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
Alaska: On April 15, the Alaska Division of Insurance issued Order R20-04 emphasizing that insurance carriers are prohibited from terminating policies due to nonpayment of premium. Previously, Alaska issued Bulletin B 20-08 encouraging insurers to work with policyholders, but the Order requires insurers to work with policyholders to collect premium and waive all late fees. Additionally, the Order specifies that policyholders or their brokers must notify carriers that they intend to continue coverage, and an insurer is not obligated to continue coverage if the policyholder obtains coverage elsewhere.
Alaska: On April 16, the Alaska Division of Insurance issued Order R20-07 amending Order R20-04 to extend the prohibition on termination for nonpayment until June 1, 2020.
California: On April 17, APCIA Staff and APCIA’s counsel met with the Deputy Commissioner for Rate Regulation at the California Department of Insurance to engage in a Q & A session on Bulletin 2020-3, which requires insurers to provide premium relief/refunds to insureds. The interview covers a number of important topics including rate filing and policy modification. A couple of the questions covered include:
Q: The Bulletin seems to allow insurers to make premium reductions without making a rate filing. Is that correct?
A: Yes. The Department does not want hundreds of rate filings. The Department wants to avoid an allegation or the perception that premiums are excessive if they are not adjusted to reflect a significant change in the risk insured. The expectation is that insurers will review the change in risk associated with the reduction of business or miles driven for auto, and reduce premium charged based on that reduction of risk, consistent with the insurers existing rating plan. For example, in personal passenger auto, the reduction in miles driven may justify placing insured in a lower mileage band.
Q: For new policies incepting during this period, carriers may be reflecting the changes in risk. Is this appropriate?
A: Yes, just include in the report.
Here a link to the APCIA interview: http://www.pciaa.net/pciwebsite/cms/content/viewpagesecured?sitePageId=60373
Connecticut: On April 20, the Connecticut Insurance Department (“CID”) issued a notice to insurers stating that the CID will issue Temporary Insurance Producer Licenses to applicants meeting the requirements for licensure without requiring examination. The stipulations regarding this temporary license are set forth in the notice.
Georgia: On April 20, Governor Kemp issued Executive Order 04.20.20.01, extending limited liability protections given to healthcare workers to Auxiliary Emergency Management Workers. Additionally, the Order allows medical facilities to resume elective services.
Louisiana: On April 20, the Louisiana Department of Insurance adopted Emergency Rule 42 extending the tax filing deadlines for Form 1071, Quarterly Tax Statement, and Form 1265, Surplus Lines Tax Report, to July 15, 2020. The Rule applies to all insurers, surplus lines producers, and self-procurers
New York: On April 21, ELANY released Bulletin No. 2020-18 related to the change in the New York Department of Financial Services (“DFS”) position on cancellation and non-renewal moratorium/grace period/notifications emergency regulation applicability to commercial excess & surplus policies and policyholders. Recently DFS published a new FAQ changing its position on the applicability of its cancellation and non-renewal moratorium/grace period/notice emergency regulation to commercial E&S policies and policyholders. The DFS’s original guidance excluded all commercial E&S policies and policyholders from the emergency regulation’s requirements and is reflected in ELANY Bulletin 2020-17 Revised. According to the Bulletin, the DFS’s revised policy states:
Do the moratorium and Emergency Regulation apply to a commercial lines insurance policy issued by an excess line insurer?
The moratorium and Emergency Regulation do not apply to a commercial lines insurance policy issued by an excess line insurer and will not affect any such policy’s cancellation provisions, except as respects any excess line commercial fire insurance policy.
The DFS update adds a caveat to its exemption, subjecting excess & surplus fire insurance policies to the Emergency Regulations moratorium.
Pennsylvania: On April 20, the Governor of Pennsylvania signed Senate Bill 841 into law, authorizing a notary public located in Pennsylvania to perform a notarial act facilitated by communication technology for remotely located individuals during the COVID-19 pandemic.
Rhode Island: On April 21, Superintendent Elizabeth Dwyer issued amended Insurance Bulletin Number 2020-3, extending insurance license expiration dates by 90 days.
