BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 2411
                                                                  Page  1

          Date of Hearing:   May 5, 2010

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                    AB 2411 (Jones) - As Amended:  April 15, 2010 

          Policy Committee:                              InsuranceVote:8-2

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              

           SUMMARY  

          This bill adds pet insurance to classes of insurance regulated  
          by the California Department of Insurance. This bill establishes  
          the framework for the regulation of pet insurance effective July  
          1, 2011, including specifications about notification of  
          exclusions for coverage of pre-existing conditions, hereditary  
          disorders, and congenital anomalies, and other underwriting  
          practices.

          This bill establishes requirements for companies selling pet  
          insurance regarding benefit schedules, claims payments, and  
          related information required to be posted on company websites. 

           FISCAL EFFECT  

          Fee-supported special fund costs of $180,000 in 2010-11 and  
          ongoing fee-supported special fund costs of $115,000 to the  
          California Department of Insurance (CDI) to establish pet  
          insurance as a new class of insurance. Costs include amending  
          insurer certificates of authority, review of insurer  
          applications, and revisions of forms and applications. 

           COMMENTS  

           1)Rationale  . This bill is sponsored by the Humane Society to  
            establish the regulation of pet insurance and to increase  
            consumer protections in this area. According to the author,  
            due to escalating veterinary costs, more pet owners are  
            considering the purchase of pet insurance to reduce financial  
            risk. 

           2)Background  . Pet health insurance policies are similar to other  








                                                                  AB 2411
                                                                  Page  2

            health policies and include variation in premiums,  
            deductibles, copayments, coverage limits and benefit  
            schedules. The author indicates policyholders have had trouble  
            ascertaining coverage limits and underwriting practices.  
            Consumers sometimes receive far less reimbursement than they  
            expected when they purchased the insurance. This bill  
            increases oversight of this insurance product and increases  
            the clarity of information provided to policy holders. 



           Analysis Prepared by  :    Mary Ader / APPR. / (916) 319-2081