Part 9. Pet Insurance of California Insurance Code >> Division 2. >> Part 9.
For purposes of this part, the following definitions shall
apply:
(a) "Chronic condition" means a condition that can be treated or
managed, but not cured.
(b) "Congenital anomaly or disorder" means a condition that is
present from birth, whether inherited or caused by the environment,
which may cause or otherwise contribute to illness or disease.
(c) "Hereditary disorder" means an abnormality that is genetically
transmitted from parent to offspring and may cause illness or
disease.
(d) "Pet insurance" means an individual or group insurance policy
that provides coverage for veterinary expenses.
(e) "Preexisting condition" means any condition for which a
veterinarian provided medical advice, the pet received treatment for,
or the pet displayed signs or symptoms consistent with the stated
condition prior to the effective date of a pet insurance policy or
during any waiting period.
(f) "Veterinarian" means an individual who holds a valid license
to practice veterinary medicine from the Veterinary Medical Board
pursuant to Chapter 11 (commencing with Section 4800) of Division 2
of the Business and Professions Code or other appropriate licensing
entity in the jurisdiction in which he or she practices.
(g) "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.
(h) "Waiting or affiliation 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.
A policy of pet insurance that is marketed, issued,
amended, renewed, or delivered, whether or not in California, to a
California resident, on or after July 1, 2015, regardless of the
situs of the contract or master group policyholder, or the
jurisdiction in which the contract was issued or delivered, is
subject to this part.
(a) An insurer transacting pet insurance in California
shall disclose all of the following to consumers:
(1) If the policy excludes coverage due to any of the following:
(A) A preexisting condition.
(B) A hereditary disorder.
(C) A congenital anomaly or disorder.
(D) A chronic condition.
(2) If the policy includes any other exclusion, the following
statement: "Other exclusions may apply. Please refer to the
exclusions section of the policy for more information."
(3) Any policy provision that limits coverage through a waiting or
affiliation period, a deductible, coinsurance, or an annual or
lifetime policy limit.
(4) Whether the insurer reduces coverage or increases premiums
based on the insured's claim history.
(b) (1) If a pet insurer uses any of the terms in paragraph (1) of
subdivision (a) in a policy of pet insurance, the insurer shall use
the definition of those terms as set forth in Section 12880 and
include the definition of the term in the policy. The pet insurer
shall also make that definition available through a link on the main
page of the insurer's Internet Web site.
(2) Nothing in this subdivision or Section 12880 in any way
prohibits or limits the types of exclusions pet insurers may use in
their policies, nor does it require pet insurers to have any of the
limitations or exclusions defined in Section 12880.
(c) A pet insurer shall clearly disclose a summary description of
the basis or formula on which the insurer determines claim payments
under a pet insurance policy within the policy and through a link on
the main page of the insurer's Internet Web site.
(d) A pet insurer that uses a benefit schedule to determine claim
payment under a pet insurance policy shall do both of the following:
(1) Clearly disclose the applicable benefit schedule in the
policy.
(2) Disclose all benefit schedules used by the insurer under its
pet insurance policies through a link on the main page of the insurer'
s Internet Web site.
(e) 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 do both of the following:
(1) Include a usual and customary fee limitation provision in the
policy that clearly describes the insurer's basis for determining
usual and customary fees and how that basis is applied in calculating
claim payments.
(2) Disclose the insurer's basis for determining usual and
customary fees through a link on the main page of the insurer's
Internet Web site.
(f) The insurer shall create a summary of all policy provisions
required in subdivisions (a) through (e), inclusive, into a separate
document titled "Insurer Disclosure of Important Policy Provisions."
(g) The insurer shall post the "Insurer Disclosure of Important
Policy Provisions" document required in subdivision (f) through a
link on the main page of the insurer's Internet Web site.
(h) (1) In connection with the issuance of a new pet insurance
policy, the insurer shall provide the consumer with a copy of the
"Insurer Disclosure of Important Policy Provisions" document required
pursuant to subdivision (f) in at least 12-point type when it
delivers the policy.
(2) In addition, the pet insurance policy shall have clearly
printed thereon or attached thereto a notice stating that, after
receipt of the policy by the owner, the policy may be returned by the
insured for cancellation by delivering it or mailing it to the
insurer or to the agent through whom it was purchased.
(A) The period of time set forth by the insurer for return of the
policy shall be clearly stated on the notice, and this free look
period shall be not less than 30 days. The insured may return the
policy to the insurer or the agent through whom the policy was
purchased at any time during the free look period specified in the
notice.
(B) The delivery or mailing of the policy by the insured pursuant
to this paragraph shall void the policy from the beginning, and the
parties shall be in the same position as if a policy or contract had
not been issued.
(C) All premiums paid and any policy fee paid for the policy shall
be refunded to the insured within 30 days from the date that the
insurer is notified of the cancellation. However, if the insurer has
paid any claim, or has advised the insured in writing that a claim
will be paid, the 30-day free look right pursuant to this paragraph
is inapplicable and instead the policy provisions relating to
cancellation apply to any refund.
(i) The disclosures required in this section shall be in addition
to any other disclosure requirements required by law or regulation.
(a) A person who violates a provision of this part is
liable to the state for a civil penalty to be determined by the
commissioner, not to exceed five thousand dollars ($5,000) for each
violation, or, if the violation was willful, a civil penalty not to
exceed ten thousand dollars ($10,000) for each violation. The
commissioner may establish the acts that constitute a distinct
violation for purposes of this section. However, when the issuance,
amendment, or servicing of a policy or endorsement is inadvertent,
all of those acts constitute a single violation for purposes of this
section.
(b) The penalty imposed by this section shall be imposed by and
determined by the commissioner pursuant to Section 12880.4. The
penalty imposed by this section is appealable by means of any remedy
provided by Section 12940 or by Chapter 5 (commencing with Section
11500) of Part 1 of Division 3 of Title 2 of the Government Code.
(a) Whenever the commissioner shall have reason to believe
that a person has engaged or is engaging in this state in a
violation of this part, and that a proceeding by the commissioner in
respect thereto would be to the interest of the public, he or she
shall issue and serve upon that person an order to show cause
containing a statement of the charges in that respect, a statement of
that person's potential liability under this part, and a notice of a
hearing thereon to be held at a time and place fixed therein, which
shall not be less than 30 days after the service thereof, for the
purpose of determining whether the commissioner should issue an order
to that person to pay the penalty imposed by Section 12880.3 and to
cease and desist those methods, acts, or practices, or any of them,
that violate this part.
(b) If the charges or any of them are found to be justified, the
commissioner shall issue and cause to be served upon that person an
order requiring that person to pay the penalty imposed by Section
12880.3 and to cease and desist from engaging in those methods, acts,
or practices found to be in violation of this part.
(c) The hearing shall be conducted in accordance with the
Administrative Procedure Act (Chapter 5 (commencing with Section
11500) of Part 1 of Division 3 of Title 2 of the Government Code),
except that the hearings may be conducted by an administrative law
judge in the administrative law bureau when the proceedings involve a
common question of law or fact with another proceeding arising under
other Insurance Code sections that may be conducted by
administrative law bureau administrative law judges. The commissioner
and the appointed administrative law judge shall have all the powers
granted under the Administrative Procedure Act.
(d) The person is entitled to have the proceedings and the order
reviewed by means of any remedy provided by Section 12940 or by the
Administrative Procedure Act.
The commissioner may adopt reasonable rules and
regulations, as are necessary to administer this part, in accordance
with the rulemaking provisions of the Administrative Procedure Act
(Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3
of Title 2 of the Government Code).