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A03711 Summary:

SPONSORRosenthal L
Add Art 42-A §§4250 - 4255, Ins L
Regulates the issuance of pet insurance policies covering veterinary expenses.
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A03711 Text:

                STATE OF NEW YORK
                               2021-2022 Regular Sessions
                   IN ASSEMBLY
                                    January 28, 2021
        Introduced  by  M.  of  A. L. ROSENTHAL -- read once and referred to the
          Committee on Insurance
        AN ACT to amend the insurance law, in relation to pet insurance
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1.  The insurance law is amended by adding a new article 42-A
     2  to read as follows:
     3                                ARTICLE 42-A
     4                                PET INSURANCE
     5  Section 4250. Definitions.
     6          4251. Applicability.
     7          4252. Coverage disclosures and requirements.
     8          4253. Penalties.
     9          4254. Violations.
    10          4255. Rules and regulations.
    11    § 4250. Definitions. For purposes of this article, the following defi-
    12  nitions shall apply:
    13    (a) "Chronic condition" shall mean a condition that can be treated  or
    14  managed, even if not cured.
    15    (b)  "Congenital  anomaly  or disorder" shall mean a condition that is
    16  present from birth, whether inherited  or  caused  by  the  environment,
    17  which,  to  a reasonable medical certainty, has been determined to cause
    18  or otherwise contribute to illness or disease.
    19    (c) "Hereditary disorder" shall mean an  abnormality  that  is  genet-
    20  ically  transmitted  from  parent  to  offspring  which, to a reasonable
    21  medical certainty, has been determined to cause illness or disease.
    22    (d) "Pet insurance" shall mean insurance, whether  provided  under  an
    23  individual  or group insurance policy that provides coverage for veteri-
    24  nary expenses.
    25    (e) "Pet insurer" shall mean a company or organization  who  issues  a
    26  policy of pet insurance.

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

        A. 3711                             2
     1    (f)  "Preexisting condition" shall mean any condition, whether curable
     2  or incurable, which existed or presented on or before the pet  insurance
     3  policy  effective date, whether or not a veterinarian provided a medical
     4  diagnosis or for which the pet received treatment.
     5    (g)  "Veterinarian" shall mean an individual who holds a valid license
     6  to practice veterinary medicine from an appropriate licensing entity  in
     7  the jurisdiction in which he or she practices.
     8    (h) "Veterinary expenses" shall mean the costs associated with veteri-
     9  nary medical advice, diagnosis, care, treatment or alternative therapies
    10  provided  by  a veterinarian, including, but not limited to, the cost of
    11  drugs prescribed by a veterinarian.
    12    (i) "Waiting period" shall mean the period  of  time  specified  in  a
    13  policy of pet insurance before coverage begins under such policy.
    14    §  4251.  Applicability.  A  policy of pet insurance that is marketed,
    15  issued, amended, renewed, or delivered, whether or not in New York, to a
    16  New York resident, on and after July  first,  two  thousand  twenty-two,
    17  regardless  of  the  situs of the contract or group policyholder, or the
    18  jurisdiction in which the contract was issued or delivered,  is  subject
    19  to this article.
    20    §  4252.  Coverage disclosures and requirements.  (a) No policy of pet
    21  insurance to which this article applies may be  issued  if  such  policy
    22  excludes  any  of  the following: a pre-existing condition; a congenital
    23  anomaly or disorder; a hereditary disorder; or a chronic condition.
    24    (b) (1) Exclusions  from  coverage  other  than  those  set  forth  in
    25  subsection  (a) of this section are permissible if prominently disclosed
    26  following the statement: "Exclusions may  apply.  Please  refer  to  the
    27  exclusions section of the policy for more information."
    28    (2)  If  any  policy  of  pet  insurance to which this article applies
    29  provides a limit on coverage through a  waiting  period,  a  deductible,
    30  co-insurance  or an annual or lifetime policy limit, the following shall
    31  apply:
    32    (i) the waiting period for accident coverage shall not exceed one  day
    33  after  purchase or payment of the initial premium. Except as provided in
    34  the preceding sentence (relating to accident coverage), there  shall  be
    35  no waiting period;
    36    (ii) the deductible, if any, shall be an annual deductible; and
    37    (iii) the waiting period, deductible, co-insurance requirements and/or
    38  annual  or lifetime limits, if any, shall be prominently disclosed. Such
    39  disclosure shall appear or be summarized on the first page of such poli-
    40  cy or shall be referred to on the first page in a  manner  that  clearly
    41  indicates where such provisions appear in such policy.
    42    (3) If such policy provides for any other exclusion from or limitation
    43  on  coverage,  the  following  statement  shall be included in bold font
    44  large enough to be easily visible: "Other exclusions or limitations  may
    45  apply.  Please  refer  to  the exclusions section of the policy for more
    46  information."
    47    (4) Review of denied claims shall be handled  by  a  veterinarian  and
    48  determinations  shall  be made based on a standard of reasonable medical
    49  certainty. In the event a claim has been denied following an initial  or
    50  first  level  review, a secondary review shall be handled by an unaffil-
    51  iated, independent veterinarian.
    52    (c) Coverage under a policy of pet insurance  to  which  this  article
    53  applies:
    54    (1)  Shall  be  continuous so long as premiums are paid, regardless of
    55  any change of ownership of the covered animal; and each  policy  of  pet

