Big I NY has asked the Department of Financial Services for two amendments to the current emergency insurance regulation, which imposes a moratorium on cancellations and non-renewals, and grants a 12-month grace period for repayment of premiums, for policyholders suffering hardship due to COVID-19.
We expect the emergency regulation will be amended or re-issued prior to its expiration on June 28th, since the governor has ordered that the cancellation moratorium and grace period provisions remain in effect until July 6th (a detailed discussion of the reason for the two different dates follows).
We have asked the DFS to:
- Remove the requirement that producers notify customers of the provisions of the regulation, or at a minimum, codify that (consistent with the Department’s prior guidance):
- Producers do not need to duplicate notice already sent
- Email delivery is acceptable
- Prior consent from the customer is not required
- Clarify the premium finance regulation to state that the obligation to offer alternative payment arrangements applies separately to each missed installment payment.
These common-sense changes will make it less burdensome for agents and brokers to comply with the regulation, and provide customers with financed policies greater clarity about the protections they are afforded.
Why the two different dates? It comes down to the relationship between executive order and an emergency regulation. To reiterate, the cancellation moratorium and grace period provisions are currently in effect until July 6th.
On March 29th, Governor Cuomo issued Executive Order 202.13, which among other things, directed the DFS to adopt an emergency regulation to impose a moratorium on policy cancellations and non-renewals, and provide a 12 month grace period for repayment of premiums.
On March, 30th, the DFS adopted the required emergency regulation, which remains in effect as long as dictated by the Governor’s Executive Order and subsequent extensions. However, as a matter of law, emergency regulations are only effective for 90 days, after which they must be renewed (for 60 days at a time) or expire.
Currently, the Governor’s executive order dictates that the cancellation moratorium and repayment grace period are in effect until July 6th. However, the emergency regulation expires on June 28th. Thus, the DFS must either extend the order (60 days), or issue a new emergency regulation which complies with the governor’s directive in E.O. 202.13 (90 days).