The novel coronavirus (COVID-19) pandemic has affected the global insurance industry in unique ways. All stakeholders in the insurance industry – carriers, producers, and consumers – are affected by this global public health crisis and its economic consequences. In response, the National Association of Insurance Commissioners (NAIC) and U.S. state insurance regulators have taken and are continuing to take action to address the unique insurance-related challenges that face all stakeholders.
Sidley’s Global Insurance and Financial Services Group has assembled this compendium of materials that the NAIC and U.S. state insurance departments have issued in response to COVID-19. These materials are organized by topic (specifically, health insurance operations and coverage, travel insurance coverage, business interruption insurance coverage, operational issues for regulators, insurers and other regulated entities, and other insurance topics) and further divided by jurisdiction. Links to these materials can be found under the applicable topic below. State legislatures have also addressed the unique challenges raised by the COVID-19 crisis. Links to pending state legislation related to the intersection of COVID-19 and the insurance industry can be found under the applicable topic below.
This compendium has been last updated on March 30, 2021. Materials added since the January 6, 2021 version of this compendium was published are listed in bold.
This version of the compendium will be our final update. Sidley published the first version of this compendium on March 30, 2020 in response to the rapidly changing regulatory environment. More recently, the pace of state-issued guidance has slowed, as affected stakeholders have adjusted to the “new normal” during the pandemic, and as the increasing availability of vaccines offers the promise that the end of the pandemic is near. While Sidley does not expect to update this compendium in the future, should you have questions regarding COVID-19-related developments affecting insurance industry stakeholders, please contact a Sidley lawyer, and we would be pleased to offer assistance.
Click here to view the complete Sidley Update with links to all referenced materials in PDF format. Alternatively, links to the referenced materials for each topic covered in this Sidley Update can be found under the applicable topic below.
Regulatory Materials Related to Health Insurance Operations and Coverage
As a public health crisis, the health insurance industry is particularly affected by the COVID-19 pandemic. The NAIC and nearly all U.S. state insurance departments have issued guidance to health insurance carriers in the areas of telehealth, consumer outreach, special enrollment periods, prescription refills and cost-shares (co-pays, deductibles and co-insurance). Specifically, in this guidance, many of these states are:
- requiring insurers to waive cost-sharing for COVID-19 testing when ordered in accordance with Centers for Disease Control and Prevention (CDC) guidelines and prohibiting insurers from requiring prior authorization for such testing;
- requiring insurers to waive cost-sharing for COVID-19 vaccinations and administration;
- requiring insurers to permit early refills, except for drugs in certain drug classes such as opioids, when consistent with doctor/pharmacist approvals;
- directing insurers to keep their policyholders informed with accurate information about coverage for COVID-19-related testing and treatment;
- directing insurers to expand the availability of telemedicine for their policyholders and eliminating barriers to its use; and
- directing insurers to continue to ensure network adequacy given the anticipated increase in demand due to COVID-19.
Additionally, on March 19, 2020, President Trump signed into law the Families First Coronavirus Response Act, which, among other directives, requires health insurance carriers to provide coverage (at no cost sharing or pre-authorization/medical management requirements) for the testing and administration of FDA-approved COVID-19 tests.
Regulatory Materials Related to Travel Insurance Coverage
The COVID-19 pandemic has caused individuals and businesses to cancel existing travel plans. In response to this disruption to travel, as of March 30, 2021, the NAIC and 19 U.S. state insurance departments have issued guidance to both the insurance industry and consumers regarding travel insurance coverage and COVID-19. This guidance generally provides that unless a previously-held travel insurance policy contains an exception applicable to COVID-19 (e.g., an epidemic or pandemic exclusion), a policy of travel insurance that covers the risks of sickness, accident, or death incident to travel presumptively must cover such risks relating to COVID-19. However, this guidance also generally notes that a travel insurance policy that has been purchased more recently likely will not cover cancellations due to COVID-19 as the disease is now considered a known event.
Regulatory Materials Related to Business Interruption Insurance Coverage
The global COVID-19 pandemic has caused massive disruptions to both large and small businesses, and many will likely be adversely affected for the foreseeable future. In response to the economic consequences triggered by COVID-19, as of March 30, 2021, the NAIC and 24 U.S. state insurance departments have issued guidance to the insurance industry and consumers regarding how COVID-19 implicates business interruption insurance coverage. This guidance addresses, among other topics: how the economic consequences of COVID-19 affect a typical business interruption insurance policy; how an official declaration of a state of emergency affects business interruption insurance policies; and how employers’ remote work directives affect business interruption insurance coverage.
The state legislatures of California, Louisiana, Massachusetts, Michigan, New Jersey, New York, Ohio, Pennsylvania, Rhode Island and South Carolina have introduced legislation that would retroactively expand coverage under existing business interruption insurance policies to cover losses due to the COVID-19 outbreak. Additionally, the Business Interruption Insurance Task Force, comprised of ten members that represent the Illinois Department of Insurance and the insurance industry, was formed pursuant to legislation enacted in Illinois.
Regulatory Materials Related to Operational Issues for Regulators, Insurers and Other Regulated Entities
The societal-wide disruptions caused by the COVID-19 pandemic implicate the operations of both the insurance industry and regulators. In connection with these disruptions, nearly all U.S. state insurance departments have issued materials related to, among other topics: regulatory flexibility on filing deadlines, continuing education requirements for producers and grace periods for premium payments; insurers’ plans to deal with financial risk caused by the pandemic; and the fair treatment of insurance consumers during this public health crisis.
Regulatory Materials Related to Other Insurance Topics
The COVID-19 pandemic has affected most areas of daily life. Accordingly, all lines of insurance are potentially implicated by the spread of this disease. U.S. state insurance departments have issued guidance on a wide range of other insurance-related topics, including, but not limited to, life insurance, medical malpractice insurance, workers’ compensation insurance, refunding insurance premiums for automobile insurance and certain other lines of business affected by the COVID-19 pandemic, waiver of vacancy clauses in commercial insurance policies, and extending personal automobile insurance coverage to delivery drivers.
Guidance from the state insurance departments pertaining to the COVID-19 pandemic is changing on a daily basis. Accordingly, this compendium of state insurance departments materials issued in response to COVID-19 may become outdated very quickly. Please contact us if you have any questions about any of the materials referenced in this compendium.
Sidley Austin LLP provides this information as a service to clients and other friends for educational purposes only. It should not be construed or relied on as legal advice or to create a lawyer-client relationship. Readers should not act upon this information without seeking advice from professional advisers. In addition, this information was not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any U.S. federal, state or local tax penalties that may be imposed on such person.
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