NJ Department of Insurance Mandates Premium Relief

While there have been many insurance carriers providing relief voluntarily, particularly for personal auto insurance, there had not been any official guidance from the NJ Dept. of Banking and Insurance in regards to requirements that insurance companies refund premiums or provide any specific premium relief.  This changed yesterday when the NJ Dept. of Banking and Insurance issued a Bulletin No. 20-22.  This bulletin requires all carriers to make an initial premium refund or other adjustments to all adversely-impacted New Jersey policyholders, and for each month that the public health emergency is in effect, in the following lines of insurance no later than June 15:

  • Private passenger auto insurance
  • Commercial auto insurance
  • Workers’ compensation insurance
  • Commercial multiple-peril insurance
  • Commercial liability insurance
  • Medical malpractice insurance
  • Any other line of coverage where the measures of risk have become substantially overstated as a result of COVID-19

Insurers may comply with the mandated premium refund by providing a premium credit, reduction, return of premium, dividend, or other appropriate premium adjustment based on:

  • Reclassification of exposures to comport with current exposure
  • Reduction of the exposure base (miles driven, payroll, receipts, etc) to reflect actual or anticipated exposure

Insurers may also provide premium relief to individual policyholders without prior approval by the Department by reassessing the classification and exposure bases of affected risks on a case-by-case basis for recent, current, and upcoming policy periods or any portion thereof, following existing rating plans.

If you are a current client there is not any action you need to take at this time.  This bulletin was just released, and it will almost definitely take a bit of time for our carriers to respond.  Rest assured we are communicating with our carriers and will do everything we can to be sure to get you the relief you need.  Of course, please feel free to reach out to us with any questions in the meantime whether you are a current client or not.

Read the full Bulletin here.