Regulation in the Pet Heath Insurance Industry


By Frances Wilkerson, DVM


Contrary to what most people think, pet health insurance is a form of property and casualty insurance not health insurance. Pets are legally considered property and as a result pet health insurance is categorized under property insurance.


Admitted Property and Casualty Insurance Companies


Most pet insurance companies in the U.S. are underwritten by admitted property and casualty insurance companies. An admitted underwriter's insurance policy is examined by a state's Department of Insurance (DOI) before it is allowed to be sold. Also, changes to the policy must be examined by the state's DOI before it can be offered to the public.


The DOI's approval process makes sure the company has policy rates and content that is fair and honest and that the company is financially sound. Admitted insurance companies also contribute to a state fund that is used to pay claims if an insurance company were unable to meet their financial obligations. This fund is called the Guaranty Fund.


Just because an underwriter is an "admitted" insurance company doesn't guarantee that they have a good financial rating. Check A.M. Best's website to get the current financial rating of the underwriter.


Non-Admitted Property and Casualty Insurance Companies


If a pet insurance company has a "non-admitted" property insurance company as their underwriter, the pet insurance policy has not been examined by the state's DOI. These underwriters are not required to follow the state's regulations; they have more flexibility when it comes to the rates they charge and are not required to contribute to the state's Guaranty Fund.


Lloyd's of London


Some pet insurance companies use Lloyd's of London as their underwriter. Lloyd’s is not an insurance company but a group of individuals and corporations that pool their money to insure risk. They do not fall under the category of "admitted" or "non-admitted." Most states have different legislation that pertains to Lloyd's.



Dr. Wilkerson is the author of Her goal is to help pet owners make informed decisions regarding pet insurance. She believes that everyone can make great decisions when given good, reliable information.


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