Premium Payment Leniency Requested

On March 25, 2020, the Office of Insurance Regulation (OIR) issued Informational Memorandum OIR-20-04M, which provides continued guidance in relation to the coronavirus (COVID-19) emergency. The memo, which is directed at health insurers and other health entities regulated by the OIR, addresses the treatment of policyholders in the state.

As background, prior Executive Orders 20-51 and 20-52 established COVID-19 protocols and declared a state of emergency in the state. The current memo outlines certain measures and accommodations to support the state’s COVID-19 response efforts.

The memo recognizes that social distancing guidelines have resulted in worker displacement and business disruptions. As a result, insurers are encouraged to be flexible with premium payments in order to prevent a lapse in coverage. Suggested measures include relaxing due dates, extending grace or reinstatement periods, waiving late fees and penalties and allowing payment plans. Insurers are urged to consider policy cancellation only if all other possible alternatives have been expended.

The guidance addresses other COVID-19 considerations, including the acceptance of electronic communications from policyholders where handwritten statements would normally be required. It also provides a 30-day extension for annual statements due to be filed with OIR by regulated entities, including insurance administrators and multiple-employer welfare arrangements, on or before May 1, 2020.

Although the memo is directed at insurers, employers may want to be aware of these developments.

Informational Memorandum OIR 20-04M »