How does the Executive Order 202.13 and DFS emergency amendments impact insurance?
Executive Order 202.13 puts a moratorium on the cancellation, nonrenewal or conditional renewal of property/casualty and workers’ compensation policies, including those financed by premiumfinance companies for all those facing financial hardship due to the COVID-19 pandemic. It also extends the grace period for payment of premiums and fees for life insurance for all those facing financial hardship due to the COVID-19 pandemic. In addition, any property/casualty, workers’ compensation or life insurance policyholders, including those with policies financed by premium-finance agencies who were unable to make a premium payment due to financial hardship as a result of the COVID-19 pandemic and who can still demonstrate financial hardship as a result of the COVID-19 pandemic, will be permitted to pay the missed premium over a 12-month period. This includes policies involving premium-finance agencies.
What does the moratorium do?
The moratorium prohibits an insurer from cancelling, nonrenewing, or conditionally renewing any property/casualty or workers’ compensation policy issued to an individual or small business for a period of 60 days (March 29, 2020, through May 27, 2020), for any policyholder facing financial hardship as a result of the COVID-19 pandemic.
What businesses qualify as small businesses under the moratorium?
Small business is defined as any business that is resident in New York state, is independently owned and operated, and employs 100 or fewer individuals.
Are any other lines of insurance included in the moratorium?
Yes, fidelity and surety insurance, credit insurance, marine and inland marine insurance, marine protection and indemnity insurance, credit unemployment insurance, gap insurance and involuntary unemployment insurance are all included in the 60-day moratorium.
Does the moratorium apply to nonadmitted/excess-line policies?
The moratorium only applies to excessline personal-lines policies. E&S commercial-lines policies are specifically excluded by New York Insurance Section 3426(l)(2).The DFS has confirmed that the moratorium does not apply to E&S commercial-lines policies.
When will the moratorium expire?
The moratorium will expire on May 28, 2020, for property/casualty or workers’ compensation policies.
How long is the grace period for paying life insurance premiums?
The grace period for payment of premiums and fees by a life insurance policyholder, as well as fraternal benefit society certificate holder, is extended 90 days (March 29, 2020, through June 26, 2020).
When does the grace period for life insurance expire?
The grace period for paying life insurance premiums ends on June 27, 2020.
If a policyholder misses a payment to an insurer or premium-finance agency, when is the payment due?
Any policyholder who missed a payment due to financial hardship as a result of the COVID-19 pandemic and who can still demonstrate financial hardship as a result of the COVID-19 pandemic will be permitted to pay the missed payment over a 12-month period. This also applies to any policyholder who was issued a nonpayment cancellation notice prior to the effective date of the Executive Order on March 29, 2020.
Does the 12-month repayment plan apply to nonadmitted/excess-line policies?
The 12-month repayment requirements apply to E&S personal-lines policies. However, at this time, the DFS has yet to issue a determination as to whether the 12- month repayment requirement applies to E&S commercial-lines policyholders.
Does the policyholder have to provide any proof that they are experiencing financial hardship?
Yes. Policyholders must submit written attestation to the insurer as proof of financial hardship as a result of the COVID-19 pandemic.