Coronavirus Cancellation Policy Recommendations

On March 30, 2020, the Department of Insurance issued Bulletin No. 2020-05 in relation to policy cancellations or nonrenewals due to the coronavirus (COVID-19) pandemic. The bulletin applies to all commercial and personal lines of insurance, including property, casualty, disability, accident and health, and life insurance policies.

The bulletin follows Gov. Ivey’s declaration of a public health emergency in the state and “shelter in place” orders issued by local government entities. These mitigation efforts to limit the spread of the COVID-19 virus have resulted in worker displacement and business disruption.

As a result, affected individuals and entities may be unable to timely pay insurance premium payments. Accordingly, the Commissioner of Insurance recommends insurers consider certain actions for policies in force as of March 13, 2020. These measures include relaxing premium payment due dates, extending grace periods, waiving late fees and penalties, and allowing premium payment plans to avoid a lapse in coverage. Insurers are asked to consider policy cancellation only after expending all efforts to work with policyholders to maintain coverage.

Insurers and producers are also requested to provide alternative payment options, such as online or electronic transfers, to avoid the need for in-person transactions.

The bulletin is primarily directed at insurers. However, employers should also be aware of these developments and the possibility of premium payment flexibility, as necessary.

Bulletin No. 2020-05 »