BILL ANALYSIS
AB 2411
Page 1
ASSEMBLY THIRD READING
AB 2411 (Jones)
As Amended April 15, 2010
Majority vote
INSURANCE 8-2 APPROPRIATIONS 12-5
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|Ayes:|Solorio, Caballero, |Ayes:|Fuentes, Ammiano, |
| |Charles Calderon, Carter, | |Bradford, |
| |Feuer, Hayashi, Salas, | |Charles Calderon, Coto, |
| |Torres | |Davis, Monning, Ruskin, |
| | | |Skinner, Solorio, |
| | | |Torlakson, Torrico |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Anderson, Niello |Nays:|Conway, Harkey, Miller, |
| | | |Nielsen, Norby |
| | | | |
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SUMMARY : 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
defines it as an individual or group policy of insurance that
covers veterinarian expenses.
2)Provides that any pet insurance policy issued, delivered, or
amended after July 1, 2011, is subject to California law,
regardless of the situs of the contract. The effect of this
provision is that a group policy issued to a group
policyholder in another state, but where a California resident
is eligible to participate in the group, 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 a pet insurer to disclose, both in the policy and on
the main page of its website, whether the 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
AB 2411
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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
reduces coverage or increases premiums based on claims
experience during the preceding policy period.
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 Web site.
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 Web site.
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 Web site.
9)Provides that the disclosures required by the bill are in
addition to any other disclosures required by law.
10)Makes a number of conforming changes to several Insurance
Code provisions.
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.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, 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
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COMMENTS : According to the author, pet insurance is not
adequately defined in the Insurance Code, and consumers are too
frequently confused or misled about what is covered by their
policies. The bill's disclosure requirements are designed to
create better consumer understanding of these policies prior to
purchasing them.
Analysis Prepared by : Mark Rakich / INS. / (916) 319-2086
FN: 0004588