UPDATE – May 15, 2020: In a press release, California Insurance Commissioner Ricardo Lara extended his previous order requiring insurance companies to partially return insurance premiums amid the ongoing COVID-19 pandemic. The order now includes the month of May, in addition to the already included months of March and April. Please see below to reference original request.
April 16, 2020
Newfront is on the frontline monitoring the myriad of updates designed to help you weather the COVID-19 crisis. State regulators are assessing conditions and releasing requests and orders to insurance companies in their respective states. Insurance Commissioners in both California and Washington State have recently issued press releases addressing measures to provide relief to policyholders’ resulting from COVID-19 shelter-in-place orders.
The State Insurance Commissioner of California has instructed and the Washington State Insurance Commissioner has guided insurance companies in issuing applicable premium refunds, credits, and/or reductions. We are working with insurance companies to assess eligibility and learn more about their responses. Newfront will keep you informed as additional information is made available.
In a press release on April 13, 2020, CA Insurance Commissioner Ricardo Lara ordered insurance companies to return insurance premiums to policyholders where the loss exposures and premium bases have fallen substantially as a result of the COVID-19 pandemic. “Today’s mandatory action will put money back in people’s pockets when they need it most,” stated Lara. Per the bulletin, Lara orders insurers to make an initial premium refund for the months of March and April to all adversely impacted California policyholders, and can include May if the shelter-in-place restrictions continue. The lines of business included in the order are:
- Private passenger automobile
- Commercial automobile
- Workers’ compensation
- Commercial multi-peril
- Commercial liability
- Medical mal-practice
- Any other insurance line where the risk of loss has fallen substantially as a result of the COVID-19 pandemic
Note that the CA Commissioner grants each insurer reasonable flexibility in determining how to quickly and fairly accomplish the refunds to policyholders. Insurers may refund premium without prior approval by the Department of Insurance if they apply a uniform premium reduction for all policyholders in an individual line of insurance. Insurers must comply with this order within 120 days of this press release (August 2020).
WA Insurance Commissioner, Mike Kreidler issued a press release on April 7, 2020 in which he “urged” insurance companies in Washington to consider refunding premium to personal auto policyholders as a result of reduced risk and losses following WA Governor Inslee’s COVID-19 “Stay Home, Stay Healthy” order. Insurers must submit a rate filing with his office, and he is expediting regulatory reviews for approval. Several insurers have already announced refunds or temporary discounts in WA.
Newfront will continue to keep you informed as information becomes available.
The information provided is of a general nature and an educational resource. It is not intended to provide advice or address the situation of any particular individual or entity. Any recipient shall be responsible for the use to which it puts this document. Newfront shall have no liability for the information provided. While care has been taken to produce this document, Newfront does not warrant, represent or guarantee the completeness, accuracy, adequacy, or fitness with respect to the information contained in this document. The information provided does not reflect new circumstances, or additional regulatory and legal changes. The issues addressed may have legal, financial, and health implications, and we recommend you speak to your legal, financial, and health advisors before acting on any of the information provided.