In conjunction with the Locke Lord COVID-19 task force, we are reviewing, analyzing, and compiling regulatory updates to provide clients easy access to information during this unprecedented time. If you have any questions on the subject matter below, do not hesitate to reach out. The information below relates to state and federal bulletins, emergency orders, pending/enacted legislation, and other related actions taken in response to the COVID-19 pandemic.
All Lines of Insurance
Arkansas: On April 6th, Arkansas Governor Asa Hutchinson issued Executive Order No. 20-13 (superseding Executive Order No. 20-10) requiring businesses to follow social distancing requirements. Additionally, businesses must post the state’s social distancing rules at their entrance.
Michigan: On April 10, Michigan issued Bulletin 2020-14-INS, which extends Bulletin 2020-12-INS (concerning insurer operations and work from home requirements), originally issued on March 30, through April 30.
Michigan: On April 8th, Governor Whitmer issued Executive Order No. 2020-41, encouraging the use of electronic signatures and remote notarization, witnessing, and visitation during the COVID-19 pandemic. The order remains in effect through May 6, 2020.
Missouri: On April 10, the Missouri Department of Commerce and Insurance (DCI) issued Insurance Bulletin 20-08 advising all insurers writing commercial and personal lines that all COVID-19 filings related to premium relief will receive an expeditious review by the DCI, if the insurer provides advance notification of the SERFF tracking number by emailing [email protected]. Insurers are strongly encouraged to include the following information within their filing submission:
- Explanation of premium relief strategy
- Effective and termination date of any premium relief
- Methodology used to determine premium relief
- Description of how any premium relief will be implemented in a manner that avoids unfair discrimination.
- Information on how the insurer will notify the insured of premium relief
- Description of how the insurer will account for any premium dividends (for example, as an increase in underwriting expense or decrease in premium)
- Information on how the insurer plans to account for any COVID-19-related premium relief when performing future ratemaking exercises
- Clear confirmation that the company will continue to closely monitor the situation and adjust premium and coverage plans and monitor company solvency.
New Jersey: On April 9th, Governor Philip Murphy issued Executive Order No. 123, declaring that policyholders are given a 90-day grace period following nonpayment of premiums during which property casualty insurers and premium finance companies must pay claims without regard to prior nonpayment of premium by the policyholder, and during which the insurers may not cancel or nonrenew a policyholder during the 90-day grace period. The Order, states:
All property and casualty insurance companies, life insurance companies, insurance premium finance companies, health insurance companies, health maintenance organizations, health service corporations and other entities issuing health or dental benefits plans in this State (collectively, “subject entities”) shall not cancel during the emergency grace period any policy or contract as a result of nonpayment as defined as follows:
- In the case of property and casualty insurance companies, life insurance companies, and insurance premium finance companies, for a period of at least 90 days, during which period claims shall be paid without regard to prior nonpayment of premium by the policyholder; and
- In the case of health insurance companies, health maintenance organizations, health service corporations and other entities issuing health or dental benefits plans in this State, for a period of at least 60 days, during which period claims shall be paid without regard to prior nonpayment of premium by the policyholder and the cost of which claim may not be recouped during or after the emergency grace period from the policyholder based upon the nonpayment of the premium.
Property and Casualty Insurance
California: On April 9th, Insurance Commissioner Ricardo Lara issued a Notice on Coverage for Delivery Drivers for California Essential Businesses During the COVID-19 Public Health Emergency, urging, among other things, that all admitted and non-admitted insurance companies extend auto insurance coverage for drivers who are using their personal vehicles to fulfill deliveries for California’s essential businesses during the COVID-19 pandemic. Additionally, the California Insurance Department requests insurers not to deny a claim under a personal auto policy solely because the insured was engaged in providing delivery service on behalf of a California essential business impacted by the COVID-19 related closures, and the delivery driver was operating within the course and scope of their duties on behalf of such essential business. The Notice also requests that:
- Insurers allow California essential businesses to add retroactively additional drivers not previously named under such businesses’ commercial automobile policy if a driver is operating a vehicle covered by the policy within the scope of their duties for the specific essential business.
