BILL ANALYSIS
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THIRD READING
Bill No: AB 2411
Author: Jones (D)
Amended: 8/2/10 in Senate
Vote: 21
SENATE BANKING, FINANCE, AND INS. COMMITTEE : 8-2, 6/30/10
AYES: Calderon, Correa, Florez, Kehoe, Liu, Lowenthal,
Padilla, Price
NOES: Cogdill, Runner
NO VOTE RECORDED: Cox
SENATE APPROPRIATIONS COMMITTEE : 8-1, 8/2/10
AYES: Kehoe, Alquist, Corbett, Emmerson, Leno, Wolk,
Wyland, Yee
NOES: Ashburn
NO VOTE RECORDED: Price, Walters
ASSEMBLY FLOOR : 52-22, 6/1/10 - See last page for vote
SUBJECT : Pet insurance
SOURCE : Author
DIGEST : This bill defines pet insurance as a separate
line within the Insurance Code distinct from other
Miscellaneous lines, would establish required policy terms
for all pet insurance policies serving California
residents, regardless of situs of the contract, and would
increase clarity for consumers on what their policy covers.
CONTINUED
AB 2411
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ANALYSIS : Existing law
1.Specifies 23 different lines of insurance, including a
broad category termed "miscellaneous." Currently, pet
insurance is within the Miscellaneous line.
2.Provides for a comprehensive rate regulation system for
property-casualty insurance, which includes the
Miscellaneous line of insurance.
This bill defines pet insurance as a separate line of
Insurance, and establishes new regulatory requirements for
the sale of pet insurance products.
Specifically, this bill:
1. Establishes pet insurance as a separate line of
insurance, and define it as an individual or group
policy of insurance that covers veterinarian expenses.
2. Provides any pet insurance policy issued, delivered, or
amended after July 1, 2011, is subject to California
law, regardless of the contract situs, so that a group
policy issued to a group policyholder in another state,
but whose coverage extends to a California resident,
will be covered by California law even though the actual
policy would otherwise be subject to the law of the
state where the group policyholder resides.
3. Requires pet insurers to disclose, in the policy and on
the main page of its website, whether their policy
excludes coverage due to pre-existing conditions,
hereditary disorders, or congenital anomalies or
disorders.
4. Requires a pet insurer to reasonably disclose any policy
provision that limits coverage through a deductible, a
waiting period, coinsurance, or annual or lifetime
policy limits.
5. Requires a pet insurer to reasonably disclose whether it
varies coverage or premiums based on claims experience
during the preceding policy period.
AB 2411
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6. Requires a pet insurer that uses a benefit schedule to
determine claim payments to include the applicable
schedule in each policy, and to disclose all schedules
it uses via a link on the main page of its website.
7. Requires a pet insurer that determines claim payments on
any basis to clearly disclose the basis in the policy,
and via a link on the main page of its website.
8. Requires a pet insurer that bases claim payments on
usual and customary fees or other limitations based on
prevailing veterinary service provider charges to
include a provision in the policy that clearly explains
how the claim will be calculated, and disclose this
information via a link on the main page of its website.
9. Specifies that the disclosures required by the bill are
in addition to any other disclosures required by law.
10. Makes conforming changes to several related Insurance
Code provisions.
11. Requires the Department of Insurance to post on its
Internet Web site a list of the insurers that offer,
issue, or underwrite pet insurance in the state, the
names of the products that those insurers offer, issue,
or underwrite, the names of their general agents with
authority to offer, issue, or underwrite pet insurance,
and a link to insurers' company profiles maintained by
the Department.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13
Fund
CDI oversight and $0 less
than $150 less than $150 Special*
post information on website
AB 2411
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SUPPORT : (Verified 8/4/10)
Humane Society of the United States
Humane Society Veterinary Medical association
California Veterinary Medical Board
PAW - PAC
ARGUMENTS IN SUPPORT : According to the author's office,
between 2000 and 2005, veterinary service costs rose over
70 percent to more than $19 billion a year in the U.S. In
response, more pet owners are considering pet insurance to
ensure that they will be able to cover veterinary care as
it becomes more advanced and more expensive.
Pet health policies are similar to other insurance
policies; typically they have premiums, deductibles,
co-pays, coverage limits and benefit schedules. The author
indicates, however, that policyholders have difficulty
ascertaining the coverage limits, benefit schedules,
preexisting conditions and other limitations of pet
insurance policies, and can receive less for their claims
than they expect.
As a solution, the author believes this bill will help pet
owners choose the most appropriate pet insurance by
requiring pet insurance companies to increase the
information disclosed during the transaction. The author
believes the bill also protects policyholders by requiring
insurance companies to improve disclosure of benefit
limitations and exclusions, while requiring a clear
explanation of reimbursement rates.
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Arambula, Bass, Beall, Blakeslee,
Block, Blumenfield, Bradford, Brownley, Buchanan,
Caballero, Charles Calderon, Carter, Chesbro, Coto,
Davis, De La Torre, De Leon, Eng, Evans, Feuer, Fong,
Fuentes, Furutani, Galgiani, Hall, Hayashi, Hernandez,
Hill, Huffman, Jones, Lieu, Bonnie Lowenthal, Ma,
Mendoza, Monning, Nava, V. Manuel Perez, Portantino,
Ruskin, Salas, Saldana, Skinner, Smyth, Solorio, Swanson,
Torlakson, Torres, Torrico, Yamada, John A. Perez
AB 2411
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NOES: Anderson, Bill Berryhill, Conway, DeVore, Fletcher,
Fuller, Gaines, Garrick, Gilmore, Harkey, Huber,
Jeffries, Knight, Logue, Miller, Nestande, Niello,
Nielsen, Norby, Silva, Tran, Villines
NO VOTE RECORDED: Tom Berryhill, Cook, Emmerson, Hagman,
Audra Strickland, Vacancy
JA:nl 8/4/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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