Insurance Circular Letter No. 17 (2017)

October 4, 2017

STATUTORY AND REGULATORY REFERENCES: Insurance Law Article 26, Insurance Law Sections 3240 and 4228, and 11 NYCRR 216 (Insurance Regulation 64)

Hurricanes Maria and Irma caused massive destruction in Puerto Rico, the U.S. Virgin Islands and other areas when they struck with powerful winds and rain. New York State recognizes that the current situation is devastating and is committed to assisting recovery efforts in Puerto Rico, the U.S. Virgin Islands and those other affected areas.

The Department of Financial Services (“Department”) is aware that New York domiciled insurers may have written policies that extend to lives and property located in Puerto Rico, the U.S. Virgin Islands and other affected areas. In this emergency situation, the Department expects all New York domiciled insurers to do their part. Due to the severity of this situation and extent of damage to people, homes and businesses, it is imperative that members of the insurance industry work towards fair and speedy resolutions of claims. Insurers should also fulfill their obligations as good corporate citizens by assisting policyholders with helpful information regarding emergency aid, tips for damage prevention, and resources for remediating damage. In addition, insurers should recognize that affected policyholders may be delayed in responding to their premium obligations. In special circumstances, a New York life insurer may apply to the Department for approval of payments made to its New York licensed agents in excess of the usual regulatory limits for their immediate needs to maintain their practices in Puerto Rico, the U.S. Virgin Islands and other areas affected by this season’s storms.

Accordingly, the Department reminds all carriers covering people, homes and businesses in the areas affected by Hurricanes Maria and Irma of their obligations regarding the following:

• Carriers are required to increase their resources to ensure proper treatment of their policyholders;
• Carriers and their third party adjusters must promptly assess claims;
• Affected policyholders are entitled to fair and equitable claim settlement treatment under the New York Insurance Law and Regulations;
• Carriers must not deny claims caused by multiple perils in the event that each peril is not covered under the applicable policy;
• The Department expects timely payments of claims that arise out of covered perils;
• Life insurers are permitted under the Insurance Law and encouraged to accept proof of death in a form other than a death certificate if one cannot be obtained to assist beneficiaries in filing claims;
• In special circumstances, a New York life insurer may apply to the Department for approval of payments made to its New York licensed agents in excess of the usual regulatory limits for their immediate needs to maintain their practices in Puerto Rico, the U.S. Virgin Islands and other areas affected by this season’s storms (NB - requests should generally provide uniform payments to affected agents and limit the duration of the payments to six months);
• Any claims for emergency or other medical treatment should be promptly processed in accordance with all applicable federal and state laws; and
• Carriers should make every effort to reasonably accommodate affected policyholders who miss or make late premium payments due to hardships caused by these hurricanes.

The Department will continue to assist affected residents and businesses with insurance related issues and continue to monitor the situation. The Department appreciates all insurers’ cooperation in this effort.

Sincerely,

Maria T. Vullo
Superintendent