This is a reminder that, even with a pandemic going on, insurance agencies and brokerages must file the Certification of Compliance required by New York's cybersecurity regulation for financial services companies. You have until Monday, June 1.
In the past, the deadline for filing the certification was Feb. 15. However, in late 2019 the New York State Department of Financial Services announced that it would propose a change to the regulation, moving the deadline to April 15. When the COVID-19 pandemic hit, the department announced that it was giving all financial services companies an extra 45 days to file. The department's website now states that the deadline is June 1.
You can file the certification on the department's cybersecurity portal. Step-by-step instructions are available for download from the Compliance Resources page within the Cybersecurity section of the Big I New York website.
The New York State Department of Financial Services today announced that it was extending the expiration of individual insurance agent and broker licenses through July 8. The move grants producers an additional 45 days to renew their licenses.
On March 25, the department announced that it was suspending the expiration of producers' licenses for 60 days, through May 24, due to anticipated difficulty for producers to meet continuing education requirements during the current pandemic. All licenses with expiration dates between those dates were automatically extended to expire on May 25. Today's announcement pushes that expiration date back to July 9. For example, a license scheduled to expire on May 22 will now expire on July 9.
Visit the Big I NY Education Calendar to find webinars that you can take to meet the continuing education credit requirements.
With the official end of "New York State on PAUSE" imminent, a survey shows that Big I New York members are taking the first steps toward more normal conditions with care. While a siginificat number of them continued to work from their offices after the stay-at-home order shuttered non-essential businesses, those that did not are bringing staff back gradually and with an eye toward employee safety and security.
The survey started on May 12 and drew responses from all corners of the state. Of those who responded, more than one in four said that they never stopped working at their office locations. Of the rest, roughly equal numbers said they would bring staff back immediately or would continue working remotely for the time being. The rest expected to have their staff back within a month.
Members are aware of their employees' comfort level with working in the office during a pandemic. More than a third said that their employees who are uncomfortable returning to the office will continue to work from home. A smaller number will bring staff back in stages, with about the same number bringing everyone back immediately and a fraction keeping everyone home for now.
Almost half (45%) of members said they will watch the news to determine whether or when to let third parties into their offices. At opposite ends of the spectrum, 18% will let customers and carrier representatives visit immediately and 17% will keep their doors shut for the foreseeable future.
One thing seems certain: Employees will not be rubbing elbows anytime soon. A full 86% of respondents said they will maintain at least six feet of separation between employees. Three-quarters will require handwashing and sanitizing, use of masks and other personal protective equipment, and regular cleaning of surfaces and equipment. Smaller numbers plan employee training (70%), making employees responsible for monitoring their own health (59%), and posting reminder signs around the workplace (53%). In addition, some respondents say they are erecting physical barriers between workstations (one member sent photos of plastic sheets hanging between desks), closing lunchrooms and conference rooms, removing customer chairs from lobbies and offices, putting up plexiglass to separate staff from customers, and taking away reuseable drinking cups.
The survey asked members to identify things they need from Big I New York at this time, and several provided thoughtful answers. Some needs we may be able to fulfill (guidance, information on regulations); others may be more difficult (sources for obtaining cleaning supplies.) One member asked for safe transportation in Manhattan. We're deferring to the governor and the mayor on that one. We will pursue some of the non-transportation related requests in the coming days and weeks.
The survey had drawn 426 responses as of late Thursday afternoon, with 25% of them coming from Long Island. The Hudson Valley was next (15%) and Western New York was third with 12%. New York City made up 7% of responses, and the rest of the state was also in single-digits.
Upstate Results Downstate Results
For more COVID-19 resources, visit www.biginy.org/coronavirus.
