COVID-19 Daily Insurance Regulatory Updates to Keep You Informed During the Lockdown (April 30, 2020)

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

Georgia: On April 28, Commissioner King issued Bulletin 20-EX-7 winding down COVID-19 Bulletins and Directives. As part of the Bulletin, among other things, Directive 20-EX-5 directing insurers to refrain from canceling commercial policies that include business interruption and business income coverage for non-payment will expire May 19. Additionally, suspension of all non-federal filing deadlines and waiver of late filing fees will expire May 31.

Hawaii: On April 27, the Hawaii Insurance Commissioner issued Memorandum 2020-4A, to all admitted and non-admitted insurers, providing guidance for insurer responses to the COVID-19 pandemic. The Memorandum outlines activities/responses that would not be considered unfair trade practices, rebating, or unfair methods of competition. Some of the listed activities include; waiving fees, penalties, or other charges relating to insured’s temporary inability to submit premium payments and respond to inquiries; extending of grace periods for premium payments; granting of additional time for premium payments; extending of proof of loss submission deadlines; allowing self-auditing and self-reporting; and, encouraging policyholders to use electronic payment technology.

Massachusetts: On April 29, Massachusetts issued Bulletin 2020-14, which concerns temporary individual producer licenses during the pandemic. The Bulletin provides that the Division will issue temporary producer licenses to applicants who meet requirements for licensure without examination, subject to qualifications and limitations identified in the Bulletin. The licenses will automatically expire on the earlier of 90 days after the state of emergency is terminated or 180 days from the date of issue, with “no exceptions.”

Michigan: On April 30, the Department of Insurance and Financial Services (DIFS) issued Bulletin 2020-22-INS, which extends the applicability of previously announced emergency measures announced in Bulletins 2020-12-INS and 2020-14-INS. As stated in Bulletin 2020-22-INS, Bulletin 2020-12-INS (issued on March 30), was extended through April 30, at 11:59 p.m., by DIFS Bulletin 2020-14-INS (issued on April 10), in accordance with Executive Order 2020-42. In accordance with Executive Order 2020-59, DIFS Bulletin 2020-12-INS, as extended by Bulletin 2020-14-INS, is again extended pursuant to this Bulletin, effective for the period of time that Executive Order 2020-59, and any subsequent Executive Order that reaffirms or clarifies the measures set forth in it, remains effective. On April 24, Governor Whitmer issued Executive Order 2020-59, which rescinded Executive Order 2020-42, but reaffirmed and clarified the measures set forth in it and extended their duration through May 15, at 11:59 p.m.

New Mexico: On April 29, the New Mexico Office of Superintendent of Insurance issued Bulletin 2020-011, encouraging commercial insurers to allow the mid-term audit of policies calculated using an auditable exposure. The Bulletin states that an audit and a premium adjustment would be justified due to the COVID-19 pandemic since businesses have reduced their operating hours, converted sales arrangements, curbed travel, or reduced payroll. A mid-term premium audit may be conducted by policyholder or the insurer. If the policyholder conducts a self-audit, they are required to report changes in the auditable exposure the insurer.

Property and Casualty Insurance

New Jersey: On April 29, the New Jersey Compensation Rating and Inspection Bureau (“CRIB”) issued Manual Amendment Bulletin #496, which will temporarily amend the maximum total Schedule Rating credit that can be applied to an individual risk to -35%, in order to allow member carriers to issue premium credits to their insureds for the reduction of risk not otherwise contemplated by Manual rules.

Oklahoma: On April 30, the Oklahoma Department of Insurance issued revised Bulletin No. PC 2020-03. The original Bulletin, issued April 28, incorrectly stated that insurers have no less than 10 days to adjust premiums. The Bulletin is revised to state, “that insurers have up to 10 days to adjust the premium of a commercial insurance policy that was subject to a mid-term self-audit by the policyholder.”

Health Insurance

Kentucky: On April 30, Kentucky issued guidance concerning hospital services during the COVID-19 state of emergency. Among other things, the guidance provides that insurers shall not require preauthorization for the transfer of patients via ambulance to other facilities for the purpose of transferring a patient not diagnosed with COVID-19 to make a bed available for a COVID-19 positive patient. Should the transfer of the patient involve a non-participating provider, the non-participating provider and the insurer shall negotiate reimbursement for the services and hold the member harmless from paying the balance of the non-participating provider’s billed charges. Additionally, the guidance provides that certain preauthorization and concurrent review procedures shall be suspended. However, insurers may require notification of inpatient admissions and services in order to properly identify the status of members and provide for appropriate care management services. Insurers maintain the ability to perform retrospective review of such inpatient services when the state of emergency is lifted. Additionally, audit activities, recoupments, and appeal timeframes for appeals of post-service claims for inpatient services, are suspended through the state of emergency.

Maryland: On April 30, Maryland issued Bulletin 20-22, concerning pharmacy audits. The Bulletin provides that, pursuant to recently adopted emergency regulations, the Commissioner is requiring pharmacy benefits managers and health carriers to suspend random audits, including but not limited to in-person or “desk” audits of pharmacies, unless there is a reasonable suspicion of fraud.

Texas: On April 30, Texas issued Commissioner’s Bulletin # B-0024-20, which concerns mandated benefits data reporting. Existing statute requires TDI to collect and report cost and utilization data for mandated health benefits from issuers at least once every two years. In light of the COVID-19 pandemic, TDI will delay the collection of data scheduled for 2020 until 2021. At that time, issuers will report 2019 and 2020 data.

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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