We are now in our sixth month of the COVID-19 Era, with little hope for an early end. Social distancing and masks will continue to be parts of our lives for now. The changes that seemed shocking to insurance agencies in March have now become Just The Way Things Are.
But people are still buying homes (there were almost 22,000 closed and pending sales in New York in June,) cars (auto sales were at an annual pace of 14.5 million units in July,) and businesses are hiring back some workers, though not as quickly as they shed them in the spring. Commerce is continuing as much as it can during a time when so many normal activities are unsafe. Is your agency taking advantage?
The New York State government designated insurance as an essential business last March. That means agencies weren’t required to have all employees offsite like others. Many agencies never sent their staffs off to work from home. Regardless of where your employees worked from (home or office), they continued to serve their customers, answer their questions, work out their new premium payment schedules, reduce their estimated auditable exposures, and help them through the anxiety. The reality is most agencies seamlessly continued providing trusted guidance and care to their customers.
Many types of businesses were closed, but insurance agencies were there. Insurance agencies are still there. And you are a local business. Are you broadcasting that to the world? You should remind your communities that you have always and will always be there. Now is the time to dust off your promotions, invest in your brand, spruce up your expertise, and experiment with scheduling.
Here are three things your agency can get started on right now to position itself for success as the country muddles through this crisis and crawls toward the finish line.
1. Revisit the COVID messages on your phone system and website.
Do those messages still say something like, “Due to the COVID-19 pandemic, our office hours are reduced to …” If that is still true, why? Can you ramp operations back up? If it’s not, get those messages off of there. You want to project reliability.
Sure, in April when literally everything was in flux and you were being ordered to send notices to all of your clients, those messages were a good idea, maybe even a necessary one. But now it’s August. We’re not shell-shocked anymore, the notice requirement is happily well back in the rearview mirror, and we can operate a bit more normally, even if most or all of your staff is still working from their kitchens. So jettison any messages implying that you aren’t.
2. Your customers need flexibility just as much as your staff does.
While a lot of people were idled or working remotely early in the crisis (and many still are,) some people and businesses are busier than they’ve ever been. They have insurance needs that they don’t have two seconds to think about until the dinner hour or later. Too bad your office closes at five. But does it have to?
A lot of you have employees who need flexible schedules so that they can perform their newly-discovered jobs of home school teaching, daycare providing or adult caregiving. What if Jane, who is teaching math and spelling in the morning to her eight and ten year-olds, is able (and possibly desperate) to converse with adults about business between noon and 8:00 pm while her significant other assumes the tasks of instruction and peacemaking? Now your agency can serve customers well into the evening, which is when a lot of them need it. You get to take care of customers when your competitors aren’t, making them happy, and you help solve a valued employee’s problems, making him or her happy. Oh, and you make money. Think about it.
3. Invest in staff education.
The insurance business never stops changing, which means you and your staff should never stop learning.
Last August, had you ever heard of pandemic insurance? Did you know that some specialty carriers are writing active shooter insurance? Less exotic, how often is your agency selling Ordinance or Law Coverage with commercial property and homeowners insurance? What do you know about Mechanical Breakdown Coverage? If you had to explain Personal Injury Protection Coverage to a client whose child was just in a car accident, could you do it? Do you know what types of property National Flood Insurance Program policies cover and what they don’t? Expertise matters.
Every insurance shopper is looking for a lower price; that’s a given. But many (not all, but many) really are interested in protection, even if they don’t initially realize it. So build up your agency’s technical expertise. If you specialize in certain industry or market niches, learn more about those niches. If your business is changing, chances are they are, too. And COVID has likely impacted them differently than it did insurance. So commit to learning. It’s good for your customers, it’s good for your future E&O insurance premiums, and it’s good for your bottom line.
These are simple things to make your agency look good. More importantly, they are things to make your agency be good. So get started now. Be the business that your customers know they can rely on.
Today, the DFS adopted, on an emergency basis, the 60th amendment to Regulation 62. The amendment prohibits health insurers from charging copays, coinsurance, or deductibles for outpatient mental health services for essential workers, with the exception of high deductible plans. Health insurers are further required to notify outpatient mental health providers in their network that they may not collect any copay, coinsurance, or deductible from essential workers for such services.
The regulation is currently in effect until September 28th, 2020.
Read the amended regulation here
As of 12:01am on Tuesday, July 7th, emergency restrictions on insurance carriers' and premium finance agencies' ability to terminate coverage and requirements for premium flexibility are no longer in effect. The emergency regulation, first adopted on March 30th, and subsequently re-adopted with changes on June 29th, expired on July 6th, per Executive Order 202.48.