        A. 3711                             3
     1  insurance  shall  be  transferable and be assignable to a new owner of a
     2  covered animal.
     3    (2) Renewal of a policy of pet insurance to which this article applies
     4  shall  not  be  denied  based  on  claims  history or age of the covered
     5  animal.
     6    (3) Premiums for a policy of pet  insurance  shall  not  be  increased
     7  based on claims history.
     8    (4) Premium increases shall be approved by the superintendent and such
     9  approval shall be made available to the public at least sixty days prior
    10  to the effective date of such increase.
    11    (d)  If a pet insurer uses any of the definitional terms of this arti-
    12  cle in a policy of pet insurance, the insurer shall use the  definitions
    13  of  those  terms as set forth in this article and include the definition
    14  of the term in the policy. The pet insurer shall  also  make  the  defi-
    15  nition available through a link on the main page of the insurer's inter-
    16  net website.
    17    (e)  A pet insurer shall clearly disclose a summary description of the
    18  basis or formula on which the insurer determines claim payments under  a
    19  pet  insurance  policy  within the policy and through a link on the main
    20  page of the insurer's internet website.
    21    (f) A pet insurer that uses a  benefit  schedule  to  determine  claim
    22  payments under a pet insurance policy shall do both of the following:
    23    (1)  clearly  disclose  the applicable benefit schedule in the policy;
    24  and
    25    (2) disclose all benefit schedules used by the insurer under  its  pet
    26  insurance  policies  through  a  link  on the main page of the insurer's
    27  internet website.
    28    (g) A pet insurer that determines claim payments under a pet insurance
    29  policy based on usual and customary fees,  or  any  other  reimbursement
    30  limitation  based  on  prevailing  veterinary  service provider charges,
    31  shall do both of the following:
    32    (1) include a usual and customary  fee  limitation  provision  in  the
    33  policy  that clearly describes the insurer's basis for determining usual
    34  and customary fees and how that basis is applied  in  calculating  claim
    35  payments; and
    36    (2)  disclose  the insurer's basis for determining usual and customary
    37  fees through a link on the main page of the insurer's internet website.
    38    (h) Any pet insurer that issues a policy of pet insurance  subject  to
    39  this  article  shall  be prohibited from imposing any limitations on the
    40  type of legal remedies that policyholders may seek to pursue for  resol-
    41  ution of disputes relating to such policy, including denials of coverage
    42  at any stage. No pet insurer may limit or attempt to limit resolution of
    43  disputes  by  policyholders  to binding arbitration, so as to preclude a
    44  policyholder from seeking remedies in courts of law.
    45    (i) The pet insurer shall create a summary of  all  policy  provisions
    46  required  in  this  section  into  a  separate  document titled "Insurer
    47  Disclosure of Important Policy Provisions".
    48    (j) The insurer shall post the "Insurer Disclosure of Important Policy
    49  Provisions" document required in this section through a link on the main
    50  page of the pet insurer's internet website.
    51    (k) (1) In connection with the issuance of a new pet insurance policy,
    52  the pet insurer shall provide the consumer with a copy of  the  "Insurer
    53  Disclosure of Important Policy Provisions" document required pursuant to
    54  this section in at least twelve point type when it delivers the policy.
    55    (2)  In  addition, the pet insurance policy shall have clearly printed
    56  thereon or attached thereto a notice stating that, after receipt of  the

