Pet insurer Trupanion has been served a $100,000 fine for violating insurance regulations around marketing.
Washington State insurance commissioner Mike Kreidler sanctioned the fine – Trupanion’s third in four years. Specifically, it was one of the insurance company’s units that picked up the penalty – Trupanion Managers USA – for dubious marketing tactics. Seattle Times reported that the unit was fined for unscrupulous marketing practices such as exceeding the $100 limit in gifts in exchange for customer referrals, paying a website unlicensed to sell insurance to market products and generate leads, and paying $245,000 to five unlicensed representatives to sell pet insurance policies to veterinary clinics and animal shelters.
“If you’re working with an unlicensed professional and they do something bad that harms you, we don’t have recourse,” said Kara Klotz, a spokesperson for the state insurance regulator. “If your [licensed] producer has violated state laws, you can go on our website and see exactly what they did.”
The insurer agreed with the insurance commissioner’s claims and called the errors “clerical mistakes.” Trupanion CEO Darryl Rawlings admitted that it was “a mistake on [their] part” to pay a veterinary clinic $133 in gifts, which exceeded the $100 limit allowed by the state regulator.
Rawlings also apologized for paying Reviews.com – labeled an unlicensed producer by Kreidler – for market leads.
“This one website was providing a level of detailed information that requires a license,” the executive said. “We were not aware of that. We would have told them they’re not allowed to do it. In that case it was an oversight on our side.”
Trupanion also stated that it is working to license some of the unlicensed marketing representatives.
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This is not the first time Trupanion has come under fire for its business practices. In 2016, Trupanion Managers was fined $150,000 by Kriedler’s office for generating $3.3 million in premiums via unlicensed producers. The insurer and its sister company, American Pet Insurance Company, were found to have violated state law for other reasons, such as failing to cancel policies for owners of deceased pets, or for not selling insurance to people without an email address.