March 27, 2020

State Insurance Departments Issue Guidance to Life and P&C Insurers Concerning COVID-19

State insurance departments across the country are continuing to provide guidance in response to the coronavirus outbreak. Faegre Drinker has aggregated a list of current guidance from state departments of insurance requesting accommodations for non-payment of premium with respect to COVID-19.

State Insurance Department Life and P&C Policy Cancellation Limitations Concerning COVID-19

Updated as of March 27, 2020

Alaska

  • “Prohibits” the termination of insurance contracts due to non-payment until June 1, 2020
  • Read the Bulletin

Arkansas

  • The Department issued a sixty (60) day moratorium on the cancellation/non-renewal of insurance policies for the non-payment of premiums for policyholders diagnosed with/positively tested for COVID-19, but the moratorium extension is not automatic and affected policyholders must request this extension from their insurance carriers
  • Read the Bulletin

Connecticut

  • “Requesting” that all insurance companies provide their insureds with at least a 60-day grace period to pay insurance premiums so that insurance policies are not cancelled for nonpayment of premium during the coronavirus crisis
  • Read the Bulletin

California

  • “Requesting” that insurers provide their insureds with at least a 60-day grace period to pay insurance premiums so that insurance policies are not cancelled for nonpayment of premium during this challenging time due to circumstances beyond the control of the insured
  • Read the Notice

Delaware

  • Governor “orders” no insurer may, without a court order, lapse, terminate or cause to be forfeited a covered insurance policy because a covered policyholder does not pay a premium or interest or indebtedness on a premium under the policy that is due during the pendency of the declared state of emergency
  • Sixth Modification to State of Emergency
  • Commissioner “Requests” that all admitted and non-admitted insurers doing business in Delaware suspend cancellations and nonrenewals due to nonpayment of premium during the pendency of the Governor’s declared State of Emergency
  • Read the Bulletin

Florida

  • “Encouraging” insurers to only consider cancellation of policies when all possible efforts to work with the insured have been exhausted
  • Read the Informational Memorandum

Georgia

  • “Directs” all P&C insurers (Life insurers not included) to refrain from cancelling any commercial policies, including business interruption or business income coverage, for the cause of non-payment for the next 60 days (with the possibility of this time period being extended)
  • Read the Directive

Indiana

  • “Requests” all insurance companies in Indiana institute a moratorium on policy cancellations and non-renewals of any insurance policy in effect for a policyholder in Indiana to allow a grace period for any policyholder in Indiana for a period of 60-days any premium payment due from March 19, 2020 to May 18, 2020
  • Read the Bulletin and the Executive Order

Kansas

  • Commissioner cannot mandate a moratorium on policy cancellations due to non-payment of premium, but consumers are encouraged to work directly with their insurer to explore options on payment plans, extended grace periods, etc.
  • Read the FAQs

Maine

  • Insurers “must prioritize consumers’ needs” and “must make” all reasonable accommodations for late payments and other problems that are beyond the consumer’s control
  • Read the Bulletin

Maryland

  • “Encourages” insurers to make reasonable accommodations so that individuals and businesses do not lose coverage due to non-payment of premium
  • Read the Bulletin

Massachusetts

  • Insurers are “advised” to provide employers and individuals with as much flexibility as is reasonably possible during the period of the COVID-19 public health crisis to maintain their existing coverage
  • Read the Bulletin

Mississippi

  • Sixty (60) day moratorium on the cancellation/non-renewal of policies for the non-payment of premiums, effective March 24, 2020, and insurers are “directed” to work with impacted policyholders in paying the premiums that become due during the moratorium period by either allowing a payment plan or a further extension of the due date for the amount in full
  • Read the Bulletin

Missouri

  • Insurers are “strongly encouraged” not to cancel, nonrenew, or terminate coverage while this Bulletin is in effect, and coverage for residents of the State of Missouri should continue under all insurance policies in effect as of March 13, 2020, and shall remain in effect until such time as Executive Order 20-04 is terminated or this bulletin is rescinded, whichever is later
  • Read the Bulletin

Montana

  • “Consider” flexible payment solutions for families, individuals, and businesses; providing additional time to make payments; allowing grace periods to delay premium payments
  • Read the Letter

New Jersey

  • “Encourages” insurers, consistent with prudent insurance practices, relaxing due dates for premium payments and insurance policy based loan payments, extending grace periods, waiving late fees and penalties, allowing forbearance with regard to the cancellation/non-renewal of policies, allowing payment plans for premium payments, extending timeframes to complete inspections or undergo medical exams, and exercising judicious efforts to assist effected policyholders and work with them to make sure that their insurance policies do no lapse
  • Read the Bulletin

