June 29, 2020
June 22, 2020
- PPP Loan Forgiveness Application Forms Updated and Streamlined
- Nevada Division of Insurance to Disallow Policy Exclusions Related to COVID-19
- CDI Announces New Order Regarding Workers’ Compensation Premium Savings for CA Businesses Affected by COVID-19
june 15, 2020
june 10, 2020
- Note to the SBA: Debtors in Bankruptcy Are Eligible for PPP Loans
- California Modifies the Tolling of Statutes of Limitations in Civil Cases
june 8, 2020
- CCPA Enforcement Date Fast Approaching Regardless of COVID-19
- Hotels in California May Be Days Away From Reopening: What Hoteliers Need to Know
June 4, 2020
may 29, 2020
may 28, 2020
- House Introduces Pandemic Risk Insurance Act of 2020 in the Wake of COVID-19 Business Interruption Claims
may 27, 2020
- Hoteliers Beware: a Return to Business Post-Pandemic Brings With It Potential Legal Liability
- House Contemplates Revisions to the Paycheck Protection Program
may 15, 2020
may 14, 2020
- U.S. House Democrats Introduce HEROES Act, a New $3T Stimulus Package
- SAFE Banking Act for Cannabis-Related Businesses Included in the HEROES Act
may 12, 2020
may 8, 2020
- Treasury and the SBA Issue Guidance Regarding the Employee Retention Credit
- Businesses Reopen in Los Angeles County as Stage 2 of California’s Statewide Plan Begins
- Update: Large Employers Required to Pay Coronavirus-Related Sick Leave Under New L.A. County Ordinance
may 6, 2020
- SBA Extends PPP Certification Safe Harbor to May 14
- A 2008 Redux: IRS Provides Temporary Cash/Stock Dividend Relief for Publicly Offered REITs and RICs
- EPLI Insurance and Employee Benefits in the Age of the Coronavirus
may 5, 2020
- Update: PPP Guidance Issued by the SBA and U.S. Treasury at Odds With the CARES Act—Michelman & Robinson Files First-of-Its-Kind Lawsuit Challenging FAQs
- NAIC Issues Business Interruption Data Call in the Wake of COVID-19
may 4, 2020
- PPP Guidance Issued by the SBA and U.S. Treasury at Odds With the CARES Act—Michelman & Robinson Files First-of-Its-Kind Lawsuit Challenging FAQs
may 1, 2020
april 29, 2020
- Planning for Your Employees' Return to the Workplace
- Los Angeles Hospitality Workers Among Those Thrown a Potential Lifeline
april 24, 2020
- Attention Cannabis Businesses: Hope May Be on the Horizon for Federal COVID-19-Related Relief
- California Department of Insurance Issues Notice Granting Tax-Filing Extension in Response to COVID-19
- SEC Approves Amendments to Nasdaq and NYSE Continued Listing Requirements Due to the COVID-19 Pandemic
April 23, 2020
april 21, 2020
- Additional Funding Is on the Way to Resurrect the PPP
- Certifying Your PPP Loan: Proceed With Caution
april 17, 2020
april 16, 2020
- Employment in the Wake of Coronavirus: EEOC and OSHA Guidance Allows Employers to Go Where They Could Not Go Before
- New Yorkers Ordered to Stay at Home Even Longer Amid the COVID-19 Crisis
- Paycheck Protection Program Funds Exhausted
april 15, 2020
- Attention Insurers: the CDI Has Ordered You to Fairly Investigate All Business Interruption Insurance Claims Caused By the COVID-19 Outbreak
April 14, 2020
- Insurance Companies Have Been Ordered to Provide COVID-19-Related Premium Relief to Businesses and Drivers in California
- What to Do If Your New York Business Has Been Deemed Non-Essential
APRIL 13, 2020
- IP Deadlines and Fees Extended Under the CARES Act
- Employment in the Wake of Coronavirus: Reintegrating Your Workforce in the New Normal
APRIL 10, 2020
- You Successfully Applied for and Received a PPP Loan Under the CARES Act: Now What?
