INSURANCE ADMINISTRATION ISSUES BULLETIN REGARDING CANCELLATION OF P&C POLICIES DUE TO NONPAYMENT
On July 2, 2020, the Insurance Administration issued Bulletin 20-28 to all property and casualty insurers and producers noting their prior request to accommodate policy holders that were unable to pay during the pandemic, also recognizing insurers’ solvency considerations. The administration will not, therefore, compel the insurers to maintain policies in force indefinitely without the payment of premiums. Carriers are asked to follow certain guidance with respect to the resumption of nonpayment cancellations of P&C policies:
- All existing legal requirements for advance notification, mailing method and content of such notices are in effect.
- An insurer may not cancel a current policy term as a result of a past due amount from a prior term.
- Payments received from insureds that are in arrears should be applied to the current policy period before being applied to a prior term’s premium due.
MD Bulletin 20-28