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.