As the COVID-19 crisis makes it much more difficult for employers to make premium payments and disrupts the submission and processing of insurance claims, RPNA wanted to alert its friends and clients concerning recent efforts by the California Department of Insurance (CDOI) to assist policyholders. Specifically, Insurance Commissioner Ricardo Lara has recently issued two significant notices requesting leniency from carriers during this extraordinary and challenging time of what we believe is a Social Crisis.
First, on March 18, 2020, Commissioner Lara requested that all insurance companies provide a 60-day grace period to pay insurance premiums so that insurance policies are not cancelled for nonpayment of premium. And, just this past Friday, Commissioner Lara issued a second notice advising insurance companies that they should “not attempt to enforce policy or statutory deadlines” on policyholders until ninety (90) days after the end of the statewide COVID-19 state of emergency. This includes the submission of proofs of loss, claim forms, and any other policy, statutory, or insurer imposed deadlines where the failure to comply could result in the forfeiture or limitation of benefit rights under the policy.
With these notices from the Insurance Commissioner, insured employers now have an opportunity to challenge an insurance carrier who is attempting to cancel or not renew a policy, or deny a claim based on the failure to submit timely information.
Under normal circumstances, insurers will often insist on strict compliance with claim processing time limits and payment of premium. They will often reject claims or cancel policies if these deadlines are not strictly met. But with social distancing, and the limited ability of skeletal staff working remotely, the normal interaction between carriers and their insureds has been thrown into disarray. Indeed, insured employers may be finding it extremely difficult to make premium payments, or to obtain new or replacement coverage if their carrier has threatened to cancel or not renew their policy. While no California court has weighed in on Commissioner Lara’s notices, given the strong California public policy concerning the deference that courts give to the CDOI generally, these notices should be very beneficial in assisting insureds who are under pressure to keep their business afloat to work with their carriers and brokers concerning making claims and premium payments.
RPNA is fervently working with our family of clients to seek relief from threatened cancellations and non-renewals. If you are experiencing difficulty in these areas, feel free to contact us with any concerns you may have.
Please contact Nicholas Roxborough at (818) 992-9999, ext. 222, or David Ginsburg, at ext. 228.
In the meantime, we hope you are healthy and staying safe.
Here are the links to the CDOI Notices:
http://www.insurance.ca.gov/0400-news/0100-press-releases/2020/upload/nr030-BillingGracePeriodNotice03182020.pdf
http://www.insurance.ca.gov/0400-news/0100-press-releases/2020/upload/nr035ExtPolicyClaimCOVID04032020.pdf
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