ELANY ISSUES BULLETIN CLARIFYING COVID-19 GRACE PERIOD ISSUES AND NOTIFICATIONS
On May 13, 2020, the Excess Line Association issued Bulletin No. 2020-24 outlining some clarifications on required premium grace periods for surplus lines products, including links to FAQs and the Emergency Regulation. The bulletin addresses the following issues regarding the cancellation/nonrenewal moratorium, premium payment grace period and notification requirements:
- The cancellation/nonrenewal moratorium, premium payment grace period and notification requirements apply to certain excess line policies (e.g., personal lines policies and small business commercial lines policies that include coverage for damage to real property against the peril of fire).
- The cancellation/nonrenewal moratorium does not prohibit issuance of cancellation, nonrenewal and conditional renewal notices.
- If an insurer attempts to cancel a policy within 60 days of issuance but cannot because of the cancellation/nonrenewal moratorium, or attempts to nonrenew a policy at the end of a three-year cycle but cannot due to the moratorium, the effective date of the cancellation, nonrenewal or conditional renewal is deferred for 60 days.
- Insureds may claim a COVID-19 financial hardship at least through June 6, 2020.
- The bulletin also reminds insurers that if an insured asserts a hardship, the cancellation, nonrenewal or conditional renewal notice cannot be effective until 60 days from the effective date of the cancellation, nonrenewal or conditional renewal.
ELANY Bulletin 2020-24