California Insurance Commissioner Ricardo Lara today issued a bulletin extending his previous order requiring insurance companies to return partial insurance premiums to consumers and businesses amid the ongoing COVID-19 pandemic.
The California Department of Insurance will review all premium adjustments to ensure they are fair and adequate and reflect policyholders’ reduced risk, according to Lara.
The bulletin now includes the month of May, having already included the months of March and April, covering at least six different insurance lines: private passenger automobile, commercial automobile, workers’ compensation, commercial multi-peril, commercial liability, medical malpractice, and any other insurance line where the risk of loss has fallen substantially as a result of the COVID-19 pandemic.
The bulletin requires insurance companies to provide an adjustment to the premium in the form of a premium credit, reduction, return of premium, or other appropriate adjustment as soon as possible, and no later than Aug. 11.
For most if not all consumers, this will be a percentage of the premium and the CDI plans to validate each insurance company’s plan.
“With the vast majority of Californians still under ‘stay at home’ orders, the risk of accident and loss remains low for many lines of insurance and their premiums should reflect that,” Lara said in a statement. “While I appreciate companies that have already taken action to return premiums, the Department of Insurance will be checking that the reductions are adequate and consumers and businesses are not shortchanged.”
On March 18, Lara issued a notice calling on all admitted and non-admitted insurance companies to provide their policyholders with a 60-day grace period to pay their premiums.
Lara today issued a second notice requesting insurance companies to work with their policyholders who may be struggling to allow them an additional 60-days, effectively extending the grace period until July 14. After July 14, 2020, insurers are encouraged to work with their individual policyholders who have been acutely impacted by COVID-19 and are still unable to timely pay their premiums.
Lara is also requesting that all insurance agents, brokers, and other licensees who accept premium payments on behalf of insurers take steps to ensure that customers have the ability to make prompt insurance payments, if and where possible. This includes alternate methods of payment, such as online payments, to eliminate the need for in-person payment methods in order to protect the health and safety of both workers and customers.
Was this article valuable?
Here are more articles you may enjoy.