Insurance Department Calls for Premium Grace Period

On March 24, 2020, the Insurance Department issued Bulletin Number IC-40 regarding insurance premium payments during the coronavirus (COVID-19) pandemic. The bulletin is directed at admitted and non-admitted insurance companies, licensed producers and other interested parties.

Due to the significant economic disruptions and loss of income following the COVID-19 outbreak, consumers and businesses have been substantially impacted. As a result, the bulletin requests insurers providing any coverage in the state, including life, health, auto, property, casualty and other types, to offer a premium grace period.

Specifically, the Department requests that all insurance companies provide their insureds with at least a 60 day grace period to pay insurance premiums and thus avoid cancellation for nonpayment. The request is intended to be applied to premiums due after the initial premium has been made to secure coverage. It is not intended as a forgiveness of the premium, but an extended grace period for payment without penalty or interest. The memo also requests that agents and brokers who accept insurance premium payments on behalf of insureds provide customers with alternative prompt payment options, such as online payments, to eliminate the need for in person payments.

Employer and brokers should be aware of this premium grace period request.

Bulletin Number IC-40  »