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By: Zach Moura
California Insurance Commissioner Ricardo Lara issued three notices to insurers on March 18, 2020 related to the novel coronavirus disease (COVID-19), all aimed at ameliorating the pandemic’s impact on the both insurers and insureds.
The first notice is addressed to all insurance companies and other licensees. The Commissioner recognizes that the COVID-19 outbreak is creating extraordinary circumstances that impact the ability of insurers to conduct insurance-related business. The Department of Insurance (DOI) intends to take those extraordinary circumstances, and resulting business disruptions, into account when evaluating insurer compliance with legal and commercial obligations during the COVID-19 outbreak. The Commissioner also encourages all companies to take steps to maintain their ability to process and pay insurance claims, and to provide other requisite consumer services, in “a reasonable and timely manner.”
The Commissioner’s second notice addresses a request that “all admitted and nonadmitted insurance companies that provide any insurance coverage in California including, life, health, auto, property, casualty, and other types of insurance” provide their insureds with at least a 60-day grace period to pay insurance premiums. The Commissioner wants to avoid cancellation of policies for “nonpayment of premium during this challenging time due to circumstances beyond the control of the insured.”
The Commissioner also requests that agents, brokers, and any other licensees who accept premium payments on behalf of insurers take steps to ensure that customers have the ability to make prompt insurance payments, including through arranging for online payment to eliminate in-person payment methods, to protect the safety of both workers and customers.
Commissioner Lara’s third COVID-19 notice follows on the California Department of Motor Vehicles’ request to California law enforcement that it exercise discretion in the enforcement of driver’s license and vehicle registration expirations for 60 days beginning March 16, 2020. The Commissioner encourages insurers to refrain from using the expiration of policyholders’ driver’s licenses or vehicle registrations during those same 60 days for any of the following reasons:
The notice will be reevaluated at the end of the 60-day period, or May 15, 2020.
The FMG Coronavirus Task Team will be conducting a series of webinars on Coronavirus issues every day for the next week. We will discuss the impact of Coronavirus for companies in general, but also for business in insurance, healthcare, California specific issues, cybersecurity, and tort. Click here to register.
FMG has formed a Coronavirus Task Force to provide up-to-the-minute information, strategic advice, and practical solutions for our clients. Our group is an interdisciplinary team of attorneys who can address the multitude of legal issues arising out of the Coronavirus pandemic, including issues related to Healthcare, Product Liability, Tort Liability, Data Privacy, and Cyber and Local Governments. For more information about the Task Force, click here.
You can also contact your FMG relationship partner or email the team with any questions at [email protected].
**DISCLAIMER: The attorneys at Freeman Mathis & Gary, LLP (“FMG”) have been working hard to produce educational content to address issues arising from the concern over COVID-19. The webinars and our written material have produced many questions. Some we have been able to answer, but many we cannot without a specific legal engagement. We can only give legal advice to clients. Please be aware that your attendance at one of our webinars or receipt of our written material does not establish an attorney-client relationship between you and FMG. An attorney-client relationship will not exist unless and until an FMG partner expressly and explicitly states IN WRITING that FMG will undertake an attorney-client relationship with you, after ascertaining that the firm does not have any legal conflicts of interest. As a result, you should not transmit any personal or confidential information to FMG unless we have entered into a formal written agreement with you. We will continue to produce educational content for the public, but we must point out that none of our webinars, articles, blog posts, or other similar material constitutes legal advice, does not create an attorney client relationship and you cannot rely on it as such. We hope you will continue to take advantage of the conferences and materials that may pertain to your work or interests.**