        A. 3711                             4
     1  policy  by  the owner, the policy may be returned to the pet insurer for
     2  cancellation by delivering it or mailing it to the pet insurer or to the
     3  agent through whom it was purchased.
     4    (i)  The period of time set forth by the pet insurer for return of the
     5  policy, the free look period, shall be clearly stated on the notice  and
     6  shall not be less than thirty days.
     7    (ii)  The  delivery or mailing of the policy to the pet insurer by the
     8  pet insurance policyholder pursuant to this section shall void the poli-
     9  cy from the beginning, and the parties shall be in the same position  as
    10  if a policy or contract had not been issued.
    11    (iii)  All  premiums paid and any policy fee paid for a policy that is
    12  cancelled during the free look period  shall  be  refunded  to  the  pet
    13  insurance  policyholder  within  thirty  days from the date that the pet
    14  insurer is notified of the cancellation.   However, if the  pet  insurer
    15  has  paid  any  claim,  or has advised the pet insurance policyholder in
    16  writing that a claim will be paid, the thirty day free look right pursu-
    17  ant to this section is inapplicable and instead  the  policy  provisions
    18  relating to cancellation apply to any refund.
    19    (l)  The  disclosures required in this section shall be in addition to
    20  any other disclosure requirements required by law or regulation.
    21    § 4253. Penalties.  (a) A person who violates any  provision  of  this
    22  article  is  liable to the state for a civil penalty to be determined by
    23  the superintendent,  not  to  exceed  five  thousand  dollars  for  each
    24  violation,  or,  if  the  violation  was willful, a civil penalty not to
    25  exceed ten thousand dollars for each violation.  The superintendent  may
    26  establish  the acts that constitute a distinct violation for purposes of
    27  this section. However, when the issuance, amendment, or servicing  of  a
    28  policy  or  endorsement  is  inadvertent, all of those acts constitute a
    29  single violation for purposes of this section.
    30    (b) The penalty imposed by this section shall be imposed by and deter-
    31  mined by the superintendent. The penalty  imposed  by  this  section  is
    32  appealable.
    33    § 4254. Violations.  (a) Whenever the superintendent shall have reason
    34  to  believe  that  a person has engaged or is engaging in a violation of
    35  this article, and that a proceeding by  the  superintendent  in  respect
    36  thereto  would  be  to the interest of the public, he or she shall issue
    37  and serve upon that person an order to show cause containing a statement
    38  of the charges in that respect, a statement of that  person's  potential
    39  liability  under this part, and a notice of a hearing thereon to be held
    40  at a time and place fixed therein, which shall not be less  than  thirty
    41  days  after  the service thereof, for the purpose of determining whether
    42  the superintendent should issue an order  to  that  person  to  pay  the
    43  penalty  imposed  by this article and to cease and desist those methods,
    44  acts, or practices, or any of them, that violate this article.
    45    (b) If the charges are found to be justified, the superintendent shall
    46  issue and cause to be served upon that person an  order  requiring  that
    47  person  to  pay  the  penalty  imposed  by this article and to cease and
    48  desist from engaging in those methods, acts, or practices found to be in
    49  violation of this article.
    50    (c) Hearings shall be conducted according to the procedure  designated
    51  by  the superintendent.  However, the superintendent shall not interfere
    52  with or abridge the rights of a pet insurance  policyholder's  right  to
    53  seek remedies in a court of law.
    54    (d) Parties to such hearings shall be entitled to have the proceedings
    55  and  the  order  reviewed  by means of any remedy provided by the super-
    56  intendent.

        A. 3711                             5
     1    (e) The jurisdiction of the superintendent shall not be exclusive  and
     2  nothing in this article shall be deemed to preclude review by the attor-
     3  ney general of the state of New York.
     4    §  4255.  Rules and regulations.  The superintendent may adopt reason-
     5  able rules and regulations, as are necessary to administer this article,
     6  in accordance with existing procedures under this chapter,  however,  no
     7  rules  or  regulations  may  interfere  with  or abridge a pet insurance
     8  policyholder's right to seek remedies in a court of law.
     9    § 2. This act shall take effect on the thirtieth day  after  it  shall
    10  have become a law.
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