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Pet Insurance (Page 4 of 4)

Pet Insurance Peeves: Considerations for the Discerning Companion Animal Insured.
By Adam P. Karp, Esq. © 2012

Financial Strength and Issuer Credit Ratings. Though not as critical a factor given that most policies will never pay more than $100,000, in addition to policy language one should examine the financial strength and issuer credit rating of the underwriter of the policy she or he intends to buy. As of January 2012, I confirmed the following ratings through A.M. Best. All are secure (FCR of B+ to A++) and investment grade (ICR of bbb to aaa). The financial strength rating (“FSR”) estimates the ability of the insurer to meet its policy and contractual obligations; the issuer credit rating (“ICR”) assesses whether the underwriter is investment-worthy. Only one underwriter, Trupanion’s, was not reviewed by A.M.Best. Below is a matrix of both the FSR and ICR for each underwriter, including outlook (forecasting likelihood that rating may upgrade, downgrade, or remain the same based on financial and market trends):


Litigation. For what it is worth, I discovered the following litigation concerning certain insurers. The summaries below are based solely on allegations and should not be accepted as truth or fact:

ASPCA Capital Suisse, Inc. v. Hentsch Henchoz & Cie, 2005 WL 1353215: alleging that Capital Suisse defendants misrepresented to HH&C and the court the value of Petsmarketing shares transferred to HH&C at over $30 million when they in fact had virtually no market or market value; reply brief, 2005 WL 1429777, disputes this allegation and contends it did have value, saying it traded at $9.25 per share in June 2001).

Pethealth, Trupanion Pethealth Inc. v. Petco Animal Supplies Stores, Inc., 09 CV 0452 LAB (AJB), 2009 WL 1967932 (S.D.Cal.): claims that in May 2008, Petco moved away from discussions with PetFirst and started negotiations with Pethealth competitor Trupanion to provide alternative products; also claims it used Pethealth’s patented Buckslip lead generation system – USP 7,111,775 (775 Patent).

VPI Watkins v. Nationwide; VPI Co., etc., 30200900124840, 2009 WL 8164939 (Cal.Sup.): Alleging racial discrimination, false light privacy, libel per quad, libel per se, slander per quad, slander per se, Watkins asserts that in 2003-2005, operating losses and accounting issues led VPI to terminate and replace its management team. Allegedly, the new account manager, S. Frlekin, embezzled money from VPI by transferring money to his personal offshore accounts;  however, VPI allegedly terminated Watkins under a “cloud of malfeasance facilitated by gross misfeasance [by others]” and “openly implying that [Watkins, the only African American in the executive leadership hierarchy] was responsibly involved in the embezzlement when [VPI] knew [Watkins] engaged in no such commission or omission related to the embezzlement.”

Buying Local. To those reading this article in Washington State, consider that Trupanion and Healthy Paws are headquartered in Seattle and Bellevue, respectively.

Conclusion. I applaud the advent of pet insurance for the reasons stated. As in any market, however, the best advice I can offer is caveat emptor. Below are links to each of the American pet insurance companies so you can conduct further independent review.


List of Pet Insurer Websites
Pets Best  -
Petplan -
Embrace -
PetFirst -
Trupanion -
PetPartners -
Pethealth -
PurinaCare -
Healthy Paws -


End of Pet Insurance Article
by Adam P. Karp



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