103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB4532

 

Introduced 1/31/2024, by Rep. Joyce Mason - Kelly M. Cassidy

 

SYNOPSIS AS INTRODUCED:
 
215 ILCS 5/Art. XLVIII heading new
215 ILCS 5/1800 new
215 ILCS 5/1805 new
215 ILCS 5/1810 new
215 ILCS 5/1815 new
215 ILCS 5/1820 new
215 ILCS 5/1825 new

    Amends the Illinois Insurance Code. Creates the Pet Insurance Article of the Code. Defines terms. Requires a pet insurer to disclose coverage exclusions, limitations, waiting periods, and other information. Provides that pet insurance applicants shall have the right to examine and return the policy, certificate, or rider to the company or an agent or insurance producer of the company within 30 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. Provides that a pet insurer may issue policies that exclude coverage on the basis of one or more preexisting conditions with appropriate disclosure to the consumer. Provides that a pet insurer may issue policies that impose waiting periods upon effectuation of the policy that do not exceed 30 days for illnesses or orthopedic conditions not resulting from an accident. Prohibits waiting periods for accidents. Provides that no pet insurer or insurance producer shall market a wellness program as pet insurance. Sets forth provisions concerning wellness programs sold by a pet insurer or insurance producer.


LRB103 36202 RPS 66295 b

 

 

A BILL FOR

 

HB4532LRB103 36202 RPS 66295 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Insurance Code is amended by
5adding Article XLVIII as follows:
 
6    (215 ILCS 5/Art. XLVIII heading new)
7
ARTICLE XLVIII. PET INSURANCE

 
8    (215 ILCS 5/1800 new)
9    Sec. 1800. Purpose and scope.
10    (a) The purpose of this Article is to promote the public
11welfare by creating a comprehensive legal framework within
12which pet insurance may be sold in this State.
13    (b) The requirements of this Article shall apply to pet
14insurance policies that are issued to any resident of this
15State; pet insurance policies that are sold, solicited,
16negotiated, or offered in this State; and pet insurance
17policies or certificates that are delivered or issued for
18delivery in this State.
19    (c) All other applicable provisions of this State's
20insurance laws shall continue to apply to pet insurance,
21except that the specific provisions of this Article shall
22supersede any general provisions of law that would otherwise

 

 

HB4532- 2 -LRB103 36202 RPS 66295 b

1be applicable to pet insurance.
2    (d) Nothing in this Article shall in any way prohibit or
3limit the types of exclusions pet insurers may use in their
4policies or require pet insurers to have any of the
5limitations or exclusions described in this Article.
6    (e) Any person licensed in a major line of authority as an
7insurance producer is authorized to sell, solicit, and
8negotiate pet insurance.
 
9    (215 ILCS 5/1805 new)
10    Sec. 1805. Definitions. In this Article:
11    "Chronic condition" means a condition that can be treated
12or managed, but not cured.
13    "Congenital anomaly or disorder" means a condition that is
14present from birth, whether inherited or caused by the
15environment, that may cause or contribute to illness or
16disease.
17    "Department" means the Department of Insurance.
18    "Hereditary disorder" means an abnormality that is
19genetically transmitted from parent to offspring and may cause
20illness or disease.
21    "Pet insurance" means a property insurance policy that
22provides coverage for accidents and illnesses of pets.
23    "Preexisting condition" means any condition for which any
24of the following are true prior to the effective date of a pet
25insurance policy or during any waiting period:

 

 

HB4532- 3 -LRB103 36202 RPS 66295 b

1        (1) a veterinarian provided medical advice;
2        (2) the pet received previous treatment; or
3        (3) based on information from verifiable sources, the
4    pet had signs or symptoms directly related to the
5    condition for which a claim is being made.
6    "Preexisting condition" does not include a condition that
7was covered under a preceding policy period prior to the
8renewal so long as there was no break in the superseding policy
9periods.
10    "Renewal" means to issue and deliver at the end of an
11insurance policy period a policy that supersedes a policy
12previously issued and delivered by the same pet insurer or
13affiliated pet insurer and that provides types and limits of
14coverage substantially similar to those contained in the
15policy being superseded.
16    "Orthopedic conditions" refers to conditions affecting the
17bones, skeletal muscle, cartilage, tendons, ligaments, and
18joints. "Orthopedic conditions" include, but are not limited
19to, elbow dysplasia, hip dysplasia, intervertebral disc
20degeneration, patellar luxation, and ruptured cranial cruciate
21ligaments. "Orthopedic conditions" do not include cancers or
22metabolic, hemopoietic, or autoimmune diseases.
23    "Veterinarian" means an individual who holds a valid
24license to practice veterinary medicine from the appropriate
25licensing entity in the jurisdiction in which the individual
26practices.

