Southeast Insurance Regulators Issue Industry Guidance for Coronavirus Outbreak

Insurance departments across the Southeast are notifying industry representatives of updated procedures and expectations in response to the coronavirus outbreak, while also acknowledging the potential for a serious impact on state insurance operations, agents and policyholders.

In some cases, regulators are also working to ease regulatory and compliance burdens so companies can be more effective at helping their customers during this time, including extending the deadline for agents to complete their continuing education (CE) requirements and granting extensions for data calls.

Regulators in Florida and West Virginia have also called on insurers to prepare business continuity plans, and the West Virginia Commissioner of Insurance has issued an insurance emergency declaration.

Operations at Southeast insurance departments looks different as well, with many now working remotely, including Alabama, South Carolina, Tennessee and West Virginia.

Raymond Farmer, the South Carolina Director of Insurance and president of the National Association of Insurance Commissioners (NAIC), said state insurance departments across the Southeast and the country are coordinating together to make sure they have the best response efforts in place as the coronavirus strain known as COVID-19 spreads throughout the country.

“The beauty of the NAIC and its membership is if one state has an issue, we know each other well enough to pick up the phone and call the other,” Farmer told Insurance Journal. “Over the last few days, I bet I’ve talked to 10 different states about what they’re doing, what we’re doing. I’ve had states in the area call us … if I have an issue that comes up that somebody else may have a better idea than I do, I’m using it.”

Farmer said all state insurance commissioners will discuss emerging issues related to the coronavirus outbreak at a Friday NAIC meeting, as well as how they can all coordinate better and be as uniform as possible on coronavirus data. It will be the first of many calls on the effects of COVID-19 on the insurance industry, he noted.

“Our job is to serve the policyholders, but also to make sure we have solid companies,” he said. “We’ll be discussing all of that and the companies will not hesitate to let us know what their issues are as well … this is just the beginning of this discussion.”

The following is a wrap-up of actions insurance departments across the Southeast have taken over the last several days as the coronavirus situation and state response efforts have intensified.

Florida

The Florida Office of Insurance Regulation (OIR) issued a memorandum earlier this week directing all insurers to review and update their business continuity and/or continuity of operations plans. It also asked insurers to immediately notify OIR should they have to activate their business continuity and/or continuity operation plan in response to COVID-19.

OIR issued the memorandum to all insurers in the state and other entities it regulates and noted that the Centers for Disease Control and Prevention (CDC) and the Florida Department of Health (DOH) have issued guidance on how businesses can help prevent the spread of the virus by limiting public exposures, and said companies are “urged to heed this guidance.”

The memorandum applies to all insurance companies regulated by OIR. That does not include insurance agencies or brokers, which are regulated by the Florida Department of Financial Services.

“Understanding these measures may disrupt normal business operations, all companies regulated by OIR are directed to review and update their Business Continuity Plans and/or Continuity of Operation Plans immediately,” OIR said in the memorandum.

DFS posted a message on its agency website that due to the response to COVID-19, agent examination testing locations are closed until April 16, or whenever conditions are deemed safe to re-open. It noted that fingerprinting locations throughout the state are closing and agent applications that require fingerprint and/or state examination results cannot be completely processed.

“In order to continue operating efficiently, we strongly encourage people to utilize our Upload Documents feature through their MyProfile account to submit any application deficiency documents, instead of emailing them to us,” the site says.

Georgia

The Georgia Department of Insurance is expediting the insurer review process for two business interruption endorsements recently unveiled by ISO related to the coronavirus situation.

GAODI said it recently became aware of the new forms that would provide coverage for actual loss of business income and extra expenses caused by a government order closing the insured’s premises or quarantining all or part of the premises and from government suspension of some modes of public transportation. The forms were not filed by ISO with GADOI so each insurer will need to file individually to adopt them and the department will expedite the review processes for these coverages.

“The department intends to remove any barriers to insurers offering coverages that may protect Georgia businesses during this unprecedented public health crisis,” the bulletin from Commissioner John F. King reads.

GADOI said Wednesday it had not yet received any filings from insurers to uses these endorsements as of yet.

The department has also advised agents that in-person continuing education requirements are waived through April 30, 2020. Agents seeking licensed renewal should apply for renewal, even if their CE requirements are not yet met. The CE requirements may be waived past April 30, depending on the lengthy and severity of the coronavirus outbreak, GADOI said.

Update 3/20: King issued a bulletin March 20 directing all P&C insurers to refrain from canceling any commercial policies, including business interruption or business income coverage, for the cause of non-payment for the next 60 days. That prohibition could be extended should the pandemic last longer than expected.

In addition, the commissioner has suspended activities and functions that require in-person interaction, including all onsite exams, audits, and licensing requirements until conditions improves and he deems “it safe to return to normal practices.”

Accommodations are also being made for certain insurer filing requirements and attendant deadlines. All non-federal filing deadlines are temporarily suspended and all applicable late filing fees are waived until the commissioner determines business operations may return to normal. The suspension is not applicable to product filings.

GADOI will offer immediate and expedited review for products that are critical due to the COVID-19 outbreak or its effects.

Insurance applicants who have not yet taken their licensing test will be unable to do so as testing centers have been close until it is safe to re-open. The commissioner directed applicants who haven’t taken their tests to compile all necessary documentation for a license and submit it to the department, which will process applications after testing centers reopen.

