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Home > Coronavirus (COVID-19) Information > COVID-19 and Insurance Premium Finance Companies |
COVID-19 and Insurance Premium Finance Companies |
The State of New Jersey is working to lessen the financial impact of COVID-19 on residents and businesses struggling to pay their bills. On April 9, 2020, Governor Murphy issued Exec. Order No. 123 __ N.J.R __ (“EO 123”). EO 123 directed insurance premium finance companies to refrain from cancelling any policy or contract for nonpayment for a period of time as directed by the Commissioner of the Department of Banking and Insurance (“Commissioner”), to exercise appropriate forbearances on collection documentation, amortizing any unpaid payments over the remainder of the policy term or a period of up to 12 months, as appropriate, as directed by the Commissioner, and to refrain from seeking recoupment of paid claims during the emergency grace period. On April 10, 2020, the Department of Banking and Insurance (“Department”) issued Bulletin No. 20-17. Among other things, Bulletin No. 20-17 directs all insurance premium finance companies licensed pursuant to N.J.S.A. 17:16D-1 to -16 (“Insurance Premium Finance Company Act”) to:
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Questions and answers on Bulletin No. 20-17 |
Does Bulletin No. 20-17 apply to premium finance agreements entered into after March 1, 2020? Does Bulletin No. 20-17 require an insured to “opt in” to obtain the relief afforded in the Bulletin, for example, by stating that the borrower (i) is experiencing financial hardship due to COVID-19 and (ii) was in good standing under its insurance premium finance loan on March 1, 2020? Regarding the statement in Bulletin No. 20-17 that “[t]he extended grace periods described above shall apply to policyholders that were in good standing with their insurance carrier on March 1, 2020,” was the reference to “insurance carrier” intended to be “premium finance company”? What happens if the insured/borrower fails to make the installment payment to the insurance premium finance company after the grace period mandated by Bulletin No. 20-17? |
Updated April 23, 2020 |
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