California Governor Gavin Newsom signed Senate Bill 1217 into law on September 26, 2024, ushering in a new era of transparency and consumer protection in the pet insurance industry. The legislation, which took effect January 1, 2025, represents one of the most comprehensive pet insurance reforms in the United States, requiring insurers to provide unprecedented clarity about coverage, exclusions, and pricing factors.
Key Changes Under SB 1217
Enhanced Disclosure Requirements
The new law mandates that pet insurers clearly disclose several critical aspects of their policies:
- Coverage exclusions for preexisting conditions, hereditary disorders, congenital anomalies, and chronic conditions
- Premium factors including whether rates increase based on pet age, claim history, or geographic location
- Waiting periods and their specific requirements (capped at 30 days for illnesses, with no waiting period allowed for accidents)
- Medical examination requirements and their potential impact on coverage
Distinguishing Insurance from Wellness Programs
Perhaps most significantly, SB 1217 creates a clear legal distinction between pet insurance and pet wellness programs. Wellness programs can no longer be marketed as insurance and must:
- Be sold separately from insurance policies
- Include clear disclosures that they are not regulated insurance products
- Use separate payment transactions and documentation
- Avoid duplicating coverage available through insurance policies
Streamlined Coverage Activation
The law requires insurers to activate coverage no later than 12:01 a.m. on the second day after receiving a complete application and payment information, unless conducting individualized underwriting.
The Challenge: Breed-Specific Risk Assessment
One of the most complex aspects of pet insurance underwriting involves breed-specific risk factors. Different dog breeds have varying predispositions to hereditary disorders, orthopedic conditions, and other health issues that directly impact insurance pricing and coverage decisions.
Under SB 1217’s transparency requirements, insurers must clearly explain:
- How they determine premiums based on breed characteristics
- Which hereditary and congenital conditions are excluded
- The specific orthopedic conditions covered or excluded
- Their basis for usual and customary fee calculations
How The Dog API Enables Compliance
The Dog API provides a comprehensive solution for insurers seeking to comply with California’s new transparency requirements while maintaining accurate, breed-specific underwriting.
Comprehensive Breed Data
The Dog API offers detailed information on over 200 dog breeds, including:
Health Predispositions: Breed-specific data on common hereditary disorders, congenital anomalies, and chronic conditions that insurers must now explicitly disclose under SB 1217.
Orthopedic Risk Factors: Given the law’s specific definition of “orthopedic” conditions (including hip dysplasia, elbow dysplasia, and cruciate ligament injuries), the API provides breed-specific orthopedic risk assessments.
Temperament and Behavioral Traits: Information that can inform liability assessments and premium calculations, which must now be transparently disclosed to consumers.
Life Expectancy Data: Critical for age-based premium adjustments that insurers must now clearly explain to policyholders.
Regulatory Compliance Features
Standardized Definitions: The API’s breed data aligns with the standardized definitions required under SB 1217, ensuring consistent terminology across policies and disclosures.
Evidence-Based Risk Assessment: Provides the documented basis for premium calculations and exclusions that insurers must now make available to consumers through their websites.
Practical Implementation
Insurers can integrate The Dog API to:
- Automate Disclosure Documents: Generate the required “Insurer Disclosure of Important Policy Provisions” document with breed-specific information
- Enhance Website Transparency: Populate website resources with detailed, breed-specific coverage information
- Streamline Underwriting: Quickly assess breed-specific risks during the accelerated coverage activation timeline
- Support Customer Service: Provide representatives with comprehensive breed information to answer policyholder questions
The Competitive Advantage
Insurers who leverage comprehensive breed data through The Dog API gain several advantages in the post-SB 1217 landscape:
Consumer Trust: Demonstrating thorough, science-based underwriting builds confidence among pet owners who now have access to detailed policy information.
Accurate Pricing: Better breed-specific data leads to more precise risk assessment and competitive pricing.
Reduced Claims Disputes: Clear, upfront disclosure of breed-specific exclusions reduces potential conflicts during claims processing.
Scalable Compliance: Automated breed data integration ensures consistent compliance across all policies and disclosures.
Looking Ahead
California’s SB 1217 likely represents the beginning of a nationwide trend toward greater transparency in pet insurance. Several other states are considering similar legislation, and the National Association of Insurance Commissioners continues to develop model pet insurance regulations.
Insurers who proactively invest in comprehensive breed data and transparent disclosure practices will be well-positioned to adapt to this evolving regulatory landscape. The Dog API provides the foundation for this strategic approach, enabling insurers to meet today’s California requirements while preparing for tomorrow’s national standards.
Conclusion
Senate Bill 1217 transforms pet insurance in California by prioritizing consumer transparency and protection. While these requirements present operational challenges for insurers, they also create opportunities for companies that embrace data-driven, transparent underwriting practices.
The Dog API serves as a critical tool in this transformation, providing the comprehensive breed information necessary to meet disclosure requirements, support accurate underwriting, and build consumer trust in an increasingly regulated market. As pet insurance continues to evolve nationwide, the combination of regulatory compliance and data-driven decision making will define industry leaders.
For insurers operating in California or preparing for similar regulations in other states, integrating comprehensive breed data isn’t just about compliance—it’s about building a more transparent, trustworthy, and sustainable pet insurance industry.
Reach out to us today to learn more about how The Dog API can help your pet insurance business.
