Temporary Moratoriums and Weather Events

MARTIN O'MALLEY Governor ANTHONY G. BROWN Lt. Governor [LOGO] INSURANCE ADMINISTRATION 200 St. Paul Place, Suite 2700, Baltimore, Maryland 21202 Direct Dial: 410-468-2301 Fax: 410-468-2306 Email: pjohnson@mdinsurance.state.md.us 1-800-492-6116 TTY: 1-800-735-2258 www.mdinsurance.state.md.us BETH SAMMIS Acting Commissioner KAREN STAKEM HORNIG Deputy Commissioner P. RANDI JOHNSON Associate Commissioner Property & Casualty ### BULLETIN 10-26 DATE: September 1, 2010 TO: All Property and Casualty Insurers and Interested Parties RE: Temporary Moratoriums and Weather Events In light of the fact that we are now in Hurricane Season, the Maryland Insurance Administration would like to take this opportunity to remind property and casualty insurers of COMAR Regulation 31.08.12 – Temporary Moratoriums and Weather Events. Pursuant to this regulation, any carrier seeking to implement a temporary moratorium must have previously filed with the Administration its moratorium protocol. The protocols are designed to have the least impact on the conduct of business in the State and may only be triggered under certain circumstances. While there are some exceptions set forth in 31.08.12.04, generally the limitations in 31.08.12.03 apply. Specifically, 31.08.12.03 (C) states as follows: - (C) Moratoriums shall be based on the following weather or non-weather related events or emergencies and are not effective until: - (1) The National Weather Service issues a hurricane or tropical storm watch, warning, or advisory for part of the State or the entire State;... In addition, paragraph D sets forth a limitation as to the scope of the moratorium by stating: - (D) The moratorium shall be limited to: - (1) Those areas of the State that are impacted by the National Weather Service watch, warning, or advisory;... And paragraph E of the regulation makes clear that the moratorium may only be applied to those lines of business that are reasonably expected to be impacted by the impending weather event. Until such time as the National Weather Service has issued a warning or watch for any part of the State of Maryland, no insurer may implement a moratorium. To assist carriers in properly implementing a temporary weather related moratorium, we would direct your attention to the National Weather Service website at: http://www.nws.nnoaa.gov or http://www.nhc.noaa.gov and then click on Maryland to see if any warnings, watches or advisories are in place for the State or any portion thereof. In addition, the regulation requires carriers to provide notice to the Administration of its intent to implement a moratorium. The regulation suggests this can be done either by using the electronic mail box (Commissioner@mdinsurance.state.md.us) or through the System for Electronic Rate and Form Filing (SERFF). The Administration would ask that carriers do both. As this is being done to accommodate the Administration, no filing fees will be required when this notice is given thru SERFF. When submitting the filing through SERFF, the filing should be submitted as a Rule and by Line of Business affected. The filing description must state; REQUEST TO ACTIVATE MORATORIUM, and reference the SERFF filing number under which the insurer's moratorium filing was originally filed Finally, once a moratorium is implemented by a carrier, it is to monitor same regularly and lift it at the first reasonable opportunity to do so. In no event, may a moratorium be continued for more than 24 hours after the termination of the last warning issued for any part of the State of Maryland or the entire State per COMAR 31.08.12.05. Any questions regarding these requirements should be directed to Dave Diehl, Chief Administrator, Property & Casualty Unit at ddiehl@mdinsurance.state.md.us or by calling 410-468-2320. Beth Sammis, Acting Insurance Commissioner By: Signature on file with original P. Randi Johnson, Associate Commissioner Property & Casualty