Sep 28, 2020

Bill to codify protections for policy cancellations to be sent to governor

Legislation that would codify the recently expired moratorium that prevented the cancellation of certain policies unanimously passed the state Assembly on Sept. 24.

S-2354, sponsored by Sen. Linda Greenstein, D-14, would empower the commissioner of the Department of Banking and Insurance to issue a bulletin to prevent the canceling or nonrenewal, for nonpayment, of an insurance policy and/or premium finance agreement for a period of at least 60 days.

According to the bill, this action could only be taken if a public health emergency or state of emergency is declared. In addition, these protections would only apply if the policyholder is an individual or is a business with 50 or fewer employees. Previously, the bill was amended to provide that insurers will be permitted to recoup the cost of nonpayment of premiums by a policyholder, provided that any recoupment is subject to directions of the commissioner.

If enacted, the legislation would go into effect immediately, and be retroactive to March 1, 2020. The legislation passed the state Senate (38-0) in April. It will go to Gov. Phil Murphy for his consideration.