Ernie Guerriero, CLU, ChFC, CEBS, CPCU, CPC, CMS, AIF, RICP, CPFA
On April 9, 2020, New Jersey Governor Phil Murphy signed an executive order which extends grace periods during which certain insurance companies, including health, life and property, and casualty insurance carriers, will be unable to cancel policies for nonpayment of premiums. Governor Murphy issued the order in an effort to address the loss of income and financial hardship for many affected by COVID-19.
The New Jersey executive order mandates the following changes:
- A minimum 60-day grace period will be required for health and dental insurance policies, and a minimum 90-day grace period will be required for life insurance, insurance premium-financing arrangements, and property and casualty insurance. The extended grace periods will not apply to employer-funded health plans, which are regulated exclusively by the federal government;
- Insurance carriers will be required to notify policyholders of this emergency grace period and to waive certain late fees, interest, or other charges associated with delays in premium payments as directed by the New Jersey Commissioner of Banking and Insurance;
- Insurance carriers will be required to pay any claim incurred during the emergency grace period that would be covered under the policy and are prohibited from seeking recoupment of any claims paid during the emergency grace period based on non-payment of premiums; and
- Unpaid premiums are made payable over a lengthy period, as appropriate and as directed by the Commissioner of Banking and Insurance.
The text of the Executive Order can be found here. https://nj.gov/infobank/eo/056murphy/pdf/EO-123.pdf
Statements of fact or opinion are the responsibility of the authors and do not represent an opinion on the part of officers, directors, or staff of the Society of Financial Service Professionals.