Although many authors have written the same message across different industries, these are unprecedented times that have our governments, health professionals, financial markets, and so many other industries. Everyone is scrambling to address what has happened and anticipate what may come next. These preparations include the insurance markets—state insurance departments around the U.S. are rushing to put out guidance in the forms of bulletins, regulations, press releases, and other forms of notices. Several department websites over the past couple of weeks, along with the National Association of Insurance Commissioners (NAIC), have put out a myriad of information. While more changes and notices are expected to appear, it’s crucial to highlight what many industries are seeing so far and what may be coming down the pipeline.
Some of the key bulletins and guidance include items like health insurance matters, policy cancellation limitations, telemedicine guidance, clarifications on business interruption insurance, and travel insurance. Several different departments have issued moratoriums on the cancellation/non-renewal of policies for non-payment of premiums, commonly 60-days. By suspending certain limitations on telemedicine services, insurers are pushing policyholders to use telemedicine instead of in-person visits. Departments are now encouraging insurance companies to allow, when requested, mid-term audits, self-audits, or other adjustments to rating bases on commercial policies allowing for a reduction in the associated premium to more accurately reflect risk exposure. There has also been significant space allotted for providing basic explanations of business interruption insurance. Some of the key points to consider is that most policies, written by traditional admitted companies, are likely to exclude losses resulting from bacteria or viruses. However, some surplus line policies can include this coverage. We have also seen legal challenges to some of these policies—the results are still to be determined.
Even if your department is closed to the public for physical visits, information should be continuously available on its website to keep you abreast of COVID-19 matters, along with phone numbers should you need assistance. The NAIC can also keep you apprised of general insurance concerns on a broader level. It is important to remember, though, that the state insurance department is your primary regulatory authority. So, be sure that both policyholders and companies closely track the information provided by state regulators.
For more information and assistance regarding what guidance is being passed down for insurers, reach out to your local CRI advisor.