News and publications
Nov 9, 2012
N.J. issues directive on forbearance of cancellation activity, payment methods
New Jersey Gov. Chris Christie released Executive Order 107, which makes a number of important Superstorm Sandy-related declarations.
The executive order makes the following declarations:
- Hurricane deductibles. The imposition of hurricane deductibles shall not be allowed. The order recognizes the National Weather Services statement that the storm was a post-tropical storm, and not a hurricane, an important distinction, as such deductibles may only be imposed in the event a storm is a hurricane named by the National Weather Service or its successor from which sustained hurricane force winds of 74 miles per hour or greater have been measured in New Jersey by the National Weather Service. The order states "it shall be a violation of N.J.A.C. 11:2-42.7 for any insurer to apply a mandatory or optional hurricane deductible to the payment of claims for property damage attributable to Sandy."
- Cancellations. Regulated entities including insurers are to exercise appropriate forbearance with regard to policy cancellations, premium collection and other regulatory issues. The order states that all department licensees shall "take into consideration the difficulties related to Sandy that all citizens of the state continue to suffer and, therefore, exercise appropriate forbearances on collection, cancellation, documentation and other regulatory requirements, including, but not limited to:
- notifications of hospital admissions;
- due dates for claim filings, premium and loan payments and late fees;
- prior authorization requirements; and
- limitations on prescription refills."
- Claim payments. Insurers are permitted to make first- and third-party claims payments by an expanded number of methods, including prepaid debit cards, electronic transfer or other comparable alternate payment method, subject to some restrictions. The order allows the use of these expanded alternative methods, only if: "the claimant agrees to receive a claim payment by an alternate payment method; if the alternate payment method is not subject to any fees that would result in the insured receiving less than the full amount due; if the insured is permitted, at any time, to convert any balance into cash; and if the claimant is notified of applicable terms and conditions."
- The order grants the commissioner of the Department of Banking and Insurance the power to take all necessary steps to effectuate the order, which took effect immediately upon being published.
We suggest you check PIAs Storm Info Central tool kit often for the updates, information and materials you can use and share with your clients. A mobile version also is available at: http://m.pia.org/storm/.
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