North Carolina Insurance Commissioner Mike Causey has extended an order issued last month to the insurance industry requesting that insurers defer policyholder payments for an additional 30 days, beginning April 27.
The original order, issued March 27 and amended on March 30, provided an automatic stay of loss requirements, premium and debt deferrals in response to the COVID-19 health emergency order issued by the state and federal government.
The emergency order extension gives policyholders in all 100 counties in the state the option to defer insurance premium payments should they need to do so. The order does not require that companies notify all policyholders or consumers through mass communication of the availability of a deferral.
The extended order notes the disaster is ongoing and “continues to affect all people throughout the state.”
“Based on the nature and severity of the disaster, North Carolina General Statute … allows the Commissioner to extend the deferral period,” the April 21 order states. The new order will expire at midnight on May 26. Any payments that are due, including payments that were previously deferred, may be deferred an additional 30 days.
Should the consumer choose the option to defer, companies may not process cancellations. No additional fees or penalties may be imposed should the consumer choose this option. The deferral under the order includes not only premium and debt payments but cancellations and proof of loss requirements, as well.
The law does not allow for a premium “holiday” or a “waiver,” NCDOI said. Premium payments will still need to be paid, but this allows a 30-day deferral or delay of the premium to give impacted consumers extra time to arrange for payment. Insurers must allow insureds to defer or delay payments that are due during the period of the order, the department said.
Once the deferral expires, policyholders will be required to bring their payments current to avoid cancellation. Insurers will not pay claims on policies that are in arrears.
The commissioner’s order applies to all insurance companies defined in the North Carolina statute including health insurance, residential property and automobile insurance. This order also applies to collection agencies, motor clubs and premium finance companies licensed by the North Carolina Department of Insurance. The order will defer not only premium payments but will also defer statutory time requirements. Notices of cancellation, for example, will be deferred.
NCDOI said the order requires insurance companies to give their customers affected by the COVID-19 health emergency the option to defer premium and debt payments. It is up to the customer to notify their insurance company of their desire to exercise the option to defer premium and debt payments.
“My hope is this deferral will provide policyholders breathing room while they get back on their feet as a result of economic hardships due to the COVID-19 health emergency,” Causey said at the time of the original order last month.
Topics Carriers North Carolina
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