WASHINGTON, D.C. — David A. Sampson, president and CEO of the American Property Casualty Insurance Association (APCIA) delivered the following remarks today before the National Association of Insurance Commissioners (NAIC) special session on COVID-19.
“As one of the nation’s essential services, the insurance industry has vast experience with crisis management, and this enables property casualty insurers to respond to the increased demands presented by the national and global implications of COVID-19.
“We recognize that all of us -- regulators, carriers, and the trades -- are going through tremendous change as we revamp our operations, transition to remote working arrangements, and implement contingency and continuity plans to protect our employees from potential pandemic exposure.
“All of this is happening while we actively respond to COVID-19 and stay focused on protecting and serving our customers.
“Undoubtedly, all of our systems are experiencing many stress points. As a result, on behalf of our customers, we are committed to working closely with the NAIC and state regulators to ensure a smooth, successful and coordinated response to the current COVID-19 environment.
“With these unprecedented conditions, there are several important issues that warrant immediate consideration by the NAIC and state regulators.
The more the NAIC can help coordinate data calls to make them uniform, limited in scope, and reasonable in timing, the more insurers will be able to focus on our customer service obligations.
Many states in the past have requested that insurers be flexible or show forbearance regarding premium due dates, cancellation/non-renewal requirements, and other deadlines that can be disrupted in a catastrophe situation. We are starting to see similar requests now, and such requirements should be consistent with prudent insurance principles and similar across states and across lines.
Following many past disasters, where insurers have given policyholders forbearance to make late payments, the NAIC helped coordinate states to provide parallel accounting relief for insurers. Regulatory flexibility is needed for the accounting treatment for overdue premium receivables.
It will be increasingly important that insurers are allowed to deploy new technologies such as drones, mobile applications, and telemedicine for workers’ compensation claims without running afoul of regulatory barriers.
The relaxation of requirements for first-class mail delivery and allowing electronic delivery for all communications to customers, the NAIC, and state insurance departments, will facilitate better communications at this critical time.
We encourage regulators to avoid implementing demands on the content of consumer communications. If there are necessary communications mandates, they must be uniform and flexible.
We are urging states to be flexible in administering and enforcing statutory time restrictions related to claims handling, notification obligations, third-party administrator audits, and regulatory filings, for example.
Finally, and most importantly, it is vitally important to discourage efforts to impose retroactive coverage on insurance policies. If policymakers force insurers to cover losses that do not exist under current insurance contracts, the stability of the sector could be impacted.
“Insurers recognize our critical role in protecting the nation’s supply chains and that American businesses are facing unprecedented tragedy, however retroactively mandating insurance payouts for coverage that was never sold could have dramatic repercussions for all families, individuals, motorists, and businesses – in addition to the global markets.
“Lawmakers and regulators are also taking immediate actions. APCIA supports the federal assistance programs that the Administration and Congress are proposing to deliver funding directly and quickly to vulnerable business communities.
“We stand ready to work tirelessly with policymakers to ensure our nation recovers from this crisis and that the economy and insurance markets are efficient and work for American consumers.
“The key to all of our success will be maintaining an open line of communication where we can keep you informed of our members’ challenges, as well as create an opportunity for you to let us know how we can help you and your fellow regulators.”