- Insurers allow delivery coverage for drivers who utilize a personal motorcycle motor scooter, and/or bicycle to engage in delivery services on behalf of California essential businesses under their personal auto policies if such policies already include motorcycle coverage for the insured driver.
- Insurers that provide commercial general liability coverage to California essential businesses notify their insureds that commercial automobile coverage is available if requested. If the insured California essential business requests commercial automobile coverage, the Department requests that the insurer, either through a rider or stand-alone policy, provide this coverage to any insured California essential business impacted by Governor Newson’s March 19, 2020 Executive Order N-33-20 to close all non-essential businesses.
The Notice applies only to California essential business delivery drivers who do not have such coverage under their personal auto policy. The Notice does not apply to drivers while working for a transportation network company, ride share, or similar commercial product delivery company.
Additionally, the Department requests insurers to provide the above-described coverages as soon as possible and to continue these coverages until at least thirty (30) days after California essential businesses are no longer subject to restrictions pursuant to Governor Newsom’s March 19, 2020 Executive Order N-33-20. Insurers are also encouraged to provide the above-described coverages retroactive beginning on March 19, 2020. Any insurer intending to implement the provisions of this Notice should file any amended policy forms or endorsements with the Department.
Maryland: On April 9th, the Maryland Insurance Administration (“MIA”) issued an advisory to all Property & Casualty Insurers, the Maryland Automobile Insurance Fund, the Chesapeake Employers Insurance Company and the Joint Insurance Association, reminding insurers who make rate filings providing temporary relief to insureds during the COVID-19 crisis to file with the MIA. The advisory relates to Bulletin #20-12 which encouraged all property and casualty insurers to consider providing temporary rate relief to policyholders for the duration of the COVID-19 crisis due to reduced exposure to loss in certain lines of business.
Oregon: On April 9th, the Oregon Division of Financial Regulation issued Bulletin No. 2020-8, to all property and casualty automobile insurance companies, calling on insurers to extend coverage for personal delivery drivers, and to limit the application of commercial delivery exclusions during the COVID-19 outbreak. Insurance carriers are encouraged to file endorsements with the Division of Financial Regulation, to allow for coverage to be broadened for those using personal automobiles to deliver essential goods for a fee.
Texas: On April 9th, The Texas Department of Insurance (DOI) issued Order No. 2020-6312 changing the effective date of rate changes for new business and renewals of homeowners, dwelling, condominium, and renters policies under the Texas Fair Access to Insurance Requirements Plan Association (FAIR Plan). The Order postpones the effective date of the new FAIR Plan rates in filings S674637, S674652, S674651, and S674649 from May 1, 2020 to August 1, 2020.
Massachusetts: On April 9, Massachusetts issued Bulletin 2020-13, which concerns health insurance coverage for COVID-19 treatment and out-of-network emergency and inpatient reimbursement during the pandemic. Among other things, the Bulletin announces that the Division of Insurance “expects” carriers to provide coverage and forego any cost-sharing for (i) outpatient COVID treatment when delivered by in-network providers, and (ii) in and out-of-network providers for emergency department and inpatient COVID treatment. The Bulletin also identifies the Division’s expectations for coverage provided in acute care hospitals, as well as standards for payment for out-of-network emergency and inpatient treatments.
Pennsylvania: On April 10, the Pennsylvania Department of Insurance issued Notice 2020-09 addressing the applicability of notice regarding COVID-19 Insurance Coverage to Insurers and Producers of Limited Benefit Policies discussed in previously issued Notice 2020-03. This Notice discusses what insurers are considered “health insurers” for purposes of Notice 2020-03. The Department of Insurance clarifies that Notice 2020-03 was intended to include all insurers with accident and health authority that may issue policies in Pennsylvania providing coverage of health care services. This includes insurers that may offer comprehensive major medical policies, but also includes insurers that may offer limited or excepted benefit policies, including but not limited to short-term limited duration or specified disease policies. Thus, if an insurer issues or may issue any policy in Pennsylvania under which a health care service may be covered, that insurer is expected to be responsive to the content of Notice 2020-03, and is asked, as stated in paragraph #9 of Notice 2020-03, to provide information on the steps it is taking in response to that Notice.