Kentucky

In order to respond to the emergency and to protect and safeguard the public health, safety, and welfare of the citizens of the Commonwealth of Kentucky, the Kentucky Department of Insurance has adjusted certain insurance-related rules and regulations on a temporary and short-term basis, it said on its website

Among those is the suspension of insurance examinations at all Kentucky locations until further notice.

“This directive is given for the purposes of maintaining social distancing under the CDC guidelines and to promote the health and well-being of the general public,” the department said.

It plans to increase testing hours to accommodate needs once in-person governmental services are allowed to resume. Insurance applicants whose testing window expires during this closure must contact the office’s Division of Agent Licensing if an extension is needed.

The department has also extended the time requirements for completion and submission of continuing education hours for March and April licensees. Those who are due by March 31, 2020 now have until May 31, 2020, and those licensees who normally would be required to complete all continuing education hours by April 30, 2020 will now have until June 30, 2020 to complete the hours. The reporting period of the completion of the continuing hours to the department is also extended.

This action only extends CE deadlines and does not extend license renewal deadlines. License renewal is completed electronically, and currently has a 60-day grace period.

North Carolina

The North Carolina Department of Insurance Agent Services Division said it “will continue to monitor the COVID-19 situation and take appropriate changes as necessary.”

North Carolina Insurance Commissioner Mike Causey is looking at ways to address licensing and continuing education issues as they arise, NCDOI said in a statement.

In regards to licensing, NCDOI said there will be delays in issuing new licenses requiring fingerprints since many sheriff’s offices are suspending fingerprinting services temporarily. Agent Services cannot waive this statutory requirement for fingerprinting new applicants. In addition, Pearson VUE testing centers will be closed so candidates requiring exams for new licenses or lines of authority will be unable to test.

All North Carolina licensed insurance producers and adjusters whose CE compliance period expires in March, April or May 2020 will be granted an extension through June 30, 2020 in order to meet the state mandated CE requirements. This includes North Carolina nonresident adjusters with North Carolina as the Designated Home State (DHS).

All insurance CE courses previously approved for classroom delivery by licensed CE providers can be offered via webinar without requiring the insurance CE provider to refile the courses for a different presentation method with Prometric. The insurance CE provider should assume the full responsibility to monitor attendance, NCDOI said.

South Carolina

South Carolina Director of Insurance Ray Farmer said under the state of emergency declared by South Carolina Governor Henry McMaster, he has the authority to call for companies to offer a premium grace period, such as what the California Insurance Commissioner has done, but he doesn’t think there is a need to do so, yet.

“I would hope our companies would be lenient with each of their customers … in these stressful times. If I see the need of issuing an emergency order on that or any other thing, I certainly will do that. But I’m not going to do that unnecessarily,” he said.

Farmer said SCDOI is also available to help agents and brokers that are licensed in the state in “any way possible,” and has extended the deadline for CE requirements to be completed.

“They need to know that whatever they need from us, we’re here to give it. And if there are issues between agents and companies and agents and consumers … everybody’s going to take a commonsense approach on trying to solve that issue,” he said.

In addition, the fourth and final report due date for the SCDOI Hurricane Dorian data call has been extended to May 15, 2020 for claims reported as of April 1, 2020. In the event a company has no claims to report and does not anticipate any claims to be reported, only one report is required indicating that there are no claims.

The submission deadline for the department’s Wind Pool data call, an ongoing data call that collects information to monitor the state of the property insurance market in the Wind Pool territory, has been extended to May 15, 2020.

West Virginia

On March 16, West Virginia Insurance Commissioner James Dodrill declared an insurance emergency and ordered insurers, producers, and all other insurance-related entities in the state to “consider the difficulties experience, and to be experienced, by both private citizens and businesses as a result of the current State of Emergency …”

The order specifically relates to the collection of premiums, cancellations, nonrenewals, claim or other documentation, rating or rates changed, and other requirements or policy provisions that could include premium payments, options service fees or other health insurance-related requirements.

The order also states workers’ compensation insurers should consider the impact on rates of “any idling of workers by employer insureds, and insurers shall, if requested by the employer insured, conduct an audit in order to determine whether the insured is entitled to any adjustment in premium due to the idling, furloughing, laying off or other dismissal of workers.”

Insurers and other regulated entities must not issue a cancellation notice or nonrenewal notice pertaining to any insurance policy, plan or contract if related to circumstances from the COVID-19 pandemic.

“Insurers and other regulated entities should be flexible with respect to allowing alternative payment arrangements for the satisfaction of premiums that are due or that which may become delinquent as a result of the emergency,” the order states.

The West Virginia Offices of the Insurance Commissioner (WVOIC) also requested that insurers have in place and submit continuity of operations and preparedness plans to address any operational risks, and that insurers are “identifying, monitoring, and managing the financial risk posed by the COVID-19 crisis.”

“It is critical that insurers establish plans to address how they will assess and manage disruptions and other risks to their services and operations,” the March 13 bulletin states.

The bulletin said every foreign insurer currently issuing policies in this state was required to submit a response describing its plans of preparedness to manage the risk of disruption to operations and the financial risk arising from COVID-19. Domestic insurers were to receive separate guidance specifically targeted to them.

On March 17, WVOIC said the temporary closing of testing centers and fingerprint vendors has produced a backlog of producer licensing that continues to grow.

“We are evaluating options to try to alleviate this issue and will provide more guidance as soon as possible,” Dodrill wrote in a message.