On March 18th, West Virginia Insurance Commissioner James A. Dodrill (the “Commissioner”) issued Emergency Order 20-EO-02 (the “Order”), urging insurers to forbear from the cancellation or non-renewal of policies for reasons directly resulting from the COVID-19 pandemic.
The Order directs insurers to consider the difficulties experienced by both private citizens and businesses as a result of the current pandemic when dealing with policyholders. The Order also directs workers’ compensation insurers to consider the impact on rates of any idling of workers by employer-insureds.
The West Virginia Department of Insurance also released an email clarifying the Order (the “Email”). The Email clarifies that the Order does not prohibit the cancellation or nonrenewal of all policies. The Order urges insurers to provide relief to West Virginia policyholders who are directly economically affected by COVID-19. Insurers may require validation that the extraordinary situation potentially serving as the basis of relief or forbearance is directly related to COVID-19 by obtaining something, in writing or otherwise, from an employer stating that a policyholder was economically affected by COVID-19.
The Order does not apply to policyholders who were already delinquent or were cancelled/nonrenewed for other valid underwriting reasons.
This Emergency Order remains in full force and effect until further notice.
On March 17th, the Commissioner issued West Virginia Insurance Bulletin 20-06 (the “Bulletin”), which allows for the temporary licensing of insurance producers for 180-day periods under specified conditions during the COVID-19 pandemic.
Due to a backlog of applications caused by the suspension of operations and/or closure of facilities by the third-party vendors responsible to provide producer testing and fingerprinting services, the Commissioner will issue a temporary producer license to applicants for a producer license, on a case-by-case basis, without requiring testing or fingerprinting, where it is determined that applicants are unable to complete the requisite testing or obtain fingerprinting due to third-party vendor operations suspensions or closures. Such temporary licenses will only be issued to applicants who will, when licensed, engage in the business of insurance while employed by an existing agency, brokerage or insurer and under the direct supervision of a producer who is currently licensed and in good standing with the Commissioner.
Additionally, the Bulletin states that temporary licenses will be issued for a period of up to 180 days and will be subject to being sooner rescinded depending upon the duration of the current insurance emergency. Upon rescission of the temporary producer license, the licensee will no longer be licensed, will immediately revert to the status of applicant, and must then complete all usual requirements for licensure in order to obtain a producer license.
Recipients of the temporary producer licenses will be subject to any and all limitations on the authority of such temporary license as specified in the license or in documentation furnished with the temporary license. Recipients of temporary producer licenses shall also be required, when engaging in the business of insurance pursuant to temporary licensure, to do so only while under the direct supervision of a producer who is currently licensed and in good standing with the Commissioner.
Locke Lord will continue to monitor these developments.
Visit our COVID-19 Resource Center often for up-to-date information to help you stay informed of the legal issues related to COVID-19.