Pet Insurance Trupanion Fined $100,000 for Marketing Violations

Trupanion, a Seattle-based pet insurance company, was slapped a $100,000 fine by the Washington State Insurance Commissioner’s office.

The state’s insurance commissioner, Mike Kreidler, sanctioned the penalty because of the insurer’s violation of industry regulations on marketing. The agency specifically found one of the insurance company’s units—Trupanion Managers USA—for three violations.

The agency found that the company exceeded the $100 limit in gifts given away in exchange for referrals. The unit also invested in an unlicensed website for pet insurance marketing and lead generation. Lastly, the company also paid $245,000 to five unlicensed representatives to offer pet insurance policies to animal shelters and veterinary clinics.

A spokesperson for the insurance commissioner Kara Klotz said the regulations oblige insurers to work only with licensed agents.

The penalty was Trupanion’s third in four years. In 2016, the office imposed a $150,000 fine to Trupanion Managers for receiving $3.3 million in premiums by way of unlicensed producers. Its sister company, American Pet Insurance Co., was also penalized $250,000 for charging variable rates and mishandling consumer complaints in that same year.

The insurer agreed with the claims by the insurance commissioner and considered the errors as “clerical mistakes.”

Trupanion CEO Darryl Rawlings admitted their mistake of paying a veterinary clinic with $133 in gifts, which is beyond the $100 limit allowed by the agency. He also apologized for paying, a producer which Kreider labelled as unlicensed, for getting market leads.

Rawlings said paying for the producer was an oversight on their part because they were not aware that the website was providing information that requires a license.

Trupanion also said that it is on the process of licensing some of its unlicensed marketing representatives.

Despite the fines, Trupanion’s total revenue in 2018 was $304 million, up 24.7% from the previous year. And even though the company failed to break even last year, the company remains healthy, according to market analyst Kevin Kim Ellich.