 

 

HB4532- 4 -LRB103 36202 RPS 66295 b

1    "Veterinary expenses" means the costs associated with
2medical advice, diagnosis, care, or treatment provided by a
3veterinarian, including, but not limited to, the cost of drugs
4prescribed by a veterinarian.
5    "Waiting period" means the period of time specified in a
6pet insurance policy that is required to transpire before some
7or all of the coverage in the policy can begin.
8    "Wellness program" means a subscription or
9reimbursement-based program that is separate from an insurance
10policy that provides goods and services to promote the general
11health, safety, or well-being of the pet.
 
12    (215 ILCS 5/1810 new)
13    Sec. 1810. Applicability of defined terms. If a pet
14insurer uses any of the defined terms in Section 1805 in a
15policy of pet insurance, the pet insurer shall use the
16definition of each of those terms as set forth in Section 1805
17and include the definition of the terms in the policy. The pet
18insurer shall also make the definition available through a
19clear and conspicuous link on the main page of the pet
20insurer's website or the pet insurer's program administrator's
21website.
 
22    (215 ILCS 5/1815 new)
23    Sec. 1815. Disclosures.
24    (a) A pet insurer transacting pet insurance shall disclose

 

 

HB4532- 5 -LRB103 36202 RPS 66295 b

1the following to consumers:
2        (1) If the policy excludes coverage due to any of the
3    following:
4            (A) a preexisting condition;
5            (B) a hereditary disorder;
6            (C) a congenital anomaly or disorder; or
7            (D) a chronic condition.
8        (2) If the policy includes any other exclusions, by
9    including the following statement: "Other exclusions may
10    apply. Please refer to the exclusions section of the
11    policy for more information.".
12        (3) Any policy provision that limits coverage through
13    a waiting or affiliation period, a deductible,
14    coinsurance, or an annual or lifetime policy limit.
15        (4) Whether the pet insurer reduces coverage or
16    increases premiums based on the insured's claim history,
17    the age of the covered pet, or a change in the geographic
18    location of the insured.
19        (5) If the underwriting company differs from the brand
20    name used to market and sell the product.
21    (b) Unless the insured has filed a claim under the pet
22insurance policy, pet insurance applicants shall have the
23right to examine and return the policy, certificate, or rider
24to the company or an agent or insurance producer of the company
25within 30 days of its receipt and to have the premium refunded
26if, after examination of the policy, certificate, or rider,

 

 

HB4532- 6 -LRB103 36202 RPS 66295 b

1the applicant is not satisfied for any reason.
2    Pet insurance policies, certificates, and riders shall
3have a notice prominently printed on the first page, or
4attached thereto, including specific instructions to
5accomplish a return. The following statement or language
6substantially similar shall be included:
7    "You have 30 days from the day you receive this policy,
8certificate, or rider to review it and return it to the company
9if you decide not to keep it. You do not have to tell the
10company why you are returning it. If you decide not to keep it,
11simply return it to the company at its administrative office
12or you may return it to the agent/insurance producer that you
13bought it from as long as you have not filed a claim. You must
14return it within 30 days of the day you first received it. The
15company will refund the full amount of any premium paid within
1630 days after it receives the returned policy, certificate, or
17rider. The premium refund will be sent directly to the person
18who paid it. The policy, certificate, or rider will be void as
19if it had never been issued."
20    This subsection (b) does not apply to renewals.
21    (c) A pet insurer shall clearly disclose a summary
22description of the basis or formula on which the pet insurer
23determines claim payments under a pet insurance policy within
24the policy, both prior to policy issuance and through a clear
25and conspicuous link on the main page of the pet insurer's
26website or the pet insurer's program administrator's website.

 

 

HB4532- 7 -LRB103 36202 RPS 66295 b

1    (d) A pet insurer that uses a benefit schedule to
2determine claim payment under a pet insurance policy shall:
3        (1) clearly disclose the applicable benefit schedule
4    in the policy; and
5        (2) disclose all benefit schedules used by the pet
6    insurer under its pet insurance policies through a clear
7    and conspicuous link on the main page of the pet insurer's
8    website or the pet insurer's program administrator's
9    website.
10    (e) A pet insurer that determines claim payments under a
11pet insurance policy based on usual and customary fees or any
12other reimbursement limitation based on prevailing veterinary
13service provider charges shall:
14        (1) include a usual and customary fee limitation
15    provision in the policy that clearly describes the pet
16    insurer's basis for determining usual and customary fees
17    and how that basis is applied in calculating claim
18    payments; and
19        (2) disclose the pet insurer's basis for determining
20    usual and customary fees through a clear and conspicuous
21    link on the main page of the pet insurer's website or the
22    pet insurer's program administrator's website.
23    (f) If any medical examination by a licensed veterinarian
24is required to effectuate coverage, the pet insurer shall
25clearly and conspicuously disclose the required aspects of the
26examination prior to purchase and disclose that examination