Texas: On April 21, the Texas Department of Insurance (DOI) issued Commissioner’s Bulletin No. B-0022-20 reminding insurers how to properly send notices of material changes to a policyholder. Insurers may self-report if they have violated the law related to material change notices.
Utah: On April 21, Utah Insurance Department posted guidance related to combating fraud in workers’ compensation during COVID-19.
Virginia: On April 21, the Virginia Department of Insurance released guidance that authorizes companies to implement digital signatures for surety bonds during the COVID-19 public health emergency.
Property and Casualty Insurance
Maryland: On April 20, the Maryland Department of Transportation issued a letter to all automobile insurers in the state, asking that insurers refrain from uploading their Book of Business for the “Customer Connect” program Phase 1. The original upload was requested by May 1, but the Department of Transportation will advise of a new date in the future.
Nevada: On April 20, The Nevada Division of Insurance issued guidance to property and casualty insurers related to proposals for premium relief. According to the guidance, the Division requires that all premium-relief plans changing or refunding premium, dividend plans, measures providing cessation of cancellations, working with insureds by extending payments to future dates, or other types of consumer assistance with impacts upon Nevada insureds, must be filed. Additionally, relevant items describing the insurer’s approach – e.g., any revisions to rating rules, any new endorsement forms, and similar changes – should be filed within SERFF as soon as possible, with the understanding that a rapid turnaround will be provided. Filings are allowed to have retroactive effective dates and are not intended to delay the provision of relief to insureds. The Division requests for insurers that have not yet filed with the Division but have proceeded with such plans, that the actions taken by the insurers be filed via SERFF immediately.
New Hampshire: On April 20, the New Hampshire Insurance Department (“NHID”) issued Bulletin 20-030-AB, regarding COVID-19 P&C Expedited Reviews and Application of Certain Unfair Insurance Trade Practices Laws. The Bulletin provides examples of premium refunds and strategies that insurers have implemented, and advises insurers that such refunds will not be viewed as rebates or violations of the Unfair Trade Practice laws. The Bulletin states, “the Commissioner will not consider the above-detailed types of COVID-19-related changes to be unfairly discriminatory practices to the extent that they are reasonably and consistently applied.” Additionally, “the Commissioner will further not regard such reasonably and consistently applied COVID-19-related changes to be violations of statutes that govern the return of premium to policyholders, limit the frequency of premium changes, or prohibit improper rebates to induce the purchase or retention of insurance so long as a filing is provided for expedited review.” This bulletin applies to all lines of property and casualty insurance.
New York: The New York Workers Compensation Bureau issued notice of its adoption of amendment to 12 NYCRR 325-1.8, 329-1.3, 329-4.2, 333.2 and 348.2 (COVID-19 Telemedicine), which provides for telemedicine visits under certain conditions.
North Carolina: On April 20, the North Carolina Department of Insurance issued an Order extending self-insurer workers’ compensation filing deadlines. Effective immediately, the April 30th deadline for the submission the reports outlined in the Order that are required by N.C. Gen. Stat. §§ 97-180(a), (b) and (c) and N.C. Gen. Stat. § 97-190(c), is extended for a period of 30 days until May 30, 2020. The Commissioner will continue to monitor the situation and may extend the deadline accordingly pursuant to N.C. Gen. Stat. § 58-2-47, or may otherwise modify the Order as needed.
Illinois: On April 20, Illinois released Company Bulletin 2020-11, which announces Emergency Rulemaking under 50 Ill. Adm. Code 2040. Among other things, the emergency rules: provide for extensions on premium payment deadlines, depending on circumstances; prohibit certain issuers from interfering with an employer that wants to keep its employees on their existing health coverage despite a reduction in hours or temporary layoff; restrict the ability of certain issuers to prevent a person whose employment-based coverage was terminated from electing COBRA or state continuation coverage; allow persons who qualify for a special enrollment period due to loss of employment based coverage to have their new coverage retroactively begin the day after their loss of prior coverage; require coverage of off-formulary prescriptions if there is a shortage of a covered formulary drug; and require coverage of a 90-day supply of covered maintenance medications, with some exceptions.