For Consumers

Kreidler fines Trupanion $100,000 for using unlicensed sales partners

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June 25, 2019

OLYMPIA, Wash. – Insurance Commissioner Mike Kreidler fined Trupanion Managers USA, Inc., a Seattle-based pet insurance producer, $100,000 for violating Washington state insurance laws and rules.

Kreidler found that Trupanion committed the following violations:

  • Gave gifts in excess of $100 to one veterinary clinic from 2016 to 2018 in exchange for referrals. State law limits insurance producers’ gifts to no more than $100 per recipient per year for referrals. 
  • Trupanion paid, an unlicensed producer, to market the pet insurance and generate leads on their behalf. Trupanion received 28 completed applications from April 2017 to May 2018. State law prohibits producers from accepting business from unlicensed producers. 
  • Contracted with unlicensed and unaffiliated “territory partners” to promote its pet insurance to veterinary clinics, animal shelters and animal stores. From 2015 to 2018, Trupanion paid nearly $245,000 in commissions to five unlicensed territory partners on thousands of pet insurance transactions. State law prohibits producers from paying commissions to unlicensed producers.

Trupanion Managers and American Pet Insurance Co., Inc., the insurer it’s affiliated with, are owned by the same parent company, Trupanion, Inc. 

Kreidler fined Trupanion Managers $150,000 in July 2016 for selling nearly 3,300 pet insurance policies through its unlicensed call center employees and contracted territory partners, totaling $3.3 million in premiums. He fined American Pet Insurance Co. $250,000 in July 2016 for multiple violations including charging incorrect rates, mishandling consumer complaints and policy cancelations, among other issues. He suspended $100,000 of the fine as long as the company followed Kreidler’s plan to bring the company into compliance. In November 2016, Kreidler imposed $10,000 of the suspended fine amount for continuing to charge incorrect rates to policyholders.

“I’m always concerned when those in the insurance industry commit multiple and repeat violations,” said Kreidler. “I’ve worked closely and at length with Trupanion and American Pet and I expect their business practices to improve going forward. These violations are not difficult to fix and these laws are fairly straightforward to comply with.” 

Kreidler’s office is working with the National Association of Insurance Commissioners on a potential model law to better regulate pet insurance, an increasingly popular product among consumers. Kreidler’s office has fielded consumer complaints about claim denials for pre-existing conditions and claim handling issues. 

“Consumers should closely read the fine print when they are thinking about buying pet insurance,” said Kreidler. “The desire to protect pets is understandable, but many of these products exclude common conditions found in certain pet breeds. We’ve also found that premiums increase and benefits decline as pets age.”