Covid19, Cancellation and Regulation

Covid19 has changed the the world we live in and charged the state insurance regulators to respond to the harsh impact on our economy. Set forth below is a sampling of actions taken with respect to cancellation, nonrenewals, and other actions. The list is by no means comprehensive or meant to be instructive, but does illustrate how some regulators are responding.

On March 18, 2020, the California Insurance Commissioner requested that all insurance companies provide their insured with at least a 60- day grace period to pay insurance premiums so that insurance policies are not cancelled for nonpayment of premium during this time.   

The Colorado Division of Insurance issued Bulletin No. B-5.38 to direct all insurers to make reasonable accommodations so that policies are not cancelled for nonpayment of premium. The Bulletin applies to both personal and commercial policies. 

The Governor of Delaware has issued a Declaration which states that throughout the duration of the declared COVID-19 State of Emergency insurers must cease cancellations or non-renewals of insurance policies due to nonpayment for those residents and businessowners who are experiencing a loss of income due to the crisis.  

The Hawaii Insurance Division issued Memorandum 2020-3I to encourage insurers to work with policyholders, both individuals and businesses, to ensure that coverages continue and policies do not lapse. The Division suggests insurers refrain from cancelling or nonrenewing due to nonpayment, work with insureds on payment plans, and waive late fees and penalties.

The Indiana Department of Insurance issued Bulletin 252,which, among other things, asks insurers to institute a moratorium on cancellations and nonrenewals for nonpayment for 60 days.

Kentucky has issued guidance stating that insurers shall not deny a claim under a personal automobile insurance policy solely because the insured was engaged in delivery services on behalf of a business impacted by the closures necessitated by theCOVID-19 crisis. 

The Louisiana Department of Insurance promulgated Emergency Rule 40 (in-force through May 12) to impose a moratorium on policy cancellations and nonrenewals for policyholders during the COVID-19 emergency. Insurers cannot cancel or nonrenew policies that were in effect on or before March 12, 2020, except for fraud or material misrepresentation, or the written request by the insured.

The Maryland Insurance Administration (MIA) has issued Bulletin20-15, which encourages issuers of private passenger automobile policies to waive exclusions for an insured’s commercial use of their vehicle during theCOVID-19 crisis.

The Mississippi Department of Insurance issued Bulletin2020-3, which imposed a 60-day moratorium on the cancellation and non-renewal of policies for the nonpayment of premium. 

The Missouri Department of Commerce and Insurance issued Bulletin 20-05, which encourages insurers to provide a grace period to allow policyholders to keep their policies in force.

Nebraska Department of Insurance has issued a notice informing insurers they may relax certain requirements such as notice of loss, premium payment provisions, and cancellation and non-renewal timeframes, provided they are applied on a consistent and fair basis.

New York Issues Executive-Order-202.13 which imposes a moratorium on insurers cancelling, nonrenewing, or conditionally renewing insurance policies for 60 days

North Dakota has issued Bulletin 2020-8, which urges insurers and related licensees to provide flexibility and possibly relief from certain insurance requirements to policyholders impacted by the coronavirus pandemic. 

The Ohio Department of Insurance has issued Bulletin 2020-07, which notifies insurers that they must provide their insureds with at least a 60-day grace period to pay insurance premiums. 

The Virginia Bureau of Insurance issued a statement strongly encouraging insurers to be flexible and take into consideration the hardships and constraints many individuals and businesses are experiencing during the COVID-19 crisis.

The Washington Office of the Insurance Commissioner has issued Emergency Order 20-03, which temporarily prohibits insurers from cancelling a policy for nonpayment of premium from March 25, 2020, through May 9, 2020, unless specifically directed to do so by the insured.

The Nash Group remains open during this pandemic to provide services and advice to insurers who have engaged our services.

Our hopes and prayers are that you and your families remain safe and healthy. Jeff, Karen and Deborah.