated 3 or managed, but not cured. 4 b. Congenital anomaly or disorder means a condition 5 that is present from birth, whether inherited or caused by 6 the environment, which may cause or contribute to illness or 7 disease. 8 c. Hereditary disorder means an abnormality that is 9 genetically transmitted from a parent to the parents offspring 10 and that may cause or contribute to illness or disease. 11 d. Insurance producer or producer means a person 12 licensed pursuant to chapter 522B and trained pursuant to 13 section 515L.6 to sell, solicit, or negotiate pet insurance. 14 e. Insurer means an entity qualified and licensed by the 15 insurance division to transact the business of pet insurance 16 in this state. 17 f. Orthopedic condition means a condition that affects 18 the bones, skeletal muscle, cartilage, tendons, ligaments, or 19 joints of a pet. Orthopedic condition includes but is not 20 limited to elbow dysplasia, hip dysplasia, intervertebral disc 21 degeneration, patellar luxation, and ruptured cranial cruciate 22 ligaments. Orthopedic conditions shall not include cancer or 23 metabolic, hemopoietic, or autoimmune diseases. 24 g. Pet insurance means an insurance policy that provides 25 coverage for accidents or illnesses of a pet. 26 h. Preexisting condition means a pets condition for which 27 any of the following are true prior to the effective date of a 28 pet insurance policy or during any waiting period: 29 (1) A veterinarian has provided medical advice regarding 30 the condition. 31 (2) The pet has received previous treatment for the 32 condition. 33 (3) Based on information from verifiable sources, the pet 34 had signs or symptoms directly related to the condition for 35 -1- LSB 5545YH (4) 90 nls/ko 1/ 11
H.F. 2527 which a claim is being made. A condition for which coverage 1 is afforded on a pet insurance policy shall not be considered 2 a preexisting condition on any renewal of the pet insurance 3 policy. 4 i. Veterinarian means a person licensed under chapter 169. 5 j. Veterinary expenses means any costs associated 6 with medical advice, diagnosis, care, or treatment by a 7 veterinarian, or the cost of prescription drugs prescribed by a 8 veterinarian. 9 k. Waiting period means the period of time specified 10 by a pet insurance policy that must transpire before some 11 or all of the coverage under the pet insurance policy shall 12 begin. Waiting period shall not apply to the renewal of a pet 13 insurance policy. 14 l. Wellness program means a subscription or 15 reimbursement-based program that provides goods and services to 16 promote the general health, safety, or well-being of a pet. An 17 entity that offers, promotes, or sells a wellness program to a 18 resident of this state shall not engage in any activity that 19 constitutes the business of insurance in this state. 20 2. The definitions in this section shall apply to the 21 interpretation of any contract for pet insurance entered into 22 in this state. 23 Sec. 2. NEW SECTION . 515L.2 Scope. 24 This chapter shall apply to pet insurance policies that 25 are delivered, issued for delivery, renewed, sold, solicited, 26 negotiated, or offered in this state. 27 Sec. 3. NEW SECTION . 515L.3 Required disclosures. 28 1. Disclosures prior to entering into a contract. An insurer 29 shall disclose to a person prior to entering into a contract 30 for pet insurance all of the following: 31 a. Whether the pet insurance policy excludes coverage due 32 to any of the following: 33 (1) A preexisting condition. 34 (2) A hereditary disorder. 35 -2- LSB 5545YH (4) 90 nls/ko 2/ 11
H.F. 2527 (3) A congenital anomaly or disorder. 1 (4) A chronic condition. 2 b. If the pet insurance policy includes any other 3 exclusions, the pet insurance policy must include a statement 4 that other exclusions may apply, and the applicant should refer 5 to the exclusions section of the pet insurance policy for more 6 information. 7 c. Any waiting period required by the pet insurance policy, 8 any provisions that limit coverage during a waiting period, 9 and any deductibles, coinsurance, or annual or lifetime policy 10 limits. 11 d. Whether the pet insurer reduces coverage or increases 12 premiums based on the policyholders claim history, the age of 13 the covered pet, or a change in the geographic location of the 14 policyholder. 15 e. Whether the underwriting company differs from the brand 16 name used to market and sell the pet insurance. 17 2. Right to examine and return the policy. 18 a. Unless a pet insurance policyholder has filed a claim 19 under a pet insurance policy, the policyholder shall maintain 20 the right to examine and return the policy to the insurer 21 within fifteen days of receipt and to have the policyholders 22 premium refunded if, after examination of the policy, the 23 policyholder is not satisfied for any reason. 24 b. A pet insurance policy shall contain a notice prominently 25 printed on the first page of the policy, and on the first 26 page of any certificates or riders, that includes specific 27 instructions to complete a return. 28 c. A refund issued under paragraph a shall be paid to 29 the policyholder within thirty calendar days after the insurer 30 receives the returned policy. 31 3. Claim payments. An insurer shall clearly disclose 32 a summary description of the basis or formula on which the 33 insurer determines claim payments under the insurers pet 34 insurance policy within the pet insurance policy, prior to 35 -3- LSB 5545YH (4) 90 nls/ko 3/ 11