 

 

HB4532- 8 -LRB103 36202 RPS 66295 b

1documentation may result in a preexisting condition exclusion.
2    (g) Waiting periods and the requirements applicable to the
3waiting periods shall be clearly and prominently disclosed to
4consumers prior to the policy purchase.
5    (h) The pet insurer shall include a summary of all
6disclosures required by this Section in a separate document
7titled "Insurer Disclosure of Important Policy Provisions".
8The pet insurer shall post the document by way of a clear and
9conspicuous link on the main page of the pet insurer's website
10or the pet insurer's program administrator's website.
11    In connection with the issuance of a new pet insurance
12policy, the pet insurer shall provide the consumer with a copy
13of the Insurer Disclosure of Important Policy Provisions
14document required under this subsection (h) in at least
1512-point type when it delivers the policy.
16    (i) At the time a pet insurance policy is issued or
17delivered to a policyholder, the pet insurer shall include a
18written disclosure with the following information, printed in
1912-point boldface type:
20        (1) The Department's mailing address, toll-free
21    telephone number, and website address.
22        (2) The address and customer service telephone number
23    of the pet insurer or the agent or broker of record.
24        (3) If the policy was issued or delivered by an agent
25    or broker, a statement advising the policyholder to
26    contact the broker or agent for assistance.

 

 

HB4532- 9 -LRB103 36202 RPS 66295 b

1    (j) The disclosures required in this Section shall be in
2addition to any other disclosure requirements required by law
3or rule.
 
4    (215 ILCS 5/1820 new)
5    Sec. 1820. Policy conditions.
6    (a) A pet insurer may issue policies that exclude coverage
7on the basis of one or more preexisting conditions with
8appropriate disclosure to the consumer. The pet insurer has
9the burden of proving that the preexisting condition exclusion
10applies to the condition for which a claim is being made.
11    (b) A pet insurer may issue policies that impose waiting
12periods upon effectuation of the policy that do not exceed 30
13days for illnesses or orthopedic conditions not resulting from
14an accident. Waiting periods may not be applied to renewals of
15existing coverage. Waiting periods for accidents are
16prohibited.
17        (1) A pet insurer using a waiting period shall include
18    a provision in its contract that allows the waiting
19    periods to be waived upon completion of a medical
20    examination. Pet insurers may require the examination to
21    be conducted by a licensed veterinarian after the purchase
22    of the policy.
23            (A) A medical examination shall be paid for by the
24        policyholder, unless the policy specifies that the pet
25        insurer will pay for the examination.

 

 

HB4532- 10 -LRB103 36202 RPS 66295 b

1            (B) A pet insurer may specify elements to be
2        included as part of the examination and require
3        documentation thereof, provided the specifications do
4        not unreasonably restrict a consumer's ability to
5        waive the waiting periods by completing a medical
6        examination.
7        (2) Waiting periods and the requirements applicable to
8    them shall be clearly and prominently disclosed to
9    consumers prior to the policy purchase.
10    (c) A pet insurer shall not require a veterinary
11examination of the covered pet for the insured to have the
12policy renewed.
13    (d) If a pet insurer includes any prescriptive, wellness,
14or noninsurance benefits in the policy form, then such
15benefits are made part of the policy contract and shall follow
16all applicable laws and rules adopted under this Code.
17    (e) An insured's eligibility to purchase a pet insurance
18policy shall not be based on participation or lack of
19participation in a separate wellness program.
 
20    (215 ILCS 5/1825 new)
21    Sec. 1825. Sales practices for wellness programs.
22    (a) No pet insurer or insurance producer shall market a
23wellness program as pet insurance.
24    (b) If a wellness program is sold by a pet insurer or
25insurance producer:

 

 

HB4532- 11 -LRB103 36202 RPS 66295 b

1        (1) The purchase of the wellness program shall not be
2    a requirement for purchasing pet insurance.
3        (2) The costs of the wellness program shall be
4    separate and identifiable from any pet insurance policy
5    sold by a pet insurer or insurance producer.
6        (3) The terms and conditions for the wellness program
7    shall be separate from any pet insurance policy sold by a
8    pet insurer or insurance producer.
9        (4) The products or coverages available through the
10    wellness program shall not duplicate products or coverages
11    available through the pet insurance policy.
12        (5) The advertising of the wellness program shall not
13    be misleading and shall be in accordance with this
14    Section.
15        (6) A pet insurer or insurance producer shall clearly
16    disclose the following to consumers, printed in 12-point
17    boldface type:
18            (A) That wellness programs are not insurance.
19            (B) The address and customer service telephone
20        number of the pet insurer or producer or broker of
21        record.
22            (C) The Department's mailing address, toll-free
23        telephone number, and website address.
24    (c) Coverages included in the pet insurance policy
25contract described as wellness benefits are insurance.