Coronavirus Pandemic: Property and Casualty Coverage

STATE OF MAINE DEPARTMENT OF PROFESSIONAL AND FINANCIAL REGULATION BUREAU OF INSURANCE 34 STATE HOUSE STATION AUGUSTA, MAINE 04333-0034 Janet T. Mills Governor Eric A. Cioppa Superintendent PRINTED ON RECYCLED PAPER O F F IC E S L O C A T ED A T 76 N O R T H ER N AV EN U E, G A R D IN ER, M AI N E 04345 www.maine.gov/insurance Phone: (207) 624-8475 TTY: Please call Maine Relay 711 Consumer Assistance: 1-800-300-5000 Fax (207) 624-8599 Bulletin 443 Coronavirus Pandemic: Property and Casualty Coverage The Superintendent directs this bulletin to the attention of property casualty insurers, producers with property or casualty authority, surplus lines insurers, and surplus lines brokers. On March 12, 2020, Governor Mills declared a state of insurance emergency in Maine because of the coronavirus pandemic, known as COVID-19, and authorized the Superintendent “to make, amend, or rescind such rules and regulations governing the business of health insurance carriers as the Superintendent deems expedient in order to adopt and maintain sound methods of protecting the interests of such insurers, insureds, beneficiaries and the public” during the emergency. That day, the Superintendent issued Bulletin 442, “Emergency Measures Responding to the Coronavirus Pandemic.” Bulletin 442 pointed out that the pandemic will affect various types of insurance in addition to health coverage. It has come to the Superintendent’s attention that some insurers have notified their policyholders that their policies will not cover COVID-19 risks. This would be acceptable if the policy at issue clearly and unambiguously excludes these risks and the insurer is merely reminding the policyholder of the exclusion. However, no admitted or surplus lines insurer may use COVID- 19 as a reason to attempt to narrow or cancel the coverage of a policy already in effect. Any such attempt will be considered a violation of Maine’s Trade Practices and Frauds law. The emerging threat of COVID-19 may not be treated as a “substantial change in the risk” justifying policy termination or unilateral policy modification when the exposure to COVID-19 is coincidental to risks that the policy already covers. Anyone with questions about this should contact the Bureau’s Property & Casualty Division. April 7, 2020 Eric A. Cioppa Superintendent of Insurance NOTE: This Bulletin is intended solely for informational purposes. It is not intended to set forth legal rights, duties, or privileges, nor is it intended to provide legal advice. Readers should consult applicable statutes and rules and contact the Bureau of Insurance if additional information is needed.