Relief granted to policyholders prior to July 6th remains in effect. For example, an insured who demonstrated hardship for a June 1 premium payment is still entitled to a 60-day deferral (until July 31), and the option to repay that premium in 12 monthly installments.
Contact Scott Hobson with questions.
More information is available from the Coronavirus Resource Page.
The New York State Department of Financial Services today announced that it was again extending the expiration of individual insurance agent and broker licenses. These licenses will now expire on August 7. The move grants producers an additional 30 days to renew their licenses. The requirement that a monitor be present to complete producer continuing education and pre-licensing course exams online also remains suspended.
Be aware that this extention applies to individual licenses only. It does not apply to licenses issued to business entities.
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. The department subsequently extended the deadline to July 8. Today's announcement pushes that expiration date back to August 7. For example, a license scheduled to expire on July 2 will now expire on August 7.
Visit the Big I NY Education Calendar to find webinars that you can take to meet the continuing education credit requirements.
The new emergency regulation issued by the New York State Department of Financial Services on Sunday limits the number of times that a policyholder can benefit from the moratorium on policy terminations and changes and the relaxed premium payment rules. The rule makes it clear that policyholders suffering financial hardship because of the COVID-19 pandemic may benefit from these provisions only once.
The regulation, labeled Regulation 216, replaced a version of the same regulation that was issued on March 30 for three months. Like its predecessor, it imposes a 60-day moratorium on insurers' ability to cancel, non-renew or conditionally renew policies issued to individuals and small businesses suffering hardship because of the pandemic. Insurers must permit policyholders who miss payments to make up the overdue amounts over a 12-month period. They may not cancel these policies for non-payment, nor can they charge late fees or report the policyholders to credit reporting agencies.
The new version contains provisions that were not in the original. Section 229.5 now includes this:
(c) Nothing herein shall entitle a policyholder who demonstrated a financial hardship as a result of the COVID-19 pandemic and either received a moratorium for a specific policy or obtained relief for an amount due under the prior regulation, to obtain under the Executive Order and this Part an additional moratorium for a
specific policy or further relief for an amount that comes due while this Part is in effect.
A similar provision has been added to the regulation governing premium finance companies:
(d) Nothing herein shall entitle an insured who demonstrated a financial hardship as a result of the COVID19 pandemic and already obtained relief for an amount due under the prior regulation, to obtain under the Executive Order and this section further relief for an amount that comes due while this section is in effect.
The effect is that once an insurer has granted a moratorium to a policyholder and/or worked out a payment arrangement for overdue premiums, they are not obligated to do so a second time. Similarly, premium finance companies, who must extend grace periods for missed payments, are obligated to do so only once.
The regulation is scheduled to expire on July 6.
Yesterday, the NYS Department of Financial Services (DFS) issued a new emergency regulation, which is a slightly revised version of the March 30th emergency insurance regulation imposing a moratorium on policy cancellations and proving a 12-month grace period for repayment. The previous emergency regulation expired on June 28th, and the replacement emergency regulation is in effect until the expiration of Executive Order 202.13, currently July 6th.
The new emergency regulation is substantially the same as the original emergency regulation. Importantly, however, the new regulation does not include the requirement that producers notify customers of the regulation's provisions. Big I NY had urged the DFS to eliminate this requirement, as it would be duplicative, significantly burdensome to agencies, and of little to no value to customers. We applaud the DFS for making this common-sense change.
Contact Scott Hobson with questions.
Big I NY has asked the Department of Financial Services for two amendments to the current emergency insurance regulation, which imposes a moratorium on cancellations and non-renewals, and grants a 12-month grace period for repayment of premiums, for policyholders suffering hardship due to COVID-19.
We expect the emergency regulation will be amended or re-issued prior to its expiration on June 28th, since the governor has ordered that the cancellation moratorium and grace period provisions remain in effect until July 6th (a detailed discussion of the reason for the two different dates follows).
We have asked the DFS to:
- Remove the requirement that producers notify customers of the provisions of the regulation, or at a minimum, codify that (consistent with the Department's prior guidance):
- Producers do not need to duplicate notice already sent
- Email delivery is acceptable
- Prior consent from the customer is not required
- Clarify the premium finance regulation to state that the obligation to offer alternative payment arrangements applies separately to each missed installment payment.
These common-sense changes will make it less burdensome for agents and brokers to comply with the regulation, and provide customers with financed policies greater clarity about the protections they are afforded.
Why the two different dates? It comes down to the relationship between executive order and an emergency regulation. To reiterate, the cancellation moratorium and grace period provisions are currently in effect until July 6th.
On March 29th, Governor Cuomo issued Executive Order 202.13, which among other things, directed the DFS to adopt an emergency regulation to impose a moratorium on policy cancellations and non-renewals, and provide a 12 month grace period for repayment of premiums.
