California Commissioner Asks Insurers for Policyholder Relief During Shutdown

California Insurance Commissioner Ricardo Lara issued a formal notice asking insurance companies to implement protective measures, including a moratorium on cancellations, for policyholders who may be impacted by the federal government shutdown.

According to the California Department of Insurance, the notice applies to roughly 160,000 civilian workers who could face cancellation or non-renewal of home, health, or other lines of insurance if they are unable to pay premiums on time since the shutdown began on October 1.

Lara’s notice extends to small businesses and others affected by interrupted federal contracts and grants.

“The federal government shutdown has serious consequences for Californians who are already struggling to find coverage and affordable options,” Lara said in a statement. “It is crucial for us at the state level to take every possible measure to protect our civil servants and those who rely on federal funds during this leadership crisis and neglect of duty.”

Lara’s notice requests that insurers provide the following measures for affected policyholders:

Grace periods: Postponing or withdrawing any previous notice of cancellation or non-renewal issued after October 1 due to non-payment of premiums. The notice requests that insurance companies maintain coverage in cases of unpaid premium for at least 30 days or for the duration of the federal shutdown.

Waiver of late fees and penalties: Eliminating late fees and penalties associated with late payments.

Extension of claims and underwriting deadlines: This includes extending deadlines for submitting proof of loss or other claim forms, conducting examinations under oath, medical examinations, physical inspections of insured property and meeting required repairs to comply with underwriting guidelines.

Topics California Carriers