Coronavirus (COVID-19) Information for Industry

Property/Casualty Emergency Regulation FAQs

What is the Department doing to provide relief to consumers who are facing financial hardship due to the COVID-19 pandemic with respect to property/casualty insurance policies?
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On March 30, 2020, the New York State Department of Financial Services adopted an Emergency Regulation to provide relief to New York consumers and small businesses experiencing financial hardship due to COVID-19. The Emergency Regulation prohibits New York State regulated issuers of property and casualty insurance from cancelling, non-renewing or conditionally renewing the policies of qualifying policyholders for a sixty (60) day moratorium period. Policyholders who demonstrate financial hardship due to COVID-19 may defer paying premiums during this period without penalty. The regulation also applies to premium finance agencies.

To which property/casualty policyholders does the Emergency Regulation apply?
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The Emergency Regulation applies to most individuals and small businesses who demonstrate financial hardship due to COVID-19.

  • If you are an individual, most personal lines property/casualty insurance policies are covered by the Emergency Regulation, including auto, homeowners’ and renters’ insurance.
  • If you are a small business, only certain types of commercial lines property/casualty insurance policies are covered by the Emergency Regulation, generally including property, fire, commercial general liability, special multiperil, medical malpractice, workers’ compensation, commercial auto (including livery and other for-hire vehicles), and commercial umbrella insurance.

For the purposes of the Emergency Regulation, a small business is any business that is resident in New York, is independently owned and operated, and employs 100 or fewer individuals. Please be aware that “residence” does not require a New York “domicile.”

The precise categories of policies are set forth in detail in the Emergency Regulation. If you are an individual or small business, can demonstrate financial hardship as a result of the COVID-19 pandemic, and are uncertain whether your policy is covered, please contact your insurer or broker.

Do the moratorium and Emergency Regulation apply to a commercial lines insurance policy issued by an excess line insurer?
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The moratorium and Emergency Regulation do not apply to a commercial lines insurance policy issued by an excess line insurer and will not affect any such policy’s cancellation provisions, except with respect to an excess line commercial fire insurance policy. Insurance Law § 3426, which sets forth cancellation and non-renewal requirements for commercial lines policies, specifically excludes excess line policies pursuant to subsection (l)(2). Insurance Law § 3404, however, sets forth cancellation requirements that apply to standard fire insurance policies, regardless of whether those policies were issued by an admitted or excess line insurer. See OGC Opinion No. 03-09-11 (Sept. 10, 2003). Thus, in a situation where a commercial lines insurance policy insures solely against the peril of fire, or against the peril of fire in combination with other kinds of insurance for an indivisible premium and where there is one cancellation provision applicable to the entire policy, the moratorium and Emergency Regulation apply to such policy in its entirety, even if it was issued on the excess lines market.

How does a policyholder demonstrate financial hardship due to COVID-19?
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For the purposes of the Emergency Regulation, policyholders may submit to their insurer or premium finance agency, as applicable, a statement that they swear or affirm in writing under penalty of perjury that they are experiencing financial hardship as a result of the COVID-19 pandemic. The statement is not required to be notarized.

When does the moratorium begin?
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The moratorium begins on the day on which, under the terms of an insurance policy, the insurer could have canceled, non-renewed, or conditionally renewed the policy for any reason. For a sixty (60) day period starting on that day, the moratorium protects the policyholder from cancellation, non-renewal, or conditional renewal by the insurer if the policyholder can demonstrate financial hardship due to COVID-19. During this period, the Emergency Regulation prohibits late fees and negative credit reports from unpaid premiums.

What happens after the moratorium expires?
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If a policy in effect on March 30, 2020 could have been terminated or conditionally renewed by the insurer for any reason, the moratorium extends the effective date of such termination or conditional renewal for sixty (60) days if the policyholder can demonstrate financial hardship due to COVID-19. In addition, the Emergency Regulation provides that, if a policyholder failed to make a timely premium payment due to financial hardship as a result of COVID-19, the insurer must give the policyholder the opportunity to repay such late premium in twelve (12) monthly installments if the policyholder can still demonstrate financial hardship due to COVID-19. In that situation, the insurer cannot terminate or conditionally renew the policy immediately after the expiration of the moratorium based on the policyholder’s past failure to pay the premium due to financial hardship as a result of COVID-19. However, if there is any other valid ground to terminate the policy, the insurer could do so after the moratorium expires.

How does the Emergency Regulation apply to policies where a notice of cancellation, non-renewal, or conditional renewal was already pending on or before March 30, 2020?
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The Emergency Regulation applies to covered property/casualty insurance policies in effect on March 30, 2020, regardless of whether a notice of cancellation, non-renewal, or conditional renewal was issued before such date.

How will an insurer treat nonpayment of premium during and after the moratorium?
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See Question 1 regarding the moratorium on cancellation, non-renewal, and conditional renewal and the deferral of premium payments. For individuals and small businesses who demonstrate financial hardship due to COVID-19 and do not make a timely premium payment, the Emergency Regulation also prohibits insurers from assessing late fees or reporting late payments to credit agencies. The Emergency Regulation provides that the insurer must allow the policyholder to repay such unpaid premiums in over twelve (12) monthly installments after the moratorium expires if the policyholder can still demonstrate financial hardship due to COVID-19.

If an insurer was planning to cancel or non-renew a policy now subject to the moratorium, is the policy now renewed for a full policy term?
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The Emergency Regulation only defers the effective date of an otherwise permitted termination or conditional renewal and does not prescribe the creation of a new full policy term.

How should a property/casualty insurer that experiences a delay in premium collection due to the moratorium treat the timing of the receivable for statutory accounting purposes?
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In the regular course, premiums that are owed but not more than 90 days past due are recognized as admitted assets for statutory accounting purposes. Executive Order No. 202.13 and the Emergency Regulation cause the due date for the payment of premiums subject to the moratorium to be extended by 60 days. The new due date for the payment of such premiums serves as the new start date for counting the 90 days for admitted asset purposes.

How long does the Emergency Regulation last?
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The grace periods and rights set forth in the Emergency Regulation are currently in effect but temporary, though they may be extended further.  Please check the Department’s website at https://www.dfs.ny.gov/consumers/coronavirus for updates.