- Safer at Home Order in L.A. Extended to May 15
- Maintaining Your Trade Secrets During the Coronavirus Crisis
APRIL 9, 2020
april 8, 2020
- Congress Looks to Bolster the PPP With Another $250B in Funding
- U.S. Treasury Provides Further Guidance to PPP Borrowers and Lenders
- L.A. Mayor Amends COVID-19-Related Paid Sick Leave Ordinance
april 7, 2020
- Clarifying the Paycheck Protection Program: Payment of Insurance Premiums and Loan Forgiveness under the CARES Act
April 3, 2020
april 2, 2020
april 1, 2020
March 31, 2020
march 30, 2020
- Large Employers Required to Pay Coronavirus-Related Sick Leave Under New L.A. Ordinance
- Insurance Coverage Potentially Triggered by COVID-19
- Attention Insurers: CDI Orders Mandatory Call for Business Interruption Coverage Information in the Wake of COVID-19
- DOL Is Requiring Employers to Post Families First Employee Rights Notice
March 27, 2020
- A Comprehensive Guide to Understanding Coronavirus-Related State Assistance Programs: Who is Giving What to Whom (Part II)
- IRS Releases “People First Initiative” Temporarily Adjusting and Suspending Key Compliance Actions
- HHS Relaxing Enforcement of HIPAA to Facilitate Sharing of Information During the COVID-19 Crisis
March 26, 2020
march 25, 2020
march 24, 2020
- Navigating the Coronavirus Pandemic: a Critical Business Review Checklist
- SBA Loans for Companies Impacted by Coronavirus
- SEC Relaxes Federal Proxy Rules for Annual Meetings
march 23, 2020
- Federal Reserve Responds Boldly to Coronavirus-Related Economic Downturn
- The Number of Jurisdictions Implementing Stay-at-Home Orders Is Increasing Exponentially
- Michelman & Robinson’s Guide to Coronavirus-Related Paid Sick Leave and Unemployment Insurance Laws in the Tri-State Area
MARCH 21, 2020
- New Jersey Orders Its Residents to Stay Home
- “Essential Businesses”— What if I am Stopped?
- The IRS and States Provide Tax Relief in the Wake of the Coronavirus Pandemic
MARCH 20, 2020
- New York Governor’s PAUSE Order
- Illinois Governor’s Statewide Stay-at-Home Order
- Force Majeure Clauses in Commercial Real Estate Contracts
MARCH 19, 2020
- SEC Provides Regulatory Relief for Public Reporting Companies
- Student Loan Borrowers Can Breathe a Sigh of Relief, At Least Temporarily
- California Governor's Statewide Stay-At-Home Order
MARCH 18, 2020
- "Shelter in Place" Orders
- Telecommuting in the Age of Coronavirus
- Families First Coronavirus Response Act Just Passed by the Senate and Signed Into Law by the President
MARCH 17, 2020
- M&R Coronavirus Risk Mitigation Team: A Multi-Disciplinary Legal Team Ready To Immediately Address A Host Of Coronavirus-Related Issues for Businesses, Quickly And Holistically
MARCH 16, 2020
MARCH 5, 2020
Insurance Companies Have Been Ordered to Provide COVID-19-Related Premium Relief to Businesses and Drivers in California
APRIL 14, 2020
By virtue of the COVID-19 outbreak and resulting stay-at-home orders in effect throughout California, a substantial number of businesses have closed (at least temporarily) and the roads are virtually free of traffic.
Consequently, premiums paid for certain business-facing policies as well as private passenger automobile insurance may not reflect the present-day risk of loss associated with operating a company or driving a car. In fact, diminished payroll and receipts due to closure orders have, according to some, dramatically reduced the risk of liability loss for businesses, and reduced driving has resulted in fewer accidents, injuries, and fatalities on public highways and roads.
The good news for certain businesses and consumers is that this reality will likely result in some money going back into their pockets, in the form of insurance premium credits, rebates, rate reductions, and the like.
