RELATING TO PET INSURANCE.

SB1026

THE SENATE

S.B. NO.

1026

THIRTY-THIRD LEGISLATURE, 2025

STATE OF HAWAII

A BILL FOR AN ACT

relating
to PET insurance
.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

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SECTION
1.
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Chapter 431, Hawaii Revised Statutes,
is amended by adding a new article to be appropriately designated and to read
as follows:

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ARTICLE

PET
INSURANCE

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431: -101
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Short title.
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This article shall be known and may be cited
as the Hawaii Pet Insurance Act.

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�431: -102
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Scope and purpose.
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(a)
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The purpose of this article
is to promote the public welfare by creating a comprehensive legal framework
within which pet insurance may be sold in this State.

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(b)
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The requirements of this article shall apply to pet insurance policies
that are issued to any resident of this State, and are sold, solicited,
negotiated, or offered in this State, and policies or certificates that are
delivered or issued for delivery in this State.

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(c)
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All
other applicable provisions of this State's insurance laws shall continue to
apply to pet insurance except that the specific provisions of this article
shall supersede any general provisions of law that would otherwise be
applicable to pet insurance.

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(d)
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Nothing in this article shall in any way
prohibit or limit the types of exclusions pet insurers may use in their
policies or require pet insurers to have any of the limitations or exclusions
defined in section 431: -103.

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431: -103
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Definitions.
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As used in this article, unless the context
clearly indicates otherwise:

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"Chronic
condition" means a condition that can be treated or managed, but not
cured.

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"Congenital
anomaly or disorder" means a condition that is present from birth, whether
inherited or caused by the environment, which may cause or contribute to
illness or disease.

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"Hereditary
disorder" means an abnormality that is genetically transmitted from parent
to offspring and may cause illness or disease.

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"Orthopedic"
means conditions affecting the bones, skeletal muscle, cartilage, tendons,
ligaments, and joints.
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"Orthopedic"
includes but is not limited to elbow dysplasia, hip dysplasia, intervertebral
disc degeneration, patellar luxation, and ruptured cranial cruciate ligaments.
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"Orthopedic" does not include
cancers or metabolic, hemopoietic, or autoimmune diseases.

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"Pet
insurance" means a property insurance policy that provides coverage for
accidents and illnesses of pets.

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"Preexisting
condition" means any condition for which any of the following are true
before the effective date of a pet insurance policy or during any waiting
period:

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(1)
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A veterinarian provided medical advice;

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(2)
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The pet received previous treatment; or

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(3)
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Based on information from verifiable sources,
the pet had signs or symptoms directly related to the condition for which a
claim is being made.

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"Renewal"
means to issue and deliver at the end of an insurance policy period a policy that
supersedes a policy previously issued and delivered by the same pet insurer or
affiliated pet insurer and that provides types and limits of coverage
substantially similar to those contained in the policy being superseded.

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"Veterinarian"
means an individual who holds a valid license to practice veterinary medicine under
chapter 471.

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"Veterinary
expenses" means the costs associated with medical advice, diagnosis, care,
or treatment provided by a veterinarian, including but not limited to the cost
of drugs prescribed by a veterinarian.

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"Waiting
period" means the period of time specified in a pet insurance policy that
is required to transpire before some
or all of the coverage in the policy can begin.

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"Wellness program"
means a subscription- or reimbursement-based program that is separate from an
insurance policy that provides goods and services to promote the general
health, safety, or wellbeing of the pet.

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431: -104
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Disclosures.
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(a)
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A
pet insurer transacting
pet insurance shall disclose the following to
consumers:

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(1)
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Whether the policy excludes coverage due to
any of the following:

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(A)
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A preexisting condition;

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(B)
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A hereditary disorder;

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(C)
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A congenital anomaly or disorder; or

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(D)
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A chronic condition;

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(2)
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If the policy includes any other exclusions,
the following statement:
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"Other
exclusions may apply.
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Please refer to
the exclusions section of the policy for more information.";

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(3)
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Any policy provision that limits coverage
through a waiting period, affiliation period, a deductible, coinsurance, or an
annual or lifetime policy limit;

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(4)
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Whether the pet insurer reduces coverage or
increases premiums based on the consumer's claim history, the age of the
covered pet, or a change in the geographic location of the covered pet; and

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(5)
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Whether the underwriting company differs from
the brand name used to market and sell the product.

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(b)
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Unless the consumer has filed a claim under
the pet insurance policy, pet insurance applicants shall have the right to
examine and return the policy, certificate, or rider to the pet insurer or an
agent or producer of the pet insurer within fifteen days of its receipt and to
have the premium refunded if, after examination of the policy, certificate, or
rider, the applicant is not satisfied for any reason.

