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).
By Jim Lombardo
, CPCU, AAI, AIM, MBA, AVP of Learning & Development
As Mark Twain once said, “If it's your job to eat a frog, it's best to do it first thing in the morning. And if it's your job to eat two frogs, it's best to eat the biggest one first."
The frog is that one thing you have on your to-do list that you have absolutely no motivation to do and you're most likely to procrastinate on. Eating the frog means to just do it. Otherwise, the frog will eat you, and you'll end up procrastinating it the whole day.
Once that one task is done, the rest of the day will be an easier ride, and you will get both momentum and a sense of accomplishment at the beginning of your day.
I absolutely love this maxim. Let's look at a few assumptions it makes that are hard to disagree with:
- There are things you have no incentive to do
- You will put it off “until later"
- It may come back to ruin your day
- You will get a sense of accomplishment.
So, take a look at your “to do" list (I assume you have one?); find the frog, and eat it first thing tomorrow morning!!
Also, this announcement just came from The Institutes regarding exam proctoring:
“The Institutes are offering virtual exams until September 15, 2020. Move forward in your course by taking a virtual exam. You can safely complete your exam from any location with an internet connection, whenever you want, with no appointment needed."
By Jim Lombardo,
CPCU, AAI, AIM, MBA, AVP of Learning & Development
“We can't help everyone, but everyone can help someone." – Ronald Reagan
I rarely go through the drive through at my local coffee shop. I am either too cheap, running too late or just plain impatient. However, I decided to get a small coffee to go the other morning and was pleasantly surprised when I went up to the window to learn that someone had already paid for my coffee. I immediately thought to myself, “shoot I should have ordered a large!!“
Just kidding. I said to myself, “wow that was really nice!!"
I share this with you today because it reminded me of my favorite quote from my favorite President.
It takes very, very little effort to smile at someone, to say Hello or to hold a door open for someone.
I challenge you to do something nice for someone today!!
Here's something else you can do: take some CE!!
These are a few of the great classes we have coming up:
ABEN When Words Collide...Insurance Coverage and Claim Disputes
Flood Insurance - It's Coming Your Way!!
Insurance Issues for Today's World
A New York State law enacted last year prohibits businesses from making unsolicited telemarketing phone calls during a state of emergency. Consequently, insurance agents and brokers should avoid making these calls during the present COVID-19 state of emergency. Gov. Andrew M. Cuomo
declared a statewide state of emergency on March 7, 2020. It remains in effect until September 7, 2020.
The law passed both chambers of the New York State Legislature unanimously last June and was signed by Gov. Cuomo on December 18.
It amended the existing general business law pertaining to telemarketing.
The law prohibits a business or its employees (supervisors are responsible for employees’ acts) during a state of emergency, from, in order to induce an individual or business in New York to buy goods or services, making a phone call to them when they didn’t ask for the call or aren’t a current customer. This applies to a plan to sell goods and services that involves the business making more than one telephone call. However:
- It doesn’t apply to contacts made through other media; and
- It doesn’t apply to calls made to finish a transaction the individual or business already agreed to.
Big I New York encourages all agencies and brokerages to be aware of and follow these rules.
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.
By Jim Lombardo
, CPCU, AAI, AIM, MBA, AVP of Learning & Development
I think I am starting to see the "proverbial" light at the end of the tunnel. Or at least I hope so.
As New York State begins to “reopen," we will all try to get back to normal as soon as possible. The question is, though, what will be “normal?" I think many things will return to where they were pre-pandemic, but other things will simply be different. I feel education will be one of those things that will be altered going forward- and that can be good.
I firmly believe there still will be the traditional “live classes"- I am a fan of the networking, the flexibility of a good instructor and the piggy backing off of questions asked by others in the class. We plan to offer live classes as soon as we determine the safest way to do that.
However, I feel there will certainly be more online and virtual education. So my questions for you are:
- “How will you take advantage of these on line opportunities?“
- "Will you advocate for these?"
- “Will you encourage your staff to take webinars from their work desk?"
- “Will you be able to better budget and plan for your Continuing Education going forward?"
Please contact us here at Big I NY and we can work with you to better prepare.
I wanted to highlight our partnership with MyAgencyCampus
. They are solid partners with us and offer a great variety of programs. Check them out!
we will be having an “Agent Chat” on Friday morning June 19th with
six agents who will be discussing how their agency operations were affected by
COVID-19, what their reopening plan is, and how this has prepared them for the
Register for Agent Chat: Surviving the Shutdown & Reopening Right
Until next time, stay safe!
The NYS DMV has issued official guidance on the reopening of DMV offices.
As regions enter phase 3 of reopening, DMV will offer limited in-person transactions in state-run DMV offices by reservation only, prioritizing critical services, and will resume all other road tests at that time. Until then, there will be no in-person transactions in any DMV office and reservations will only become available as regions enter phase 3.
Individual county-run DMVs are advised to follow the state timeline, but this is a recommendation, not a mandate.
As of June 1, state-run DMV offices in the counties of Albany, Onondaga, Nassau, Suffolk, Westchester, and the five boroughs of New York City have begun processing registrations and other transactions by mail, and as of June 4, are accepting transactions through secure drop boxes located at each office.
DMV is currently accepting plate surrender via mail. The surrender date is the date the plates were postmarked.