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Property and Casualty

COVID-19 Report

close up of a coronavirus molecule

Property and Casualty

COVID-19 Report

New York

For Benefits Compliance specific state updates for New York click here.

On March 19, 2020, the New York Department of Financial Services issued guidance to all insurance companies requesting them to support consumers and small businesses that can demonstrate financial hardship caused by COVID-19 in the following ways (in part):

  • Offering payment accommodations, such as allowing consumers to defer payments at no cost, extending payment due dates, or waiving late or reinstatement fees
  • Working with consumers to avoid cancellation of insurance policies for a) failure to pay premiums on time, b) discovery of acts or omissions that may have increased the hazard insured against, or c) physical changes in the property insured subsequent to issuance or last renewal that result in the property no longer meeting the insurer’s underwriting standards
  • Working with consumers to avoid nonrenewal of insurance policies where a consumer fails to timely respond to a nonrenewal notice

NY Insurance Circular Letter No. 7 (2020)

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April 17, 2020

On March 6, 2020, the New York Department of Financial Services issued Insurance Circular Letter No. 4 to all authorized property/casualty insurers noting that under New York law, cancel for any reason (CFAR) benefits in the travel context do not technically qualify as insurance because the cancellation of a trip “for any reason” does not depend on the occurrence of fortuitous event. However, an insurer may sell CFAR benefits if it can demonstrate that the benefits are necessarily or properly incidental to the kinds of business that the insurer is authorized to write. If CFAR benefits are sold to a consumer who is also purchasing a standard travel insurance policy, CFAR benefits must be reflected in a standalone contract that is separate from the insurance policy.

DFS also reminds insurers that COVID-19 may be a covered peril under a travel insurance policy. Pursuant to Insurance Law § 3452, trip cancellation/interruption insurance is authorized as a property-type of insurance, regardless of the underlying reason for the cancellation/interruption so long as it is fortuitous. A travel insurer can also provide coverage specific to COVID-19. In either case, the trigger for coverage must be stated clearly in the policy.

NY Insurance Circular Letter No. 4 (2020)

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April 16, 2020

March 27, 2020, New York State Assembly introduced a bill, A10226, requiring every policy of business interruption insurance to include among the covered perils under that policy, coverage for business interruption during a period of a declared state emergency due to the 2019 (COVID-19) pandemic.

The coverage required indemnifies the insured, subject to the limits under the policy, for any loss of business or business interruption and applies to policies issued to insureds with less than 100 eligible employees (works 25+ hours per week) in force on the effective date of this act.

This would be funded by a “special purpose apportionment” the New York Superintendent of Insurance would be authorized to collect from all insurers doing business in the state, under the proposed legislation. The bill is limited to insureds in New York with fewer than 100 full-time employees with a working week of 25 or more hours.

We will continue to watch and report on the evolution of this bill.

NY A10226

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April 02, 2020

On March 30, 2020, the New York Department of Financial Services promulgated an Emergency Regulation in which property and casualty insurers are required to provide flexibility to consumers experiencing financial hardship caused by the pandemic by extending to 60 days the grace period for the payment of premiums and fees under auto, homeowners and renters insurance policies, among others. An attestation by the insured concerning financial hardship will be sufficient proof. The Rule also clarified that insureds will be able to pay the delinquent premiums over a 12-month period.

NY Emergency Rule

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April 08, 2020

On April 3, 2020, ELANY issued Bulletin No. 2020-17 clarifying that DFS has confirmed that the moratorium does not apply to excess line commercial policies and policyholders; however, the moratorium does apply to excess line personal lines policies and policyholders.

ELANY Bulletin No. 2020-17

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May 08, 2020

March 27, 2020, New York State Assembly introduced a bill, A10226, requiring every policy of business interruption insurance to include among the covered perils under that policy, coverage for business interruption during a period of a declared state emergency due to the 2019 (COVID-19) pandemic.

The coverage required indemnifies the insured, subject  to  the  limits  under  the policy, for any loss of business or business interruption and applies to policies issued to insureds with less than 100 eligible employees (works 25+ hours per week) in force on the effective date of this  act.

This would be funded by a “special purpose apportionment” the New York Superintendent of Insurance would be authorized to collect from all insurers doing business in the state, under the proposed legislation. The bill is limited to insureds in New York with fewer than 100 full-time employees with a working week of week of 25 or more hour.

There are similar bills proposed in the Senate: S 8178, which would apply only to those companies with 100 or fewer employees, and S 8211, which would apply to businesses with up to 250 employees.

We will continue to watch and report on the evolution of this bills.

NY A10226NY 10327S8178S8211A

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June 01, 2020

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

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July 14, 2020

On July 7, 2020, ELANY issued Bulletin No. 2020-39 in which it notes the expiration of the cancellation/nonrenewal/conditional renewal moratorium and premium payment grace period requirements prescribed by Executive Order 202.13, and its related Department of Financial Services Extended Emergency Regulation, which expired on July 6, 2020. After July 6, 2020, insurers are no longer required to grant new moratoriums and premium payment grace periods to policyholders claiming a COVID-19 financial hardship. Relief granted prior to July 7, 2020, must be administered pursuant to the requirements of the now expired executive order and emergency regulations.

NY Bulletin No. 2020-39

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