Indeed, California Insurance Commissioner Ricardo Lara has ordered insurance companies to return premiums to businesses and consumers in an effort to provide financial relief during the coronavirus crisis. In this alert, Michelman & Robinson answers the questions you may have about Commissioner Lara’s directive.
Q. What exactly does the order issued by Commissioner Lara cover?
A. Commissioner Lara’s mandate applies to insurance premiums paid for the months of March and April, and likely through May, assuming stay-at-home restrictions continue through that month. In terms of the types of policies subject to the order, they include:
- Workers’ compensation
- Commercial multi-peril
- Commercial liability
- Medical malpractice
- Commercial automobile
- Private passenger automobile
- Any other insurance line where the risk of loss has fallen substantially as a result of the COVID-19 pandemic
Q. What are insurance companies being ordered to do by the California Department of Insurance?
A. Insurers are being told to provide a premium credit, reduction, return of premium, or other appropriate premium adjustment as soon as possible, and no later than August 2020. This relief is in addition to that already requested by Commissioner Lara—for instance, a 60-day grace period for policyholders to pay their premiums so that policies are not cancelled for nonpayment of premium in the midst of the disruption caused by the pandemic.
Of note, several auto insurance companies have already announced voluntary premium refunds to drivers. By way of his order, Commissioner Lara looks to bring all other carriers into the fold, adds commercial lines to the mix, and sees to it that insurers comply with California’s consumer protection laws so that refunds are not discriminatory or inadequate.
Q. Do carriers need to obtain any approvals from the CDI to facilitate premium refunds?
A. No, CDI approval is not required, so long as insurance companies follow the methods outlined in Commissioner Lara’s bulletin to calculate the relief to be provided, including using an average percentage based on estimated change in risk or exposure.
Q. Beyond providing premium relief is there anything else carriers are being told to do in relation to Commissioner Lara’s order?
A. Yes, within 60 days, insurers are to report back to the CDI all premium refunds they have issued or expect to issue.
Q. How should insurance companies respond to the commissioner’s directive and, most importantly, is it legal?
A. As stated above, some insurers have already indicated they will be refunding automobile premiums to their auto insurers. Others are considering the approach contained in Commissioner Lara’s bulletin and undertaking some internal evaluation and data crunching to determine the financial impact of his order. And then there is another group of carriers, especially smaller ones, hit hard by the coronavirus outbreak and unsure if they can afford to refund any premiums at this time.
Those in the latter category—as well as some insurers in the position to abide by the CDI directive, but concerned about the precedent of such an action—are asking the following question: what is the commissioner’s authority to demand this uniform action? The answer involves a look into the California Insurance Code, which requires carriers to file rates for approval before implementing them. Toward that end, insurers cannot charge rates that are “excessive, inadequate, or unfairly discriminatory.” More chilling from an insurance company’s perspective is language in the statute saying, “No rate shall be approved or remain in effect . . .” which is excessive.
The CDI has relied on this “remain in effect” language to periodically review individual insurer’s quarterly and annual statements, and have thereafter notified those whose rates they believe are excessive to make adjustments in their rate filings. It seems that Commissioner Lara is attempting to do that very same thing now, but on a grand scale.
However, there is no specific authority in the California Insurance Code upon which he can rely to demand that carriers make uniform reductions to premium rates in the wake of the COVID-19 disaster. For this reason, any insurer that questions or otherwise hopes to contest the commissioner’s action would have (at the very least) a right to a hearing. At the same time, insurance companies could argue that the COVID-19-related premium relief has been improperly imposed by way of Commissioner Lara’s bulletin, and that such a uniform action requires him to promulgate a regulation in accordance with the California Government Code.
Bottom line: for insurers uneasy about the insurance premium credits, rebates, and rate reductions commanded by way of Commissioner Lara’s order, there is room for challenge.
We are working diligently to keep our clients up to date on coronavirus-related developments. Nevertheless, these developments are changing daily and, in some cases even hourly, so it is important that you make sure you are dealing with the most current information. That being said, this alert is not offered, and should not be relied on, as legal advice. You should consult an attorney for guidance and counsel regarding any specific concern or situation.