Big I New York thanks National General, in support of Adirondack Insurance Exchange, for its $250,000 donation to the Trusted Choice COVID-19 Relief Fund to specifically benefit members of Big I New York! We know that Big I New York members are experiencing different hardships, incurring new expenses to serve their customers and set their team up for various degrees of remote work and eventual return to the office. Members are making new and necessary investments in many areas that were not anticipated or planned, such as:
- Enhancing cybersecurity protocols for remote workers
- Implementing new communication tools to stay connected with their staff, carriers and customers
- Updating human resource policies and procedures
- Engaging with outside professionals to ensure agency operations adapt to new regulations and government guidance
- Purchasing personal protection devices for staff
- Implementing new safety and health measures for office locations
- Purchasing equipment for staff to work effectively and comfortably while remote
Through this generous donation, Big I New York members may be eligible to receive a minimum grant from the Trusted Choice COVID-19 Relief Fund of $1,000. Submit your application and ALL receipts and back up documentation directly to the Trusted Choice COVID-19 Relief Fund.
Again, we offer a heartfelt thank you to National General, in support of Adirondack, for partnering with Big I New York to recognize the important role that independent insurance agents play in advising their clients through this challenging time and helping to ease some of the burden.
New York Gov. Andrew Cuomo has extended for 30 days an order that prohibits insurance carriers from terminating some policies and requires them to be lenient with policyholders suffering financially from the COVID-19 pandemic. The requirements, which were scheduled to expire on May 7, will now expire on June 6. Big I New York wrote to the governor last week urging him to extend the requirements' duration.
The governor issued an executive order on March 29 that required the state Department of Financial Services to issue regulations setting a 60-day moratorium on insurers cancelling, non-renewing or conditionally renewing some policies. The regulations also required insurers and premium finance companies to make accommodations for households and small businesses having trouble paying their premiums because of the pandemic.
The expiration of the emergency regulations is tied to the expiration of the executive order. An order issued on April 7 extended the expiration date to May 7. The new order further extends that date to June 6.
The regulations apply to property-casualty and life insurance policies issued to individuals and businesses with 100 or fewer employees and in effect on March 30. They apply to policies issued by admitted insurers and to personal lines policies and commercial lines policies that provide fire insurance issued by non-admitted insurers.
More information is available from the Coronavirus Resource Page on this website.
The New York Compensation Insurance Rating Board (NYCIRB) today announced that employers who are paying employees sidelined by the COVID-19 pandemic will pay a less-expensive rate for Workers' Compensation insurance. Big I New York had asked the NYCIRB to make this change.
Many employers have taken advantage of the federal Paycheck Protection Program, which provides them with short term loans to cover payroll for two months during stay-at-home orders. Other employers are simply paying employees even though they are prohibited from operating.
Workers' Compensation rating rules require premiums to be calculated based on the amount of the employer's payroll. While idled employees are still on the payroll, they have no exposure to being injured on the job. This results in an employer paying insurance premiums for a non-existent risk.
The NYCIRB announced that it has filed and received approval from the New York State Department of Financial Services for a new classification - code 8873, Telecommuter Reassigned Employees. According to the announcement, this classification applies:
"... to the payroll of employees who, during New York’s stay-at-home order related to the COVID-19 pandemic (and future stay-at-home orders), are reassigned to either (a) not perform any work duties (idle), or (b) perform clerical work duties at home. The loss cost rate for Classification 8873 will mirror the rate for Classification 8810 (clerical office employees). Further, this provision is applicable at the start of New York’s stay-at-home order and for up to 30 days after its conclusion."
The rule change applies to all new and renewal policies effective May 1, 2020, as well as to all in-force policies as of March 16, 2020.
Big I New York's Tim Dodge exchanged emails with the president of the NYCIRB in mid-April on this issue. The board assured us at that time that a change was forthcoming.
We suggest that you contact all clients for whom you obtain Workers' Comp insurance so they can instruct you as to how much of their payroll should be assigned to this new classification.
Despite the current moratorium on property-casualty insurers terminating policies, all policies issued by insolvent carrier Maidstone Insurance Co. cancelled on April 13.
New York State Supreme Court in Nassau County ordered on February 13 that Maidstone be liquidated due to its inability to meet its obligations to pay claims. The New York State Department of Financial Services was appointed as the liquidator. The order also required all Maidstone policies to be cancelled effective April 13.
Big I New York contacted the DFS recently to ask whether the department would petition the court to delay the effective date of cancellation, given the current moratorium. The department responded last night that, "No policyholder came forward with a claim of financial hardship." Consequently, the cancellations took effect as scheduled.
