New York Department of Financial Services Issued Emergency Regulations Following Governor Cuomo’s Executive Order 202.13

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Published: 04.06.2020

What: The New York Department of Financial Services issued emergency regulations following Governor’s Executive Order 202.13 to require insurers and premium finance companies to provide grace periods for the payment of premium and premium repayment by certain policyholders experiencing financial hardship as a result of COVID-19.   

When: The grace periods and rights under the Emergency Regulation are effective through April 28,2020 unless extended further by another executive order.
 
Application: The Emergency Regulation applies to:

• life insurance and annuities issued on an individual or group basis, and
• a broad range of personal lines and commercial property and casualty covers including, for example, home, auto, renters, fire, and liability insurance, and workers’ compensation insurance. The protections include individuals and small businesses with 100 employees or less, which are resident in New York State, individually owned and operated.  

Life Insurance and Annuity Contracts. 
Issuers of life insurance and annuity contracts are required to provide the following to those policyholders or certificate holders who can demonstrate financial hardship due to COVID-19:

• Extend the grace period to 90 days for the payment of premiums and for the exercise of rights or benefits under a policy or certificate
• Allow policyholders who did not make a timely premium payment to pay such premium in equal monthly installments over a 12-month period following June 1, 2020.  
• Waive any late fees on policyholders who do not make timely premium payments do not report such policyholders to a credit reporting agency or debt collector during the 90-day moratorium period. 

Property and Casualty Insurance
Issuers of property and casualty insurance are required to provide the following to those policyholders who can demonstrate financial hardship due to COVID-19:

• Provide a 60-day moratorium on the cancellation, non-renewal, or conditional renewal of policies for affected policyholders.
• Allow policyholders who did not make a timely premium payment to pay such premium in equal monthly installments over a 12-month period following June 1, 2020.  
• Waive any late fees on policyholders who do not make timely premium payments do not report such policyholders to a credit reporting agency or debt collector during the 60-day moratorium period. 

Note: Under the Emergency Regulation, the above requirements also apply to premium finance companies, subject to safety and financial soundness considerations of the premium finance companies.  Where a property and casualty policyholder does not make the first installment payment to the premium finance company after the 60-day grace period and the premium finance company cancels the policy prior to the next payment, the insurer must return the gross unearned premiums due under the policy to the premium finance company for the benefit of the policyholder on a pro rata basis, calculated as if the property and casualty insurance policy had been canceled 60 days prior to the effective date of such cancellation.

How: Policyholder’s written attestation demonstrating financial hardships:

• Policyholders who are unable to make a timely premium payment due to financial hardship as a result of the COVID-19 pandemic may provide the insurer a written attestation.

• Policyholders may submit to the insurer a statement whereby they swear or affirm in writing under penalty of perjury that they are experiencing financial hardship as a result of the COVID-19 pandemic.
• The insurer or premium finance agency, as applicable, shall accept the above written attestation as satisfactory proof.  Such statement is not required to be notarized.

Insurance Brokers and Agents to do list:

• Email or mail a notice to affected clients by April 13, 2020. A copy of the model notice is found in the link below.
• Insurance brokers and agents with websites should post the information on their websites as soon as possible. The Department encourages supplemental dissemination of the content of the notice obligations by other means, including social media. 
• Maintain records of the communications with clients, electronic or otherwise.

Executive Order 202.13 signed by Governor Cuomo on March 7, 2020:
https://www.governor.ny.gov/sites/governor.ny.gov/files/atoms/files/EO_202.13.pdf
 
Department of Financial Services Amendment Regulation signed on March 29, 2020:
https://www.dfs.ny.gov/system/files/documents/2020/03/re_consolidated_amend_pt_405_27a_27c_new_216_text.pdf
 
Guidance to Insurance Producers Regarding Electronic Delivery of Notices Pursuant to New 11 NYCRR § 229.5(b) and 3 NYCRR § 405.6(b)(4): https://www.dfs.ny.gov/industry_guidance/electronic_notice_obligations
 
Model Producer Notice - Life Policies, Annuity Contracts and Fraternal Benefit Society Certifications:
https://www.dfs.ny.gov/industry_guidance/coronavirus/model_producer_notice/life_annuity_fraternal