Business ProfileforTrupanion

The following describes a government action that has been resolved by either a settlement or a decision by a court or administrative agency. If the matter is being appealed, it will be noted below.

On June 24, 2019, State of Washington Office of the Insurance Commissioner issued a Consent Order Levying a Fine against Trupanion Managers USA, Inc., hereinafter “Licensee”.

The Order imposed a $100,000 fine for failing to ensure its producers are properly licensed and affiliated, paying commissions or other valuable consideration to unlicensed producers for solicitation, giving pet care providers gifts valued in excess of $100 in a 12 month period for referrals, and knowingly accepting insurance business from unlicensed producers. The Licensee violated RCW 48.17.490(1), RCW 48.30.133(1), WAC 284-17-825(2), WAC 284-17-473, RCW 48.17.530(1)(b), RCW 48.17.530(1)(g), and RCW 48.17.530(1)(l), justifying the imposition of a fine under RCW 48.17.560.

For more information, please contact the Washington State Insurance Commissioner at 1-800-562-6900 or https://www.insurance.wa.gov/

The following describes a pending government action that has been formally brought by a government agency but has not yet been resolved. We are providing a summary of the governments allegations, which have not yet been proven.

On July 26, 2018, California Department of Insurance issued an Accusation in the matter of Licenses and Licensing Rights of Trupanion Managers, USA, Inc.

On or about August 5, 2008, the Commissioner issued insurance license number 0G22803 to Respondent TRUPANION MANAGERS, USA, INC., ("Respondent" or "Trupanion"), a business entity, to act as a resident insurance producer, and a casualty broker-agent and property broker-agent. Respondent licenses are currently active, with an expiration date of August 31, 2020.  TMU is in the business of selling medical insurance for pets and has been licensed in California for the lines of Property and Casualty insurance since August 5th, 2008. Pet insurance is categorized as an Inland Marine Property insurance. TMU is an appointed producer of American Pet Insurance Company INC., (APIC), EIN 74-3211949.

Based on the complaint received from PLBS, the California Department investigator interviewed TMU's representatives, who were General Counsel Gavin Friedman (Friedman) and Compliance & Regulatory Vice President Louis Chames (Chames). Friedman and Chames stated that between January 1, 2013 and February 19, 2018, TMU employed approximately 300 individuals in the TMU call center and their titles were known as either "Care Team Members", "Retention Team Members", or "Sales Team Members." TMU Care Team job duties include the interaction with existing customers to handle the administration of currently held policies. The Sales Team employees interact with prospective customers to answer questions regarding pet insurance products and process requests for the purchase of pet insurance. Retention Team employees interact with existing customers to mitigate the cancellation of a policy. The clarification of job duties was provided during the interview of the TMU representatives and supplemental information was provided to the Department investigator after the interview. TMU also employed "Territory Partners" who work directly with veterinarians and hospital officials who have chosen Trupanion as their pet insurance provider (Trupanion.com)."

Beginning in 2015, TMU initiated its mandatory policy for the members to be licensed in all 50 United States for all Teams, Sales, Retention and Customer Care. By 2017, the company had instituted a training program in which newly hired employees started as a member of the Customer Care Team and they could conduct no business over the telephone until they had their home state license in Washington. All call center representatives are now required to be licensed in all 50 States prior to conducting business over the telephone. 

Mr. Friedman provided a brief background of the company. He explained that in 2009 the primary source of TMU's business sales was web-based; that trend is now closer to 50/50. The telephone-based minority of that business consisted of a large number of consumers calling in to ask for assistance in completing the web-based transaction, which TMU felt was administrative assistance in nature. Mr. Friedman acknowledges this was not the correct decision. However, they were having difficulty navigating an increasing call volume, volume of business in general and the preparation to go public. As TMU went from a small private company to a large public company, it did not have the internal structure or policy for compliance. Mr. Freidman stated they were doing too much, too quickly, and were not prepared to handle the volume of California business with a completely licensed staff. 

As a company, TMU offers no excuses, explaining there was a steep learning curve in the company's transition. TMU provided a written statement and it does not deviate from the interview summarized above. Review of documentation and supplemental information provided by TMU showed identification of transacting employees for each California policy issued between January 1, 2013 and February 19, 2018. The report included the name, date of birth, Social Security Number and contact information for each of the employees. The holder name and effective dates of coverage for each policy were referenced with earned commission and chargebacks where applicable. Chargebacks reference commissions requested to be returned to TMU from the employee. The information provided by TMU was in the form of a spreadsheet, which broke the data into two pages. Page one provided pet ID, policy number, policy holder name, city, state (CA), pet name, enrollment date, cancellation date (if applicable), issuing employee and enrollment path. For clarification, the enrollment path for all referenced policies was by telephone. The second page showed the transacting employee number, name, date of birth, Social Security Number, followed by the total number of policies issued for California and the total commissions earned. Review of the provided data consisted of several steps, starting with the determination of licensing for every employee listed. This showed a total of 11 out of 318 listed employees were licensed for all pet insurance business they issued within the time period investigated. The remainder of the listed employees were either licensed, at some point within the period or, the majority, never obtained a license. The next step was to crosscheck each employee's license date with the issue date of the business they conducted; any policy issued outside of their license period was flagged. Between January 1, 2013 and February 19, 2018, 307 TMU call center employees transacted approximately nineteen-thousand nine-hundred eighty (19,980) pet insurance policies to California consumers without a license; this has a potential written premium total of approximately $18.2 million

TMU allowed 307 of its employees to negotiate, transact and sell pet insurance policies without proper licensure. Through these sales TMU also paid its employees' commission from the sale of these policies. TMU aided and abetted said unlicensed employees to transact insurance on its behalf and having knowledge that the employees were not in compliance, a violation of California Insurance Code § § 1631 and 1668(n) and (o). The acceptance of over 19,980 pet insurance policies from unlicensed persons is in violation of §1633. These acts are also violations of §1668(b), (j), (1) and §1668.5 (a)(7) and 1768 in that they were against the public interest by exposing the public to the danger of loss.

For more information, please contact the California Department of Insurance at 800-927-4357 or http://www.insurance.ca.gov/