H.F. 2527 issuance of the pet insurance policy, and on the insurers 1 internet site. 2 4. Benefit schedules. If an insurer uses a benefit schedule 3 to determine claim payments under a pet insurance policy, the 4 insurer shall do all of the following: 5 a. Clearly disclose the applicable benefit schedule within 6 the pet insurance policy. 7 b. Disclose all benefit schedules used by the insurer 8 on the insurers internet site and on the insurers program 9 administrators internet site, if applicable. 10 5. Usual and customary fees. If an insurer determines 11 claim payments under a pet insurance policy based on usual and 12 customary fees, or any other reimbursement limitation based on 13 prevailing veterinary service provider charges, the insurer 14 shall do all of the following: 15 a. Include a usual and customary fee limitation provision in 16 the pet insurance policy that clearly describes the insurers 17 basis for determining usual and customary fees and how that 18 basis is applied in calculating claim payments. 19 b. Disclose the insurers basis for determining usual 20 and customary fees on the insurers internet site and on the 21 insurers program administrators internet site, if applicable. 22 6. Veterinary examinations. If a medical examination by a 23 veterinarian is required for coverage under a pet insurance 24 policy, the insurer shall clearly disclose the required 25 aspects of the examination, and whether documentation from the 26 examination may result in a preexisting condition exclusion. 27 7. Internet site disclosures. A pet insurer shall include 28 a summary of all policy provisions required by subsections 29 1 through 6 in a separate document that is provided to all 30 policyholders upon issuance of the pet insurance policy, and 31 that may be accessed on the main page of the insurers internet 32 site and on the insurers program administrators internet 33 site, if applicable. 34 8. Disclosures upon issuance or delivery. At the time a 35 -4- LSB 5545YH (4) 90 nls/ko 4/ 11
H.F. 2527 pet insurance policy is delivered or issued for delivery, an 1 insurer shall provide a written disclosure to the policyholder 2 that contains all of the following: 3 a. The mailing address, telephone number, and internet site 4 of the department of insurance and financial services. 5 b. The address and customer service telephone number of the 6 insurer, or of the agent or broker of record. 7 c. If the policy is issued or delivered by an agent or 8 broker, a statement advising the policyholder to contact the 9 agent or broker for assistance. 10 d. Any other disclosures required by law or rule. 11 Sec. 4. NEW SECTION . 515L.4 Policy conditions. 12 1. An insurer may issue a pet insurance policy that excludes 13 coverage on the basis of a preexisting condition provided that 14 the insurer complies with the disclosure requirement under 15 section 515L.3, subsection 1, paragraph a . The pet insurer 16 shall have the burden of proving that a preexisting condition 17 exclusion applies to the condition for which a policyholder 18 makes a claim. 19 2. a. An insurer shall not issue a pet insurance policy 20 that imposes any of the following: 21 (1) A waiting period for accidents. 22 (2) A waiting period upon effectuation of the policy that 23 exceeds thirty calendar days for illnesses or orthopedic 24 conditions not resulting from an accident. 25 b. If an insurer issues a pet insurance policy that imposes 26 a waiting period, the insurer shall include a provision in 27 the pet insurance policy allowing for waiver of the waiting 28 period upon completion of a medical examination, paid for by 29 the policyholder unless the pet insurance policy provides 30 otherwise. An insurer may require a medical examination under 31 this paragraph to be conducted by a veterinarian, may specify 32 the elements to be included as part of an examination, and may 33 require documentation of the medical examination. An insurer 34 shall not specify elements to be included as part of the 35 -5- LSB 5545YH (4) 90 nls/ko 5/ 11