If you had clients insured with Maidstone, you should discuss alternative coverage arrangements with them, if you have not already done so.
The issue of the applicability of business interruption coverage has become one of the most hotly discussed insurance issues related to the COVID-19 pandemic. It is well-established that for virtually every commercial business interruption policy, there is no coverage for losses related to COVID-19. In response, both Congress and the New York State Legislature are currently considering legislation that would retroactively require insurers to cover losses related to COVID-19. We believe these proposals are misguided and would have catastrophic consequences.
On the Federal level, Rep. Brian Fitzpatrick (R, Pennsylvania) has sponsored the “Never Again Small Business Protection Act" that would require every commercial property-casualty policy which includes business interruption coverage to provide coverage for losses stemming from the closure of a business for practically any reason, which would include losses associated with a virus or pandemic. Recently, President Trump called on insurers to pay virus related claims if they are not excluded.
In New York State, Assemblyman Robert Carroll (D, Brooklyn) and Senator Andrew Gounardes (D, Brooklyn) have sponsored legislation to require COVID-19 related losses to be covered retroactively by business interruption insurance.
Why a Retroactive Coverage Mandate is Unwise - and Ineffective:
- First and foremost, pandemics are by nature uninsurable, and the losses associated with a pandemic are beyond what the existing insurance mechanism can afford to cover. Insurance policies contain exclusions for losses caused by events like war, nuclear and radiation accidents, and pandemics because the potential losses are so extreme and widespread that providing such coverage would threaten insurer solvency and force companies to charge premiums that would be cost-prohibitive.
- The magnitude of these losses is enormous and will threaten the financial health of many insurers, quickly send some domestic companies into insolvency, and destabilize an otherwise healthy economic sector. The insurance industry will be needed to support economic activity and help fuel our economic rebound when the restrictions are lifted, but it will not be positioned to do so if measures like this are enacted into law.
- Such proposals would require insurers to utilize the premiums collected for other specified risks and set aside to pay claims, and the outlays this would mandate will almost certainly exceed the amount of premium collected for all commercial property insurance.
- Legislatively rewriting existing insurance contracts by somehow nullifying the virus exclusion or the physical damage requirement would blatantly run afoul of the constitutional prohibition against the government impairing private contracts.
- Proposals that attempt to revise insurance contracts and compel insurers to pay for losses that were clearly excluded are misleading and offer false hope to businesses that are struggling through the crisis. Indeed, only 30% of small businesses have business interruption coverage. This proposal offers the majority of small businesses no relief.
- The insurance industry is working closely with the business community on a proposal that would enable those in need to receive compensation from the federal government. The federal fund that has been proposed would be open to all businesses adversely affected by the pandemic and not simply the small minority that bought business interruption coverage that excluded such risks.
Big I NY Has Your Back:
IIABA has joined a coalition of insurance trade associations in calling on congress to reject retroactive coverage mandates. Big I New York is working closely with our national Government Relations team to urge the state's congressional delegation to reject this misguided proposal.
On the state level, we are similarly opposing retroactive coverage legislation mandates. Keep an eye on your inbox for ways to contact your local legislators. We continue to advocate for a solution that will provide real, meaningful relief for our small business customers.
A new “frequently asked questions” (FAQ) page on the New York State Department of Financial Services website clarified the current moratorium on terminating and changing insurance policies.
- IF the terms of the policy permit the carrier to cancel, non-renew or conditionally renew it on a specific date;
- AND the policyholder can demonstrate financial hardship because of the pandemic;
- THEN the 60-day moratorium begins on that date.
For example, suppose the insurer sent a non-renewal notice on February 1. The policy will expire April 16. The policyholder demonstrates financial hardship. The insurer must delay the non-renewal until June 15. It may terminate coverage at that time.
The FAQs also clarified that:
- The requirements apply to policies that were in effect on March 30, 2020
- The requirements expire when the governor's executive order does on April 28. Big I New York has asked the department to confirm that the governor's extension of NY PAUSE did not change the regulation's expiration date.
For example, an insurer may non-renew a policy that is scheduled to expire on May 1.
Check www.biginy.org/coronavirus for further updates on the pandemic.