Protection for Insurance Policyholders

Premium payments suspended while under COVID-19 financial stress –By Executive Order

We hope that this message finds you and your family safe and healthy during these difficult times.

The New York and Connecticut State Legislatures have been implementing emergency measures in an effort to protect insurance policyholders who have been hit with financial hardship because of the COVID-19 pandemic.

These are not waiver of payment or forgiveness programs. Policyholders will still be required to pay the premium at a later date.

Policyholders are encouraged to make direct contact with their insurance carrier to make specific payment arrangements.

State of Connecticut

As part of Executive Order No. 7S, no insurer may lapse, terminate or otherwise cancel a covered insurance policy due to nonpayment of premium from April 1, 2020, through Monday June 1, 2020.

The grace period applies to:

  • All entities licensed or regulated by the Connecticut Insurance Department—including admitted and non-admitted companies.
  • Policyholders unable to pay the interest or indebtedness on a premium.
  • Any insurance coverage in Connecticut, including life, health, auto, property and casualty.

Insurers must provide a 60-day grace period to insureds with individual insurance policies who have been:

  • laid off,
  • furloughed,
  • or fired from employment due to the COVID-19 pandemic.
  • This extends to individuals who have sustained a significant loss in revenue.

The insurer may require individuals to provide affidavits or other statements asserting that they need the grace period due to lost income because of the COVID-19 pandemic.

Insurers must provide a 60-day grace period to businesses that are group policyholders; have group insurance; and/or have property/casualty insurance:

  • that were required to close,
  • to significantly reduce operations,
  • or suffered significant revenue loss because of the COVID-19 pandemic.

The insurer may require businesses to provide affidavits or other statements confirming that they were required to close or significantly reduce their business operations or suffered a significant revenue loss due to the COVID-19 pandemic.

The grace period is not automatic. Policyholders must provide information regarding their COVID-19-related loss in revenue or income to insurers. Insurance carriers will be required to provide instructions on how policyholders should provide such information. The grace period only applies to cancellations or non-renewals due to the failure to pay premiums during the 60-day grace period; cancellations or non-renewals pursuant for other legally recognized reasons still permitted.

State of New York

Regulations they enacted include: the waiver of late fees; the prohibition on reporting negative data to credit reporting agencies; and the repayment of late premiums over a 12-month period.

Carriers that already have provided a policyholder with a 60-day grace period for March 2020 and April 2020 premiums will be deemed to have satisfied these requirements.

If you have been impacted by this pandemic, this means help may be available.

  • If you can demonstrate that you’re unable to make a timely premium payment due to financial hardship because of the COVID-19 pandemic, you may pay such premium over a 12-month period. 
  • If your policy is financed through a premium finance agency, they must provide a grace period before canceling your policy for the late payment of an installment if you can demonstrate financial hardship because of the COVID-19 pandemic.

This grace period will be 60 days for a property/casualty policy; 90 days for a life insurance policy.  You will be given a 12-month period to pay the missed installment, and the premium finance agency may not impose late fees or report you to any credit reporting agency or debt collector because of that installment.

You may prove hardship by submitting a written attestation to the insurance company or premium finance agency regarding your financial hardship resulting from the COVID-19 pandemic.  The full text of the relevant regulations can be read here: https://www.biginy.org/nysdfs.

If you have any questions about this or your policy, don’t hesitate to contact our team. We’re proud to continue helping you protect what matters most.

Be safe and well,

Principal