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Pet
insurance policies, certificates, and riders shall have a notice prominently
printed on the first page or attached to the first page including specific
instructions to accomplish a return.
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The
following free look statement or language substantially similar shall be
included:

"You have 15 days from the day
you receive this policy, certificate, or rider to review it and return it to
the pet insurer if you decide not to keep it.
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You do not have to tell the pet insurer why
you are returning it.
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If you decide not
to keep it, simply return it to the pet insurer at its administrative office or
you may return it to the agent/insurance producer that you bought it from as
long as you have not filed a claim.
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You
must return it within 15 days of the day you first received it.
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The pet insurer will refund the full amount of
any premium paid within 30 days after it receives the returned policy,
certificate, or rider.
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The premium
refund will be sent directly to the person who paid it.
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The policy, certificate, or rider will be void
as if it had never been issued."

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(c)
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A pet insurer shall clearly disclose a
summary description of the basis or formula on which the pet insurer determines
claim payments under a pet insurance policy within the policy, before policy
issuance and through a clear and conspicuous link on the main page of the pet
insurer's or pet insurer's program administrator's website.

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(d)
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A pet insurer that uses a benefit schedule to
determine claim payment under a pet insurance policy shall:

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(1)
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Clearly disclose the applicable benefit
schedule in the policy; and

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(2)
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Disclose all benefit schedules used by the pet
insurer under its pet insurance policies through a clear and conspicuous link
on the main page of the pet insurer's or pet insurer's program administrator's
website.

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(e)
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A pet insurer that determines claim payments
under a pet insurance policy based on usual and customary fees, or any other
reimbursement limitation based on prevailing veterinary service provider
charges, shall:

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(1)
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Include a usual and customary fee limitation
provision in the policy that clearly describes the pet insurer's basis for
determining usual and customary fees and how that basis is applied in
calculating claim payments; and

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(2)
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Disclose the pet insurer's basis for
determining usual and customary fees through a clear and conspicuous link on
the main page of the pet insurer's or pet insurer's program administrator's
website.

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(f)
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If any medical examination by a veterinarian
is required to effectuate coverage, the pet insurer shall clearly and
conspicuously disclose the required aspects of the examination prior to
purchase and disclose that examination documentation may result in a
preexisting condition exclusion.

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(g)
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Waiting periods, and the requirements
applicable to the waiting periods, shall be clearly and prominently disclosed
to consumers before the policy purchase.

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(h)
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The pet insurer shall include a summary of
all policy provisions required in subsections (a) through (g), inclusive, in a
separate document titled "Insurer Disclosure of Important Policy
Provisions".

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(i)
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The pet insurer shall post the insurer
disclosure of important policy provisions document required in subsection (h)
through a clear and conspicuous link on the main page of the pet insurer's or
pet insurer's program administrator's website.

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(j)
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In connection with the issuance of a new pet
insurance policy, the pet insurer shall provide the consumer with a copy of the
insurer disclosure of important policy provisions document required pursuant to
subsection (h) in at least twelve-point type when the pet insurer delivers the
policy.

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(k)
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At the time a pet insurance policy is issued
or delivered to a policyholder, the pet insurer shall include a written
disclosure with the following information, printed in twelve-point boldface
type:

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(1)
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The insurance division's mailing address,
toll-free telephone number, and website address;

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(2)
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The address and customer service telephone
number of the pet insurer or the agent or broker of record; and

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(3)
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If the policy was issued or delivered by an
agent or broker, a statement advising the policyholder to contact the broker or
agent for assistance.

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(l)
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The disclosures required in this section
shall be in addition to any other disclosure requirements required by law or rule.

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431: -105
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Policy conditions.
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(a)
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If
a pet insurer uses any of the terms in this article in a policy of pet
insurance, the pet insurer shall use the definition of each of those terms as
set forth in section 431: -103 and include the definition of
the term in the policy.
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The pet insurer
shall also make the definition available through a clear and conspicuous link
on the main page of the pet insurer's or pet insurer's program administrator's
website.

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(b)
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A pet insurer may issue policies that exclude
coverage on the basis of one or more preexisting conditions with appropriate
disclosure to the consumer.
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The pet
insurer has the burden of proving that the preexisting condition exclusion
applies to the condition for which a claim is being made.
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A condition for which coverage is afforded on
a policy shall not be considered a preexisting condition on any renewal of the
policy.

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(c)
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A pet insurer may issue policies that impose
waiting periods upon effectuation of the policy that do not exceed thirty days
for illnesses or orthopedic conditions not resulting from an accident.
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Waiting periods shall not be applied to
renewals of existing coverage.
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Waiting
periods for accidents shall be prohibited.

