State Insurance Departments Issue Guidance to Life and P&C Insurers Concerning COVID-19

State insurance departments across the country are continuing to provide guidance in response to the coronavirus outbreak. Faegre Drinker has aggregated a list of current guidance from state departments of insurance requesting accommodations for non-payment of premium with respect to COVID-19.

State Insurance Department Life and P&C Policy Cancellation Limitations Concerning COVID-19 Updated as of April 28, 2020

Alabama

• “Recommends” insurers consider the following actions for applicable policies in force as of March 13, 2020: (i) relaxing due dates for premium payments, (ii) extending grace periods, (iii) waiving late fees and penalties, (iv) allowing premium payment plans which will avoid a lapse in coverage, (v) expanding automobile coverage to allow personal vehicles to be covered while delivering food, medicine or other essential services for commercial purposes
• Read the Bulletin

Alaska

• “Prohibits” the termination of insurance contracts due to non-payment until June 1, 2020
• Read the Bulletin

Arizona

• “Encouraging” all insurers to work with their insureds so that coverage continues and policies do not lapse, including refraining from cancelling or non-renewing policies due to non-payment during this time of hardship and granting a grace period for premium payments to be made when practicable
• Read the Bulletin

Arkansas

• The Department issued a 60-day moratorium on the cancellation/non-renewal of insurance policies for the non-payment of premiums for policyholders (i) diagnosed with/positively tested for COVID-19 or (ii) terminated, laid off, or who are self-employed or an independent contractor and have experienced a cessation of work, but the moratorium extension is not automatic and affected policyholders must request this extension from their insurance carriers
• Read Bulletin 6-2020 and 12-2020
• See also Bulletin 14-2020

California

• “Requesting” that insurers provide their insureds with at least a 60-day grace period to pay insurance premiums so that insurance policies are not cancelled for nonpayment of premium during this challenging time due to circumstances beyond the control of the insured
• Read the Notice

Colorado

• “Directs” all P&C insurers 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; among other things, such accommodations should be posted on the insurer’s website and there is a corresponding survey
• Read the Bulletin and the FAQs
• Review the Survey

Connecticut

• “Orders and Directs” among other things, that, beginning on April 1, 2020, for a period of 60 calendar days ending on June 1, 2020, no insurer may, without a court order, lapse, terminate or cause to be forfeited a covered insurance policy because a covered policyholder does not pay a premium or interest or indebtedness on a premium under the policy that is due, except as provided in the Executive Order
• Read the Executive Order

Delaware

• Governor “orders” no insurer may, without a court order, lapse, terminate or cause to be forfeited a covered insurance policy because a covered policyholder does not pay a premium or interest or indebtedness on a premium under the policy that is due during the pendency of the declared state of emergency
• Sixth Modification to State of Emergency and the Ninth Modification to State of Emergency
• Read Bulletin 116 and Bulletin 117

District of Columbia

• “Ordering” that insurers are prohibited from terminating insurance contracts due to non-payment and that insurers shall provide policyholders the ability to repay any unpaid premiums in installments over a period of at least 12 months beginning one month after the end of the public health emergency
• Read the Order

Florida

• “Encouraging” insurers to only consider cancellation of policies when all possible efforts to work with the insured have been exhausted

Georgia

• “Directs” all P&C insurers to refrain from cancelling any commercial policies, including business interruption or business income coverage, for the cause of non-payment
• This Directive expires on May 19, 2020
• Read Directive 20-X-5 and Directive 20-X-7

Hawaii

• “Encourages” insurers of all lines to work with their insureds to ensure coverage continues during this time, policies do not lapse, and to consider the following: (i) refraining from cancelling or non-renewing policies due to non-payment during this time of hardship and to grant a grace period for premium payments to be made; (ii) working with insureds on a structured payment plan for late premium payments; (iii) waiving late fees and penalties; (iv) extending timeframes to complete property and automobile inspections or undergo medical examinations; and (iv) continuing to work with insureds for a period of 60 days after this health emergency has passed, or as long as reasonably practical
• Read the Memorandum

Illinois

• “Requests” that P&C insurers implement various safeguards to address problems consumers may face through circumstances beyond their control, including a moratorium on cancellations and nonrenewals
• Read the Bulletin

Indiana

• “Requests” all insurance companies in Indiana institute a moratorium on policy cancellations and non-renewals of 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 any premium payment due from March 19, 2020 to May 18, 2020
• Read the Executive Order

Kansas

• Commissioner cannot mandate a moratorium on policy cancellations due to non-payment of premium, but consumers are encouraged to work directly with their insurer to explore options on payment plans, extended grace periods, etc.

