The Commissioner issued on Monday, Bulletin 2020-05, entitled “Flexibility in the Issuance and Administration of Insurance during COVID-19 (Coronavirus) Public Health Crisis.”
In this bulletin, the Commissioner states that the Division wants all carriers whether issuing property and casualty, life and annuity, or health products to be looking for ways to be flexible in collecting premiums and find ways to address what the Division hopes will be a short-term disruption in the business environment.
Premium payment bulletin issued same day Governor orders shutdown of non-essential businesses for two weeks
According to the bulletin, the Division sees growing financial stress for policyholders as employers reduce or suspend operations and how this may impact the payment of all expenses, including premium payments. Perhaps, not coincidentally, the Commissioner published his bulletin the same day as the Governor issued his shutdown order of non-essential in-person business operations. See Agency Checklists article published with this article, “Insurance Exempted from Order Effective at Noon Today Shutting Down Non-Essential Businesses.”
Based on the dramatic impact to the Commonwealth’s economy of the rapid spread of COVID-19, the Division states the Division “is notifying Massachusetts Carriers that it expects them to take all necessary steps to preserve individual and employer access to insurance coverage during this emergency period.”
Listing of suggested actions for all carriers
The bulletin lists measures indicated by the Division “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, despite policyholders’ growing concerns about being able to send their premiums in on time.”
Some of the actions the Division advises are:
- Carriers should explore ways to streamline or delay the submission of administrative paperwork that may jeopardize the maintenance or issuance of coverage.
- Carriers should explain grace periods that can allow distressed policyholders who experience significant financial hardship to delay payments to avoid termination of coverage.
- On a case-by-case basis, Carriers should also work with employers or individuals experiencing financial hardship to find the best ways to address concerns with the timing of premium payments to delay any cancellation of coverage for non-payment and collection activity.
- Carriers should explore all possible ways to relax due dates for premiums payments; to extend grace periods; waive late fees, non-sufficient funds fees, installment fees, and penalties; allow payment plans for premiums payments; assist affected policyholders to find ways that insurance policies do not lapse, and consider cancellation or non-renewal of policies only after exhausting other efforts to work with policyholders to continue coverage.
Additional suggestions for health insurers on continuing coverage
Not surprisingly, in this pandemic environment, the Division has specific considerations for health insurers on continuing coverage, including:
- Health insurance Carriers should be prepared to explain grace periods that may be available and whether the Carrier may be willing to allow employers to continue to pay for employees’ health coverage during periods when the employees are furloughed or laid-off.
- Health insurance Carriers should have personnel available to explain programs allowing for laid-off employees to purchase COBRA or other coverage targeted to the recently unemployed.
- Health insurance Carriers are also encouraged to work with employers to allow flexibility in submitting enrollment, renewal, or other information necessary to begin or renew health coverage.
Copy of complete bulletin
For agents or insureds dealing with a carrier over premium payment issues, grace periods, late fees, and the other charges or contract terms mentioned above, may find a complete copy of the Commissioner’s bulletin useful. This full version has the number for a designated contact person at the Division. For a link to the original, click HERE.