In conjunction with the Locke Lord COVID-19 task force, we are reviewing, analyzing, and compiling information from state and federal resources, including insurance trade associations, 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.
Colorado: On March 27th, the Colorado Division of Insurance issued Bulletin No. B-5.38 directing all insurance companies issuing coverage to personal and commercial policyholders to make reasonable accommodations to prevent individuals and businesses from losing coverage due to cancellation for the non-payment of premium. Reasonable accommodations include, but are not limited to; (1) extension of premium grace periods; (2) waiver of late payment fees; (3) a moratorium on cancellations for non-payment; (4) defer any non-renewal underwriting actions; and, (5) provide a continuation of coverage for any expiring policy. Furthermore, the Bulletin states that these accommodations should be available to policyholders, and clearly explained on the insurer’s website, for as long as the Orders are in effect or until the Bulletin is rescinded, whichever is later. Insurers should also note, that at some point in the future, the Division of Insurance will request data from insurers about their compliance with this bulletin, including the website address where the information is displayed and number of accommodations made or rejected by the insurer.
Colorado: On March 25th, Governor Jared Polis issued Executive Order 2020 017 directing all Coloradans to stay at home, subject to limited exceptions such as obtaining food, or going to and from work at Critical Businesses. Insurance is deemed to be a Critical Business (Financial Institutions) in accordance with Colorado Amended Public Health Order 20-24. The Order remains in effect through April 11, 2020 unless rescinded or modified.
Indiana: On March 26th, Insurance Commissioner Stephen Robertson issued Bulletin 252, requesting all insurance companies and HMOs in Indiana to institute a moratorium on policy cancellation and non-renewals for any insurance policy in effect for a policyholder in Indiana to allow a grace period for any policyholder in Indiana for a period of 60-days for any premium payment due from March 19th to May 18th, 2020. The moratorium is not a waiver; only an extension of the period in which to pay the premium. The moratorium applies only to cancellations and non-renewals for failure to pay premiums during the 60-day period. The Bulletin also implements a 60-day grace period relating to renewals and cancellations for all licensees, certificate holders, and registrants. This includes premium tax and surplus lines premium tax filings.
Kansas: On March 28th, Governor Laura Kelly issued Executive Order 20-16, ordering a statewide stay home order in conjunction with the Kansas Essential Function Framework (“KEFF”) for COVID-19. All individuals are directed to stay in their homes or residences unless performing an essential activity. Insurance is deemed an essential activity under the KEFF. The Order becomes effective as of 12:01 a.m. on March 30, 2020 and remains in force until rescinded, until April 19, 2020, or until the statewide State of Disaster Emergency proclaimed on March 12, 2020 related to COVID-19 expires.
Louisiana: Insurance Commissioner James Donelon promulgated Emergency Rule 39 (the “Rule”), which establishes a process whereby insureds who operate commercial enterprises in the state can make a demand upon their admitted insurers to allow for either a mid-term audit by the insured or a physical audit by the insurer of those insurance policies that are auditable. Additionally, admitted insurers are required to adjust the premium and refund any overpayments within 10 days of the completion of the self-audit. The Rule applies to all admitted insurers who issued any policy of insurance in the state that provides insurance coverage to commercial insureds whose insurance policy is rated using an auditable exposure basis, including but not limited to, payroll, sales, enrollment, attendance, occupancy rates, square footage or any other basis. Surplus lines insurers are urged and requested to adhere to the Rule. The Rule is effective until April 13, 2020, unless terminated sooner.
Louisiana: Insurance Commissioner James Donelon promulgated Emergency Rule 40 (the “Rule”), imposing a moratorium on policy cancellations and non-renewals for policyholders in the state during the outbreak of COVID-19. The Rule applies to any authorized insurer operating in the state, and any approved unauthorized insurer, eligible unauthorized insurer, or domestic surplus lines insurer. Insurers cannot cancel or non-renew policies that were in effect on or before 12:01 a.m. on March 12, 2020, except for fraud or material misrepresentation, or the written request by the insured. The Rule is effective from March 12 through May 12, but does not apply to policies that were issued on or after March 12.
Nebraska: On March 27th, Insurance Director Bruce Ramge issued a Notice to all insurers licensed to do business in Nebraska regarding insurer accommodations to policyholders or claimants developed in response to COVID-19. The Notice informs insurers that they may relax certain requirements such as notice of loss, premium payment provisions, and cancellation and non-renewal timeframes. If the insurer administers accommodations on a consistent and fair basis, the Department of Insurance will not consider them to be violations of the Nebraska Unfair Trade Practices Act, the Nebraska Unfair Claims Settlement Practices Act nor associated regulations.
Oklahoma: On March 26, 2020, Insurance Commissioner Glen Mulready approved waiving certain requirements for new licenses issued to producers and adjusters. These measures will ensure services remain available during the state’s response to COVID-19.
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.
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