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A pet
insurer utilizing a waiting period permitted under this subsection shall
include a provision in its contract that allows the waiting periods to be
waived upon completion of a medical examination.
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Pet insurers may require the examination to be
conducted by a veterinarian after the purchase of the policy.
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The medical examination for the waiver shall
be paid for by the policyholder, unless the policy specifies that the pet
insurer will pay for the examination.
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A
pet insurer can specify elements to be included as part of the examination and
require documentation of the examination; provided that the specifications shall
not unreasonably restrict a consumer's ability to waive the waiting period
under this subsection.

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Waiting
periods, and the requirements applicable to the waiting periods, shall be
clearly and prominently disclosed to consumers before the policy purchase.

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(d)
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A pet insurer shall not require a veterinary
examination of the covered pet for the consumer to have the policy renewed.

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(e)
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If a pet insurer includes any prescriptive,
wellness, or non-insurance benefits in the policy form, then the benefits shall
be made part of the policy contract and shall follow all applicable laws and rules
in this chapter.

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(f)
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A consumer's eligibility to purchase a pet
insurance policy shall not be based on participation, or lack of participation,
in a separate wellness program.

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431: -106
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Sales practices for wellness programs; when
deemed insurance.
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(a)
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A pet insurer or producer shall not:

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(1)
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Market a wellness program as pet insurance; or

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(2)
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Market a wellness program during the sale,
solicitation, or negotiation of pet insurance.

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(b)
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If a wellness program is sold by a pet
insurer or producer:

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(1)
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The purchase of the wellness program shall not
be a requirement to the purchase of pet insurance;

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(2)
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The costs of the wellness program shall be
separate and identifiable from any pet insurance policy sold by a pet insurer
or producer;

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(3)
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The terms and conditions for the wellness
program shall be separate from any pet insurance policy sold by a pet insurer or
producer;

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(4)
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The products or coverages available through
the wellness program shall not duplicate products or coverages available
through the pet insurance policy;

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(5)
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The advertising of the wellness program shall
not be misleading and shall be in accordance with this subsection; and

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(6)
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A pet insurer or producer shall clearly
disclose the following to consumers, printed in twelve-point boldface type:

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(A)
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That wellness programs are not insurance;

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(B)
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The address and customer service telephone
number of the pet insurer or producer or broker of record; and

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(C)
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The insurance division's mailing address,
toll-free telephone number, and website address.

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(c)
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Coverages included in the pet insurance
policy contract described as "wellness" benefits shall be deemed
insurance.

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(d)
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If a
wellness program undertakes to indemnify another or pays a
specified amount upon determinable contingencies, the wellness program shall be
deemed transacting the business of insurance as defined in section 431:1-215 and
shall be subject to this chapter.

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(e)
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A wellness program shall not be construed to classify a
contract that is directly between a service provider and a pet owner and only
involves the two parties as transacting the business of insurance as defined in
section 431:1-215, unless other indications of insurance also exist.

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431: -107
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Producer training.
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(a)
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A producer
shall not sell, solicit, or negotiate a pet insurance product until after the
producer is appropriately licensed and has completed the required training
identified in subsection (c).

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(b)
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An insurer shall ensure that its producers
are trained under subsection (c) and that its producers have been appropriately
trained on the coverages and conditions of its pet insurance products.

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(c)
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The training required under this section
shall include information on the following topics:

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(1)
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Preexisting conditions and waiting periods;

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(2)
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The differences between pet insurance and noninsurance
wellness programs;

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(3)
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Hereditary disorders, congenital anomalies,
congenital disorders, and chronic conditions and how pet insurance policies
interact with those disorders or conditions; and

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(4)
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Rating, underwriting, renewal, and other
related administrative topics.

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(d)
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The satisfaction of the training requirements
of another state that are substantially similar to the provisions of subsection
(c) shall be deemed to satisfy the training requirements in this State.

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431: -108
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Rules.
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The commissioner may adopt rules pursuant to chapter 91 to administer
this article.

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431: -109
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Violations.
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Violations of this article shall be subject
to penalties pursuant to this chapter and the rules pursuant to this chapter."

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SECTION 2.
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This Act does not affect rights and duties
that matured, penalties that were incurred, and proceedings that were begun
before its effective date.

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SECTION 3.
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This Act shall take effect on July 1, 2025.

INTRODUCED BY:

_____________________________

Report Title:

Pet
Insurance; Regulation; Establishment

Description:

Establishes
a regulatory framework specifically for pet insurance based on the National
Association of Insurance Commissioners' Pet Insurance Model Act.

The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.