Kentucky

• “Strongly encouraging” flexibility and cooperation between insurers and insureds by, among other things: (i) placing coverage in abeyance, at the request of the insured, due to pandemic-related changes in risk and desire to prevent lapse in coverage, (ii) extending grace periods for premium payment, and (iii) extending the effective termination date of non-renewals and cancellations
• Read the Guidance

Louisiana

• “Suspends” any notice of cancellation, notice of nonrenewal or nonreinstatement in force on March 12, 2020, and any such notice shall be null and void and have no force or effect until the earlier of 11:59 p.m. on May 12, 2020, or 11:59 p.m. on the date the Governor lifts the State of Emergency presently in effect, inclusive of any renewal thereof
• Read the Emergency Rule

Maine

• Insurers “must prioritize consumers’ needs” and “must make” all reasonable accommodations for late payments and other problems that are beyond the consumer’s control.
• Read the Bulletin

Maryland

• “Encourages” insurers to make reasonable accommodations so that individuals and businesses do not lose coverage due to non-payment of premium
• Read the Bulletin

Massachusetts

• Insurers are “advised” to provide employers and individuals with as much flexibility as is reasonably possible during the period of the COVID-19 public health crisis to maintain their existing coverage
• Read the Bulletin

Mississippi

• 60-day moratorium on the cancellation/non-renewal of policies for the non-payment of premiums, effective March 24, 2020, and insurers are “directed” to work with impacted policyholders in paying the premiums that become due during the moratorium period by either allowing a payment plan or a further extension of the due date for the amount in full
• Read the Bulletin, the Clarification, and the FAQs

Missouri

• Insurers are “strongly encouraged” not to cancel, nonrenew, or terminate coverage while the Bulletin is in effect, and coverage for residents of the State of Missouri should continue under all insurance policies in effect as of March 13, 2020, and shall remain in effect until such time as Executive Order 20-04 is terminated or the Bulletin is rescinded, whichever is later
• Read the Bulletin and FAQ

Montana

• “Consider” flexible payment solutions for families, individuals, and businesses; providing additional time to make payments; allowing grace periods to delay premium payments

Nebraska

• “Permits” an insurer to relax certain requirements such as notice of loss requirements, premium payment provisions, and cancellation and non-renewal timeframes – provided the insurer administers the accommodations on a consistent and fair basis

Nevada

• “Encourages” P&C insurers to consider the following relief for those affected by COVID-19: (i) providing an extended grace period before cancellation of coverage, (ii) providing flexibility with due dates for premiums, (iii) waiving late fees and penalties, (iv) providing payment plans for premiums to avoid a lapse in coverage, (v) only cancelling or non-renewing if all other efforts are exhausted
• Read the Statement

New Jersey

• Executive Order and corresponding Bulletins “directing” insurers to, among other things, provide policyholders or certificate holders experiencing financial hardship due to COVID-19 with at least a 90-day grace period to pay premiums; no late fees will be assessed and no negative data will be reported to credit bureaus during this time, and late payments will be payable over a one-year period; impacted policyholders may elect for this 90-day grace period to begin retroactively on April 1, 2020, or opt for the grace period to begin on May 1, 2020
• Read the Executive Order, the Life Bulletin and the P&C Bulletin
• See also Bulletin 20-04

New Mexico

• “Requesting” that all insurance companies refrain from cancelling or non-renewing policies of businesses and individuals negatively impacted by the disruption due to the non-payment of premiums during this public health emergency, or at a minimum, provide extended grace periods for payment of premiums
• Read the Bulletin

New York

• Executive Order and Emergency Regulation providing, among other things, that, for a 90-day period, consumers experiencing financial hardship due to COVID-19 may defer paying life insurance premiums; no late fees will be assessed and no negative data will be reported to credit bureaus during this time, and late payments will be payable over a one-year period
• Executive Order and Emergency Regulation providing, among other things, that, for a 60-day period, consumers and small businesses experiencing financial hardship due to COVID-19 may defer paying premiums for P&C insurance, including auto, homeowners, renters, workers comp, medical malpractice, livery and taxi; no late fees will be assessed and no negative data will be reported to credit bureaus during this time, and late payments will be payable over a one-year period
• Read the Executive Order, the Emergency Regulation, the Company Guidance and the Producer Guidance
• See also Circular Letter 7 

North Carolina

• In response to the Major Disaster Declaration, Commissioner Causey activated the state of disaster automatic stay of proof of loss requirements, and premium and debt deferrals, which “requires” all insurers to provide their adversely affected customers specific relief of the insureds’ payment, submission of claims and other responsibilities; the automatic stay is presently set to expire on April 26

