North Carolina Creates Process for Insurers to Legally Offer Pandemic Premium Relief

April 15, 2020

The North Carolina Department of Insurance says it is working with insurers to allow them to offer financial relief to policyholders without filing for department approval or risking violating state law during the current coronavirus pandemic.

Many automobile insurers are announcing rebates and discounts due to the “Stay at Home” order, but, by law, rebates are not allowed in North Carolina and discounts must be filed in advance with the Department for approval, NCDOI said in a statement.

In response, the department has developed a filing mechanism that will quickly allow companies to legally offer discounts to help their policyholders.

Specific guidelines from NCDOI to insurers include:

Option 1: If the insurance company plans to offer the consumer benefit as a policyholder dividend, savings, or unabsorbed premium deposit as allowed by applicable law, then no product filing is required with NCDOI’s Property and Casualty Division.

Option 2: If Option 1 is not selected, then insurance companies who plan to offer a COVID-19 policyholder benefit may submit as an Optional Enhancement Form filing under the applicable law. This applies whether the insurer plans to offer the benefit to its auto or residential property policyholders.

Option 3: If Option 1 and Option 2 are not selected, the companies may file as a rate deviation under applicable law. Filing instructions for Option 2 and Option 3 are located on the Property and Casualty section of the NCDOI’s website under Enhancement Filing or Deviation Filing instructions.

NCDOI said any language that refers to the policyholder benefit as a “payback”, “giveback,” “refund,” “return of premium” or “any other nomenclature that hints of a rebate as defined under law will not be accepted.”

“This plan provides companies with an expedited way to bring economic relief to our residents,” said North Carolina Insurance Commissioner Mike Causey. “I cannot ignore our laws that do not allow monies to be given to policyholders that are not tied to a decrease or cancellation of coverage. I can, however, assist companies in offering legal discounts.”

Insurers who would like to offer an assistance plan to consumers during the COVID-19 emergency must contact the N.C. Department of Insurance Property and Casualty Division at 1-855-408-1212.

Policyholders should contact their insurance carriers to see if their company is offering a financial assistance plan.

All of the major auto insurers have committed to providing premium relief to policyholders dealing with the current coronavirus crisis. According to the Insurance Information Institute, the top national auto insurance companies and other auto insurers have announced refunds, discounts, dividends and credits totaling $8.1 billion.

III estimates that this total will reach $10.5 billion as more auto insurers announce their offers.

Source: North Carolina Department of Insurance

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