With the increased uncertainty around how Insurers can and should respond to the Novel Coronavirus (“COVID-19”), the New York State Department of Financial Services (“DFS”) has issued guidance to (i) all DFS Regulated Entities requesting that all such entities have preparedness plans to address the risks posed by COVID-19; and a call for special report to (ii) all authorized Property/Casualty Insurers requesting such insurers to provide policyholders with information and developments surrounding business interruption and related coverage written in New York.
Below please find further details regarding each DFS guidance.
New York DFS Circular-Letter-5, Operational Risk and COVID-19
Who: To Chief Executive Officers or the Equivalents of DFS Regulated Insurance Entities.
What: Requesting information and assurances relating to each applicable entity’s preparedness plans relating to operational and financial risk arising from COVID-19.
When: Responses are due within 30 days of March 11, 2020 to firstname.lastname@example.org
The DFS has issued Circular Letter 5, Regarding Operational Risk Arising from the Outbreak of COVID-19. The Circular Letter provides guidance regarding an entity’s preparedness plans and requests that Chief Executive Officers or Equivalents of DFS regulated entities “provide a plan of preparedness to manage the risk of disruption to its operations and the financial risk arising from COVID-10.” Specific responses are due within 30 days of the March 11, 2020 letter and should be submitted to email@example.com. For further information regarding what the DFS believes an entity’s plans of preparedness should include, please see Circular Letter 5 here.
New York DFS Sec.-308-Letter Regarding Business Interruption Coverage
Who: To all authorized property and casualty insurers.
What: Requesting certain information regarding commercial property insurance it has written in New York and details on business interruption coverage related thereto to both policyholders and the DFS.
When: All responses should be sent to Hoda.Nairooz@dfs.ny.gov on or before March 18, 2020.
The DFS has issued a Section 308 letter on Business Interruption and related coverage written in New York. The letter is directed to “all authorized property casualty insurers” requesting that such insurers explain to policyholders the benefits under their policies and the protections provided in connection with COVID-19. Specifically, Insurers should provide information on:
The DFS requests that Insurers prepare such information for each policy type and should send such explanations to each of their policyholders of the applicable policy types along with copies of such explanations to DFS, along with a representation that the explanations have been provided to the Insurer’s policyholders.
Please note that for the purpose of this letter, DFS considers commercial property insurance to include the following, along with substantially similar insurance: business owner policies, commercial multiple peril policies, and specialized multiple peril policies. Any Insurer that does not write business described in the letter is required to send a statement signed by an officer or other authorized representative signifying such in lieu of complying with the information requests.
For further information regarding the relevant information that should be provided to policyholders, please refer to the Sec.-308-Letter.
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