H.F. 2527 examination that unreasonably restrict a policyholders ability 1 to waive a waiting period. 2 3. An insurer shall not require a veterinary examination of 3 a pet covered under a pet insurance policy as a condition for 4 the renewal of the pet insurance policy. 5 4. Any prescriptive, wellness, or noninsurance benefits 6 included in a pet insurance policy shall comply with all state 7 insurance laws and rules. 8 Sec. 5. NEW SECTION . 515L.5 Wellness programs. 9 1. An insurer or a producer shall not do any of the 10 following: 11 a. Require a person to participate, or to not participate, 12 in a wellness program as a prerequisite to purchasing a pet 13 insurance policy. 14 b. Market a wellness program as pet insurance. 15 c. Market a wellness program during the offer, sale, 16 solicitation, or negotiation of pet insurance. 17 2. A wellness program sold by an insurer or a producer shall 18 comply with all of the following: 19 a. The costs associated with the wellness program shall be 20 separate and identifiable from any pet insurance policy sold 21 by the insurer or a producer. 22 b. The terms and conditions for the wellness program shall 23 be separate from any pet insurance policy sold by the insurer 24 or a producer. 25 c. The products or coverages available through the wellness 26 program shall not duplicate products or coverages available 27 through a pet insurance policy sold by the insurer or producer. 28 d. The advertising of the wellness program shall not be 29 misleading as to the nature of the wellness program. 30 3. An insurer or a producer that engages in the sale of 31 a wellness program shall clearly disclose to a person prior 32 to the person purchasing the wellness program all of the 33 following: 34 a. A statement that a wellness program is not a pet 35 -6- LSB 5545YH (4) 90 nls/ko 6/ 11
H.F. 2527 insurance policy. 1 b. The mailing address, telephone number, and internet site 2 of the department of insurance and financial services. 3 c. The address and customer service telephone number of the 4 insurer, or of the producer, agent, or broker of record. 5 d. Any coverage included in a pet insurance contract that is 6 described as wellness shall be considered insurance. 7 Sec. 6. NEW SECTION . 515L.6 Insurance producer training. 8 1. An insurance producer shall not sell, solicit, or 9 negotiate pet insurance until the producer has completed 10 training as required by this section and is licensed under 11 chapter 522B. 12 2. An insurer shall require that the insurers insurance 13 producers are trained as required by this section and have been 14 trained on the coverages and conditions of all pet insurance 15 policies offered by the insurer. 16 3. Training for insurance producers shall include 17 information on all of the following topics: 18 a. Preexisting conditions, hereditary disorders, congenital 19 anomalies or disorders, and chronic conditions in pets, and 20 applicable pet insurance coverages. 21 b. Waiting periods required by pet insurance policies, if 22 any. 23 c. Rating, underwriting, renewal, and other related 24 administrative topics as it relates to pet insurance. 25 Sec. 7. NEW SECTION . 515L.7 Rules. 26 The commissioner of insurance may adopt rules pursuant to 27 chapter 17A to administer this chapter. 28 EXPLANATION 29 The inclusion of this explanation does not constitute agreement with 30 the explanations substance by the members of the general assembly. 31 This bill relates to pet insurance policies and wellness 32 programs. 33 The bill applies to pet insurance policies (policies) 34 that are delivered, issued for delivery, renewed, sold, 35 -7- LSB 5545YH (4) 90 nls/ko 7/ 11
H.F. 2527 solicited, negotiated, or offered in this state. Prior to 1 entering into a contract for pet insurance, an insurer shall 2 disclose to a person whether the policy excludes coverage 3 due to a preexisting condition, a hereditary disorder, a 4 congenital anomaly or disorder, a chronic condition, or any 5 other exclusions. Prior to entering into a contract for pet 6 insurance, an insurer shall also disclose to a person any 7 waiting period required by the policy and any limitation on 8 coverage during a waiting period. In addition, the insurer 9 must disclose whether the pet insurer reduces coverage or 10 increases premiums based on the policyholders claim history, 11 the age of the covered pet, or a change in the geographic 12 location of the policyholder, and whether the underwriting 13 company differs from the brand name used to market and sell 14 the pet insurance product. Chronic condition, congenital 15 anomaly or disorder, hereditary disorder, insurer, pet 16 insurance, preexisting condition, and waiting period are 17 defined in the bill. 18 Under the bill, unless a pet insurance policyholder has 19 filed a claim under a policy, the policyholder shall maintain 20 the right to examine and return the policy to the insurer 21 within 15 days of receipt, and to have the policyholders 22 premium refunded if the policyholder is not satisfied for any 23 reason. A policy shall contain a notice that includes specific 24 instructions to complete a return, and any refund issued to a 25 policyholder shall be paid within 30 days after the insurer 26 receives the returned policy. 27 The bill requires an insurer to clearly disclose prior 28 to issuance of a policy, and on the insurers internet site, 29 a summary description of the basis or formula on which the 30 insurer determines claim payments under the policy. An insurer 31 shall also disclose within a policy, and on the insurers 32 internet site, a benefit schedule if the insurer uses a benefit 33 schedule to determine claim payments under a policy, and a 34 usual and customary fee limitation provision if the insurer 35 -8- LSB 5545YH (4) 90 nls/ko 8/ 11
