Louisiana Insurance Commissioner Jim Donelon in late March issued Emergency Rule 40, which places a moratorium on insurance policy cancellations and non-renewals for policyholders in Louisiana.
The emergency rule is a result of the statewide public health emergency declared by Gov. John Bel Edwards in Louisiana as a due to the imminent threat posed to Louisiana citizens by COVID-19.
“The ongoing impact of the stay at home order has touched households and businesses throughout Louisiana and this order provides Louisiana policyholders a moratorium on policy cancellations and non-renewal by their insurers,” Donelon in a prepared statement. “However, I do want to stress that nothing in this order absolves consumers or businesses of their ultimate responsibility for payment of premiums.”
Emergency Rule 40 in Summary
Defines the insurance carriers and the kinds of insurance coverage governed by this order as well as the Louisiana policyholders entitled to the benefits and protections of this rule.
Suspends cancellation, non-renewal and non-reinstatement by insurers, or premium finance companies acting on behalf of insurers retroactively to the start of this emergency period. Additionally, this rule clarifies that no policy can be canceled or non-renewed because of a claim that is filed during this emergency.
Policies may continue to be canceled for fraud and material misrepresentation or upon written request by the consumer.
Insureds remain obligated to pay all premiums. Any property/casualty claim during this period are subject to a premium offset prior to payment. Health/accident claims related to a delinquent policy may be pended during the moratorium and will be paid in accordance with procedures established therein.
Emergency Rule 40 does not apply to new policies issued after the effective date of the rule.
Source: Louisiana Department of Insurance
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