Across the country, the COVID-19 pandemic and other events continue to impact the insurance industry. Potentially critical developments in three states (California, Louisiana and Maryland) are discussed herein.
Recent InsurTech Updates
California issued a « pre-notice » with respect to holding an Export List hearing later this year. State officials have not yet identified the day or time, but are requesting interested parties to let them know the names of any coverages that they want added to (or removed from) the current Export List. Any parties identifying such coverage will still be required to submit supporting documentation by a date to be determined by the California Department of Insurance, but the Department uses this pre-notice process to gauge the level of interest in the next Export List hearing. Please contact us if you have any questions about this process or if we can assist with getting something added to the Export List.
California provided Notice that Insurance Commissioner Ricardo Lara will soon be issuing a new moratorium on cancellation and nonrenewals of homeowners insurance in certain ZIP Codes impacted by wildfires. This Notice comes just as last year’s moratorium is coming to an end. The Commissioner cannot simply extend the moratorium from last year; rather he must establish that there are new wildfires that were declared emergencies and identify affected ZIP Codes that will be affected by this new moratorium. There will likely be some overlapping ZIP Codes, which would have the same practical effect as extending the nonrenewal moratorium in those ZIP Codes for a second year, but the new moratorium would be based on new emergency declarations and will likely include some ZIP Codes that were not covered by the expiring moratorium. Carriers need to be very careful as they issue nonrenewal notices based on the expiration of last year’s moratorium to ensure that those homes are not included in the forthcoming 2020 moratorium.
Louisiana issued Emergency Rule 45 with respect to insureds in 16 specified parishes impacted by Hurricane Laura. By statutory reference, the rule applies to surplus lines insurers and foreign and alien insurers, as well as virtually all other types of insurers providing coverage in these parishes, and includes the following provisions:
The Emergency Rule suspends any notice of cancellation, nonrenewal, non-reinstatement or any similar notice with respect to any insurance coverage in these parishes if the coverage was in force as of 12:01 am on August 27, 2020;
Any such notices can be reissued with the new start date only after the Emergency Rule expires;
Insurers can issue a notice of cancellation for nonpayment of premium during the Emergency Rule, but the policy cannot be canceled until after the Emergency Rule expires;
Policies can be canceled for fraud or material representation, or upon written request or with the written concurrence of the insured;
Policies that would otherwise terminate during the Emergency Rule continue in force at the previously established premium or rate until after the Emergency Rule expires;
Claims notification procedures and timing requirements are suspended during the Emergency Rule; and
Insurers may not impose any interest, penalty or other charge as a result of the suspensions ordered in the Emergency Rule.
There are additional details, including substantial health insurance restrictions, about which we can advise upon request.
Maryland issued a Bulletin calling on all admitted property and casualty insurers to submit an informational filing by October 31, 2020, detailing the insurers’ actions taken in response to the insurance bulletins issued by the Maryland Insurance Administration in response to COVID-19 as well as any other measures taken by the insurers in response to COVID-19. The filing must include the following information:
Voluntary suspensions of cancellations for nonpayment of premium or other reasons, including the time period of the suspension and the number of policyholders that benefitted from the suspension of pre-COVID-19 cancellation protocols;
Details of adjustments made to claim handling procedures to ensure the safety of policyholders and employees;
Details of rate relief programs, including all premium reductions, credits and/or dividends issued, with the effective date parameters for such actions and the total dollar amount of savings for Maryland policyholders;
Details of any broadened coverage provided (for example, suspension of the commercial use exclusion in private passenger auto policies), including the effective date parameters of such actions; and
Details of any other significant actions taken in response to COVID-19 to ensure the insurers’ continuity of operations, assist policyholders, and protect the safety of employees.
The filing must be submitted via the System for Electronic Rates & Forms Filing (SERFF) and categorized as a « rate/rule » filing. There is no fee associated with this filing.
* * *
Please contact Dan Brown, John Mulhern or your MWE relationship partner if you have any questions or need advice with respect to these or other ongoing state and federal developments.