North Dakota

• “Urges” all insurers authorized to transact the business of insurance within the state of North Dakota to provide flexibility and possible relief from certain insurance requirements to those North Dakota consumers and businesses that have been impacted by COVID-19, including extensions of premium payment deadlines, grace periods, and non-renewal or cancellation
• Read the Bulletin

Ohio

• “Orders” insurers to provide their insureds with at least a 60-day grace period to pay insurance premiums so that insurance policies are not cancelled for nonpayment of premium during the state of emergency, which means insurers are to extend such time limits by at least 60 calendar days from the last day allowed under the terms of the contract, or any longer period that may be deemed reasonable under the specific circumstances related to that insured or claimant

Oklahoma

• “Directs” P&C insurers to extend any applicable grace period for nonpayment of premium by 45 days (this grace period extension does not relieve an insured of the obligation to pay premiums)
• Read the Bulletin

Oregon

• Insurers “must” immediately institute a grace period for premium payments for all insurance issued in the state ending no later than April 23; insurers must suspend all cancellations and non-renewals for all active insurance policies in Oregon until April 23 and withdraw any notices of cancellation or non-renewal that have been issued for policies not yet cancelled or non-renewed
• Read the FAQs

Pennsylvania

• “Encourages” insurers to consider cancellation or non-renewal of policies only after exhausting other efforts to work with policyholders to continue coverage

Puerto Rico

• All insurance contracts or policies of any kind, whose expiration date is March 31, 2020, or later and are so requested by the insured, “will be” extended for an additional period of time of 30 days, under the same terms and conditions (including the amount of the premiums) of the current contract or policy; the renewal for 30 days will only be in effect until a new contract is executed by the parties or until said 30-day period ends, whichever occurs first

Rhode Island

• “Requesting” that insurers provide as much flexibility as possible to allow insureds to maintain their existing coverage by implementing and extending grace periods for premium payments, allowing payment plans for premium payments and instituting whatever other measures necessary to assist insureds in avoiding or delaying cancellation or a lapse of insurance coverage
• Read the Bulletin

South Carolina

• “Encouraging” insurers to extend premium payment deadlines, provide additional time before non-renewing or cancelling policies, extending proof of loss deadlines, and waiving fees, penalties, or other charges relating to an insured’s temporary inability to submit premium payments or otherwise respond as a result of the pandemic
• Read the Bulletin

Tennessee

• “Requesting” insurers provide employers and individuals with as much flexibility as practicable during the period of the COVID-19 public health crisis and should work with policy holders who have concerns about their ability to timely pay premiums to ensure that policy holders can maintain their existing insurance coverage
• Read the Bulletin

Texas

• “Encourages” carriers to use grace periods for payments, temporary suspension of premium payments, payment plans, and other actions to allow continuing insurance coverage as appropriate
• Read the Bulletin

Vermont

• “Requests” that all insurance companies provide their policyholders with a reasonable grace period to pay insurance premiums to avoid policies being cancelled for nonpayment of premium due to the COVID-19 public health emergency

Virginia

• “Strongly encourages” insurers to be flexible and to consider, consistent with prudent insurance practices, relaxing due dates for premium payments, extending grace periods, waiving late fees and penalties, and allowing payment plans for premium payments to otherwise avoid a lapse in coverage, and also consider cancellation or non-renewal of policies only after exhausting all other reasonable efforts to work with policyholders to continue coverage
• Read the Guidance

Washington

• “Orders” that, between March 25, 2020, and May 9, 2020, no property and casualty insurer shall cancel a policy issued for nonpayment of premium, unless specifically directed to do so by the insured, and shall provide grace periods for nonpayment of premium and shall waive otherwise applicable charges and fees associated with nonpayment of premium, such as late fees and reinstatement fees
• Read the Emergency Order

West Virginia

• Insurers “must not” issue a cancellation notice or nonrenewal notice pertaining to any insurance policy, plan or contract if the reason for cancellation or nonrenewal is a result of circumstances stemming from the COVID-19 pandemic, until further notice
• Read the Emergency Order

Wisconsin

• Insurers are “encouraged” to offer flexibility to insureds who are incurring economic hardship (which may include offering non-cancellation periods, deferred premium payments, premium holidays and acceleration or waiver of underwriting requirements)
• Read the Bulletin

With comprehensive insurance coverage and regulatory capabilities, Faegre Drinker stands ready to assist with questions and concerns regarding COVID-19.

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