On March, 30th, the DFS adopted the required emergency regulation, which remains in effect as long as dictated by the Governor's Executive Order and subsequent extensions. However, as a matter of law, emergency regulations are only effective for 90 days, after which they must be renewed (for 60 days at a time) or expire.
Currently, the Governor's executive order dictates that the cancellation moratorium and repayment grace period are in effect until July 6th. However, the emergency regulation expires on June 28th. Thus, the DFS must either extend the order (60 days), or issue a new emergency regulation which complies with the governor's directive in E.O. 202.13 (90 days).
The New York State Department of Financial Services has confirmed to Big I New York that the moratorium on premium finance companies (PFCs) cancelling policies applies separately to each installment payment. Each installment is also eligible for alternative payment arrangements.
An emergency regulation issued by the DFS in late March, on orders from the governor, requires PFCs to delaty cancelling policies when a policyholder misses an installment payment because of financial hardship resulting from the COVID-19 pandemic. It also requires them to permit these policyholders to make up the missed payment over a twelve-month period. Big I New York members have reported that PFCs have interpreted the regulation in different ways, with some saying that a policyholder is entitled to one premium deferment only.
Last week, Big I New York asked the DFS for clarification. We received the following response:
For a property/casualty insurance policy, any payment due while the emergency regulation is in effect is eligible for a single 60-day moratorium (i.e., once the moratorium applicable to any one payment expires, the policyholder is not entitled to a second moratorium for that same payment), provided that COVID-19-related financial hardship is demonstrated at the time of the payment due date, and subject to the safety and soundness of the premium finance agency. For the avoidance of doubt, individual (and periodic) payments due on a policy or premium finance contract are considered individual payments that qualify for independent moratoriums. The emergency regulation applies to finance agreements for covered property/casualty insurance policies in effect on or after March 30, 2020.
This implies that a policyholder who can demonstrate financial hardship because of the pandemic may request cancellation deferrals and alternative payment arrangements for multiple installments - one for May 1, one for June 1, another for July 1, and so on. This will continue until the emergency regulation expires and is not re-issued. The regulation is currently slated to expire on June 27, 2020; the executive order that mandated it has been extended to expire on July 6.
Big I New York members and their clients who have financed their premiums should keep in mind:
- The regulation requires a PFC to delay cancellation, but it does not stop the PFC from eventually cancelling a policy. If the insured misses an installment due July 1, the PFC may cancel the policy on August 31 or later.
- The regulation is temporary. At some point, PFCs will have the right to cancel policies as stated in the finance agreement, rather than having to delay and make alternate arrangements.
- The policyholder's obligation to pay overdue installments is separate from the issue of cancelling the policy. If the PFC cancels a policy at the end of the deferral period or after the regulation expires, the policyholder will still owe the past-due amounts, and the PFC will have the legal right to collect those amounts, even though the policy has been cancelled.
- The regulation's requirements are "subject to the safety and soundness of the premium finance agency." If a PFC can show to the DFS that its solvency would be jeopardize by making these allowances, the PFC may be excused from having to make them.
More information is available from the Coronavirus Resource Page on this website.
The emergency restrictions on insurance carriers' ability to terminate coverage and requirements for premium flexibility will stay in place until at least July 6, according to a new executive order. New York Gov. Andrew M. Cuomo issued the order on Saturday.
Since March 30, insurers writing business in New York have been required to give an additional 60 days of coverage (90 days for life insurance) to any policyholder who can demonstrate financial hardship because of the COVID-19 pandemic and whose policy the insurer could legally cancel, non-renew or conditionally renew. They have also been required to offer policyholders who missed payments and can demonstrate financial hardship because of the pandemic the option of making up the missed payments over 12 months. They are further prohibited from charging late fees or reporting these delinquent payers to credit reporting agencies.
The order was originally to have expired on April 28 but has been extended several times. The latest order extends it by an additional 30 days. Further extensions are possible as the state's businesses gradually resume operations following the lengthy shutdown implemented when infection rates began to soar in March.
During the coronavirus pandemic, we've seen Big I NY members making donations, collecting food for food banks, pantries and other charities.
If you are looking for virtual opportunites to volunteer, the Insurance Industry Charitable Foundation (IICF) has a list of ways to serve your community remotely from making PPE masks to sending cards to the sick and elderly and more.
The national Big I Young Agents committee is hosting the third annual GIVE Movement now through June 8th. It is an easy way to show how independent agents are supporting their communities.
We encourage you to take photos or videos of the good works you are doing and share your story online via #TCAgentsGIVE and #insurancegivesback.
On behalf of all of us at Big I NY, thank you for the ways you help those who are less fortunate.