On January 4, 2024, the New Brunswick Superintendent of Insurance (the NB Superintendent) introduced Blanket Order INS-2024-01 (Exemption of Adjusters of Pet Health Claims in Part XV of the Insurance Act) (the Pet Exemption), which exempts adjusters of pet health insurance claims from the insurance adjuster licensing requirements under Sections 351 and 351.02 of the Insurance Act (New Brunswick) (the NB Act).
The Pet Exemption is effective as of February 1, 2023, as the Pet Exemption is effective retroactive to the effective date of Rule INS-001 – Insurance Intermediaries Licensing and Obligations.
The below provides a brief summary of the Pet Exemption and its implications for insurers and insurance adjustment firms involved in pet insurance business in New Brunswick.
Application of the Pet Exemption to the adjustment of pet health insurance claims
For the Pet Exemption to apply, the following requirements must be satisfied: (i) the claim is for “pet health insurance”, (ii) insurance adjuster licensing (absent an exemption) under Sections 351 or 351.02 of the NB Act is required for the adjustment of the particular claim; and (iii) the insurer or adjustment firm, as applicable, complies with certain oversight obligations set out in the Pet Exemption and discussed further below.
The Pet Exemption defines “pet health insurance” as “… a form of property insurance, and includes medical and dental care coverage for domestic animals, including when they are injured in an accident”. In addition, Section 351 of the NB Act requires anyone carrying on (or offering to carry on) business as an insurance adjuster in New Brunswick to hold adjuster licensing. Section 351.02 of the NB Act requires insurers and insurance intermediaries to only allow licensed insurance adjusters to act on their behalf in the adjustment of claims. Prior to the introduction of the Pet Exemption, the adjustment of any claims of pet health insurance in New Brunswick required full insurance adjuster licensing.
As noted above, the application of the Pet Exemption is subject to insurers and adjustment firms complying with certain oversight obligations. In particular, the Pet Exemption provides, among other things, as follows:
An insurance company or an adjusting firm that uses the services of a person that is exempt from the requirement to be licensed under this Blanket Order shall ensure that the person has the appropriate qualifications and competency to deal with any insurance claim that the person is involved in on behalf of the insurance company or adjusting firm, and shall oversee the activities of the person with respect to any insurance claim.
Implications for insurers and adjustment firms in New Brunswick
The Pet Exemption is a welcome development that aims to reduce the regulatory burden on insurers and insurance intermediaries conducting pet insurance business in New Brunswick. We hope to see other jurisdictions follow New Brunswick in the near future by introducing similar adjuster licensing exemptions for pet insurance claims.
In order to comply with the oversight obligations under the Pet Exemption, it will be prudent for insurers and adjustment firms to develop written internal policies and procedures to ensure that (i) the individual dealing with the claim has the appropriate qualifications and competency; (ii) appropriate records are maintained by insurers and adjustment firms, to demonstrate compliance with such internal policies and procedures; and (iii) there is appropriate oversight of the adjuster. We note that in developing such policies and procedures, insurers and adjustment firms can likely leverage existing policies and procedures dealing with claims administration and the oversight of insurance adjusters.