Like nearly every sector of the U.S. economy, the insurance industry, including insurance carriers, agents, brokers, adjusters, and other licensees, is being severely affected by the COVID-19 outbreak. Beginning in early March, state governors, health departments, insurance commissioners, and other regulatory authorities began issuing orders imposing local and state restrictions on certain commercial activities. Although this situation remains fluid and will continue to change, insurance services remain an essential business, subject to some limitations in certain jurisdictions.

The Financial Services Sector has been designated as one of the 16 essential critical infrastructure sectors by the Department of Homeland Security’s Cybersecurity & Infrastructure Security Agency (CISA) in its March 19, 2020 and March 28, 2020 (UPDATED) guidance. The CISA guidance reiterated the essential nature of financial services personnel, including: “Workers who are needed to process and maintain systems for processing financial transactions and services (e.g., payment, clearing and settlement; wholesale funding; insurance services; and capital markets activities).”

Many state and local jurisdictions have adopted the CISA guidance as a model when determining essential business operations; however, not all jurisdictions have been clear in this regard. Notwithstanding that some jurisdictions have not expressly adopted the CISA guidance in their orders, most expressly define “Essential Business” to include insurance services.

In addition to state orders mandating the closure of non-essential business activities, many state insurance commissioners have issued orders that, among other things, encourage, and in some cases mandate, that insurers provide their insureds with extended premium grace periods to eliminate cancellation and non-renewals of policies for failure to pay premium during the COVID-19 crisis.

We have been tracking state-level orders that could impact the insurance industry, including stay-at-home and premium grace period orders, and will continue to update in an effort to provide a resource for insurance carriers, agents, brokers, adjusters, and other insurance licensees to understand the current landscape and remain fully apprised of developments that will directly impact their business.

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