In response to public health disaster emergency declarations for the novel coronavirus disease (COVID-19), some states issued bulletins which prohibit insurers from cancelling or nonrenewing policies for nonpayment of premiums. Recently, Proctor brought to your attention a statewide moratorium issued in Alaska. In addition, we would like to draw your attention to additional states that have taken similar actions prohibiting insurers from cancelling insurance policies for nonpayment, as follows:
- Washington Insurance Commissioner issued a bulletin (EO 2020-03) effective March 25, 2020 and will remain in effect until May 9, 2020.
- Oregon issued a bulletin that is in effect from March 25, 2020, and will remain in effect until April 23, 2020.
- Mississippi (Bulletin 2020-03, amended, and FAQs) directs insurers to implement a 60 day moratorium effective March 24, 2020 until May 23, 2020.
- Louisiana issued an emergency rule (ER 40) that prohibits the cancellation or nonrenewal of policies that were in force and effect on March 12, 2020, until the Governor lifts the state of emergency or until the expiration of the emergency rule on May 12, 2020, whichever comes first.
- Ohio (Bulletin 2020-07) requires insurers to provide at least a 60-day grace period to pay insurance premiums so that they are not cancelled for nonpayment during this state of emergency.
These directives do not remove the insureds’ obligation to pay premiums; instead, they limit policy cancellations for late payment.
If Proctor is providing lender placed borrower notification services for your organization, Proctor will temporarily suspend lender placement notification activity in these states. Lender placement notifications will restart, as applicable, after the moratoriums are lifted. If your organization sends the lender placement notifications, Proctor encourages clients to review their internal lender placement letter procedures to ensure compliance with the moratorium.
Proctor will continue to monitor this topic and provide updates as they develop. Please contact your client representative if you have any questions.