For Benefits Compliance specific state updates for Pennsylvania click here.
Department Issues Notice Concerning Premium Grace Periods
On March 19, 2020, the Pennsylvania Department of Insurance issued a Notice to all insurance companies encouraging them to consider the following actions:
- Consistent with prudent insurance practices, relaxing due dates for premiums payments, extending grace periods, waiving late fees and penalties, and allowing payment plans for premiums payments to otherwise avoid a lapse in coverage.
- Consider cancellation or nonrenewal of policies only after exhausting other efforts to work with policyholders to continue coverage.
DEPARTMENT ISSUES NOTICE TO AUTO INSURERS URGING FLEXIBILITY
April 08, 2020
On March 19, 2020, the Pennsylvania Department of Insurance issued a Notice to auto insurers. The Department notes that for policyholder licenses scheduled to expire from March 16, 2020, through March 31, 2020, the expiration date is now extended until May 31, 2020. The Department is expecting that insurers will apply exclusions, rates or underwriting rules as if the policyholder’s license expires May 31, 2020, rather than in March. Insurers are also instructed that a declining credit score may not be used to increase a premium at renewal.
LEGISLATION INTRODUCED CONCERNING BUSINESS INTERRUPTION INSURANCE
May 08, 2020
On April 3, 2020, the Pennsylvania State Legislature introduced House Bill 2372 requiring any insurance policy in force on March 6, 2020, that insures against loss or damage to property, which includes business interruption coverage, shall be construed to include coverage for business interruption due to global virus transmission or pandemic. It applies only to insureds that have fewer than 100 eligible employees in the Commonwealth.
The Pennsylvania Senate proposed two similar bills. SB1114, proposed on April 15, requires payments of 100% of coverage of claims by small businesses and 75% of claims made by all other claimants.
The Pennsylvania Senate’s S 1127, proposed on April 30, would apply to any business, regardless of size, that carries a commercial property policy. That bill does not direct insurers to make payments of business interruption claims, however, and instead defines certain terms applicable in many such policies. For example, S 1127 states that if a covered property is within a municipality where “the presence of the COVID-19 coronavirus has been detected,” that property has suffered damage. Further, it defines the Pennsylvania governor’s emergency closure order as constituting “an order of civil authority under a first-party insurance policy limiting, prohibiting or restricting access to non-life-sustaining business locations in [Pennsylvania] as a direct result of physical damage at or in the immediate vicinity of those locations.” If enacted, the bill would effectively override many of the defenses insurers assert in response to COVID-19-related business interruption claims.
PA House Bill 2372; S 1114; S 1127
INSURANCE DEPARTMENT ISSUES NOTICE TO AUTO INSURERS TO HIGHLIGHT PENNDOT EXTENSIONS AND URGE FLEXIBILITY
May 08, 2020
On March 31, 2020, the PA Insurance Department issued a notice to all to all insurers writing automobile insurance, personal and commercial, within the Commonwealth of Pennsylvania during the COVID-19 pandemic. The notice directs insurers to apply policy provisions consistent with PennDOT guidance surrounding license expiration dates and encourages additional flexibility in meeting the needs of policyholders.