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MARCH 5, 2020

NAIC Issues Business Interruption Data Call in the Wake of COVID-19

MAY 5, 2020

Late last week, the National Association of Insurance Commissioners (“NAIC”) issued a letter online to all property and casualty insurers on behalf of insurance regulators nationwide regarding a data call to collect information related to business interruption insurance and COVID-19. Carriers can expect to receive the letter directly on—or shortly after—Friday, May 8, 2020. In the meantime, Michelman & Robinson breaks down the information included in the correspondence and answers questions about the data call, the information requested, and who is affected by the NAIC’s outreach.

Q: What kind of information is being requested by the data call?

A: The data call is being administered in two parts. Toward that end, insurance companies are being asked to complete two Microsoft Excel spreadsheets (found on the NAIC website), seeking the following information:

Business Interruption Premium and Exposure

The first spreadsheet (Part 1) asks for information on premiums and policies. More specifically, each insurer is to list its NAIC Group Code, Group Name, NAIC Company Code(s), and Company Name. Next, carriers are to list their total premium written in 2019 for (1) Commercial Multiple Peril and any other applicable lines with business interruption coverage and (2) Businessowners Policies in each of participating state and territory. Regarding both of these policy categories, each company must include:

  • The number of policies in force as of December 31, 2019, separated by small, medium, and large businesses
  • The percentage of policies with physical loss requirement, separated by small, medium, and large businesses
  • The percentage of policies with exclusions for viral contamination, virus, disease, pandemic, or similar exclusion, separated by small, medium, and large businesses

Business Interruption Claims and Losses

The second spreadsheet (Part 2, which corresponds to the second part of the data call) deals with claims and losses. Unlike the information on the first spreadsheet, which must be provided one time only, the second spreadsheet is to be submitted monthly. Yet similar to Part 1, the second spreadsheet must include each insurer’s NAIC Group Code, Group Name, NAIC Company Code(s), and Company Name. In addition, carriers are to report the following information, by state and territory, separately for (1) Commercial Multiple Peril and any other applicable lines with business interruption coverage and (2) Businessowners Policies:

  • Number of Claims Reported
  • Number of Claims Closed with Payment
  • Number of Claims Closed without Payment
  • Paid Loss
  • Case Incurred Loss

Q: Who must participate in the data call?

A: The data call is directed at all admitted and non-admitted domestic insurers (including surplus lines insurers domiciled in a U.S. state or territory) that wrote business interruption coverage in the 50 states, the District of Columbia, and all U.S. territories in 2019 or 2020. Alien insurers are excluded from the data call, which also does not apply to life or health insurance companies, monoline financial guaranty or mortgage guaranty carriers, title or fidelity insurers, non-medical professional liability companies, and reinsurers.

Q: When is the data due?

A: Information pertaining to Part 1 is due May 22, 2020

Information pertaining to Part 2 is due monthly, with the first report containing cumulative claims data reported as of June 8, 2020 due June 15, 2020.  The data call reporting schedule continues as follows:

  • Second report: cumulative claims data reported as of July 8, 2020, due July 15, 2020
  • Third report: cumulative claims data reported as of August 10, 2020, due August 17, 2020
  • Forth report: cumulative claims data reported as of September 10, 2020, due September 17, 2020
  • Fifth report: cumulative claims data reported as of October 10, 2020, due October 19, 2020
  • Sixth report: cumulative claims data reported as of November 12, 2020, due November 19, 2020

Q:  How can I submit my company’s data and who should it go to?

A: Information should be submitted on a group basis, aggregating data for all companies within a group into one premium file and one claim file for each report date. If your company is not part of a group, your company code should be filled in for both the “group” and “company code” fields in the spreadsheets.

To submit data, you must assign a company contact to file the report in the Regulatory Data Collection (RDC) application. This requires a “myNAIC” account login as well as the role “COVID_User_PR.” In order to set up an account and have the COVID_User_PR role assigned, send a request to: help@naic.org.

Once the login setup is complete and the proper role is assigned, your company contact will be able to log into the NAIC portal and submit the proper template spreadsheets at: https://content.naic.org/industry_property_casualty_data_call.htm.

Q: Is my company’s information kept confidential?

A: The NAIC letter linked above provides: “To the extent permitted by applicable state law, your company’s data will be kept confidential. Participating states collect the Confidential information under contract with the NAIC, which contract requires the NAIC to protect and maintain the Confidential information as confidential. All Confidential information shall be protected and maintained in accordance with such contract and using reasonable security measures similar to those measures used by the NAIC for the protection of its own Confidential information of a similar kind.”

Q:  Is there anything more that I should know about the purpose of this data call?

A: The NAIC posted a memorandum that contains common definitions and provides commentary on the purpose of this data call. It can be accessed here. Any remaining  questions relating to the data call can be emailed to coviddata@naic.org.

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.