H.F. 2527 determines claim payments under a policy based on usual and 1 customary fees or any other reimbursement limitation based 2 on prevailing veterinary service provider charges. The bill 3 requires an insurer to clearly disclose whether a medical 4 examination by a veterinarian is required for coverage under a 5 policy, the required aspects of the examination, and whether 6 documentation from the examination may result in a preexisting 7 condition exclusion. 8 A pet insurer shall include a summary of all disclosures 9 required by the bill in a separate document that is provided to 10 all policyholders upon issuance of a policy, and that may be 11 accessed on the main page of the insurers internet site. 12 At the time a pet insurance policy is delivered or issued 13 for delivery, an insurer shall provide a written disclosure to 14 the policyholder that contains the mailing address, telephone 15 number, and internet site of the department of insurance and 16 financial services, the address and customer service telephone 17 number of the insurer or of the agent or broker of record, and, 18 if the policy is issued or delivered by an agent or broker, a 19 statement advising the policyholder to contact the agent or 20 broker for assistance. 21 Under the bill, an insurer may issue a policy that excludes 22 coverage on the basis of a preexisting condition provided that 23 the insurer complies with the disclosure requirements. The 24 bill prohibits an insurer from issuing a policy that imposes 25 a waiting period that exceeds 30 calendar days for illnesses 26 or orthopedic conditions not resulting from an accident, or 27 any waiting period for accidents. If an insurer issues a pet 28 insurance policy that imposes a waiting period, the insurer 29 shall include a provision in the pet insurance policy allowing 30 for waiver of the waiting period upon completion of a medical 31 examination pursuant to the requirements in the bill. 32 The bill prohibits an insurer from requiring a veterinary 33 examination of a pet covered under a policy as a condition for 34 the renewal of the policy. The bill requires any prescriptive, 35 -9- LSB 5545YH (4) 90 nls/ko 9/ 11
H.F. 2527 wellness, or noninsurance benefits included in a policy to 1 comply with all state insurance laws. The bill prohibits 2 an insurer from requiring a person to participate, or not 3 to participate, in a wellness program as a prerequisite to 4 purchasing a policy. Wellness program is defined in the 5 bill. 6 The bill prohibits an insurer from marketing a wellness 7 program as pet insurance, or marketing a wellness program 8 during the sale, solicitation, or negotiation of pet insurance. 9 A wellness program sold by an insurer shall keep the costs 10 associated with the wellness program separate and identifiable 11 from any policy sold by the insurer, the terms and conditions 12 for the wellness program shall be separate from any policy 13 sold by the insurer, the products or coverages available 14 through the wellness program shall not duplicate products or 15 coverages available through a policy, and the advertising 16 of the wellness program shall not be misleading as to the 17 nature of the wellness program. An insurer that engages in 18 the sale of a wellness program shall clearly disclose to a 19 person prior to purchasing the wellness program a statement 20 that a wellness program is not an insurance policy, the mailing 21 address, telephone number, and internet site of the department 22 of insurance and financial services, the address and customer 23 service telephone number of the insurer or of the agent or 24 broker of record, and a disclosure that coverages included in 25 the pet insurance contract that are described as wellness shall 26 be considered insurance. 27 The bill prohibits an insurance producer from selling, 28 soliciting, or negotiating a pet insurance product until 29 after the insurance producer is licensed as an insurance 30 producer and has completed training as required by the bill. 31 Insurance producer is defined in the bill. An insurer shall 32 require that insurance producers are trained according to 33 the requirements detailed in the bill, and require that they 34 have also been trained on the coverages and conditions of the 35 -10- LSB 5545YH (4) 90 nls/ko 10/ 11
H.F. 2527 insurers policies. 1 The commissioner of insurance may adopt rules to administer 2 the bill. 3 -11- LSB 5545YH (4) 90 nls/ko 11/ 11