New Mexico

  • “Requesting” that all insurance companies refrain from cancelling or non-renewing policies of businesses and individuals negatively impacted by the disruption due to the non-payment of premiums during this public health emergency, or at a minimum, provide extended grace periods for payment of premiums
  • Read the Bulletin

New York

  • The Governor announced, for a 90 day period, consumers experiencing financial hardship due to COVID-19 may defer paying life insurance premiums; no late fees will be assessed and no negative data will be reported to credit bureaus during this time, and late payments will be payable over a one-year period
  • The Governor also announced, for a 60 day period, consumers and small businesses experiencing financial hardship due to COVID-19 may defer paying premiums for property and casualty insurance, including auto, homeowners, renters, workers comp, medical malpractice, livery and taxi; no late fees will be assessed and no negative data will be reported to credit bureaus during this time, and late payments will be payable over a one-year period.
  • Read the Press Release and Circular Letter 7

North Carolina

  • “Urging” insurers to consider 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, and insurers should consider cancellation or non-renewal of policies only after exhausting other efforts to work with policyholders to continue coverage

Oklahoma

  • P&C insurers (Life insurers not included) “should” extend any applicable grace period for nonpayment of premium by forty-five (45) days (this grace period extension does not relieve an insured of the obligation to pay premiums)
  • Read the Bulletin

Oregon

  • Insurers “must” immediately institute a grace period for premium payments for all insurance issued in the state ending no later than April 23; insurers must suspend all cancellations and non-renewals for all active insurance policies in Oregon until April 23 and withdraw any notices of cancellation or non-renewal that have been issued for policies not yet cancelled or non-renewed.
  • Read the Order

Pennsylvania

  • “Encourages” insurers to consider cancellation or non-renewal of policies only after exhausting other efforts to work with policyholders to continue coverage
  • Read the Notice

Rhode Island

  • “Requesting” that insurers provide as much flexibility as possible to allow insureds to maintain their existing coverage by implementing and extending grace periods for premium payments, allowing payment plans for premium payments and instituting whatever other measures necessary to assist insureds in avoiding or delaying cancellation or a lapse of insurance coverage
  • Read the Bulletin

South Carolina

  • “Encouraging” insurers to extend premium payment deadlines, provide additional time before non-renewing or cancelling policies, extending proof of loss deadlines, and waiving fees, penalties, or other charges relating to an insured’s temporary inability to submit premium payments or otherwise respond as a result of the pandemic
  • Read the Bulletin

Tennessee

  • “Requesting” insurers provide employers and individuals with as much flexibility as practicable during the period of the COVID-19 public health crisis and should work with policy holders who have concerns about their ability to timely pay premiums to ensure that policy holders can maintain their existing insurance coverage
  • Read the Bulletin

Texas

  • “Encourages” carriers to use grace periods for payments, temporary suspension of premium payments, payment plans, and other actions to allow continuing insurance coverage as appropriate
  • Read the Bulletin

Vermont

  • “Encourages” insurance carriers to be flexible with premium payment plans and premium deposit requirements for businesses that are temporarily closed due to COVID-19 mitigation actions

Washington

  • “Orders” that, between March 25, 2020 and May 9, 2020, no property and casualty insurer shall cancel a policy issued for nonpayment of premium, unless specifically directed to do so by the insured, and shall provide grace periods for nonpayment of premium and shall waive otherwise applicable charges and fees associated with nonpayment of premium, such as late fees and reinstatement fees
  • Read the Emergency Order

West Virginia

  • Insurers “must not” issue a cancellation notice or nonrenewal notice pertaining to any insurance policy, plan or contract if the reason for cancellation or nonrenewal is a result of circumstances stemming from the COVID-19 pandemic, until further notice
  • Read the Emergency Order

Wisconsin

  • Insurers are “encouraged” to offer flexibility to insureds who are incurring economic hardship (which may include offering non-cancellation periods, deferred premium payments, premium holidays and acceleration or waiver of underwriting requirements)
  • Read the Bulletin

With comprehensive insurance coverage and regulatory capabilities, Faegre Drinker stands ready to assist with questions and concerns regarding COVID-19.

As the number of cases around the world grows, Faegre Drinker’s Coronavirus Resource Center is available to help you understand and assess the legal, regulatory and commercial implications of COVID-19.

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