NAIC Considerations for Year End
The insurance industry in the age of COVID-19 has seen challenges in a variety of areas. The current economic climate has resulted in heightened monitoring by regulators to protect consumers, prevent fraud, as well as allow insurers to pivot their ability to provide services to the public with greater agility.
The NAIC’s recent meeting included several presentations with business continuity and pandemic financial resources for both individuals and companies impacted by the current economic crisis. With year-end reporting drawing close, the NAIC continues its support of companies affected by this crisis.
What you need to know
Several types of insurance have provisions and exclusions that may be triggered as a result of COVID-19. It is important for both industry and consumers to understand the impact, the details of policy documents and exceptions that state regulators may allow for the current situation.
Some key areas that are being reviewed by both the NAIC and regulators are:
- Health Insurance
- Coverages and out-of-pocket costs that vary greatly based on policy limits
- For Medicaid or Medicare, COVID-19 testing and treatment should be covered with limited costs to the covered individual
- Limited-duration health coverage policies that have significant gaps in coverage
- Travel Insurance
- Business Interruption Insurance/Event Cancellation Insurance
- Workers’ Compensation Insurance
- General Liability and Directors or Officers
- Coverage may not include pandemics and could be extremely limited
- These areas are of great concern and may be up for debate with federal and state legislatures as the pandemic grows or continues into 2021; particularly for workers’ compensation and business liability
- Life Insurance
- There is no pandemic exclusion for life insurance; however, accidental death and dismemberment policies are more limited and would not likely cover claims caused by illness or disease relative to COVID-19
- As annuity contracts are often tied to long-term interest rates, or equity markets, this is a regular monitoring area. Performance of the underlying investments could be a concern.
For a review of the changes to Annual Statement Reporting, see the annual year-end checklist here. The NAIC will continue to provide COVID-19 data and reporting in a special Coronavirus Resource Center on their website which has state, line of business and resource links for all areas of insurance.
With hope on the horizon in the form of several successful vaccines, 2021 is looking brighter. I know we all can’t wait to put 2020 behind us. If you have any questions or would like assistance with additional information, please feel free to contact me directly.