DFS Circular Letters Encourage Leniency on Insureds and Extend Continuing Education Licensing Deadlines

The New York State Department of Financial Services (“DFS”) has issued several Circular Letters and industry guidance over the past month due to COVID-19.  While considerable information is geared towards health insurances and telemedicine, two Circular Letters in particular are relevant to all insurance producers.   

Circular Letter No. 7 (2020) dated, March 19, 2020, encourages DFS licensees to help alleviate the financial impact caused by COVID-19 and to be flexible with insureds who are unable to make timely payments of premium or fees.  Some recommendations include offering payment accommodations, such as allowing insureds to defer payments at no cost, extending payment due dates, or waiving late or reinstatement fees.  DFS encourages licensees to help insureds avoid non-renewal of insurance policies.  DFS also suggests allowing for flexibility regarding conditions that trigger benefits under life insurance policies or annuity contracts, which are typically strictly enforced.   

Just five days after Circular Letter No. 7, DFS issued Circular Letter No. 9, on March 24, 2020, to provide producers with an extension of time to satisfy their licensing requirements.  New York State Insurance Law § 2132 sets forth licensees continuing education (“CE”) requirements in connection with license renewals.  Given COVID-19, DFS understands that although there are online options available, it may be difficult for certain producers to obtain the required number of CE credits in advance of their license expiration dates.  Thus, as a temporary accommodation, DFS has suspended the expiration of licenses for all individual producers for 60 days (through late May 2020) and is waiving any late fees during this period. If a license is due to expire during this period and the producer does not submit a license renewal application and complete all required CE credits, according to Circular Letter No. 9, the license will lapse.  Notably, DFS has also suspended the requirement that a monitor be present to complete producer CE and pre-licensing course exams during this 60-day period.

With this ever-changing landscape, it is likely that DFS will continue to issue additional industry letters and guidance and it may be necessary to further extend this 60-day grace period among other accommodations to producers and to insureds.

This article is for information purposes only and is not intended to give legal advice. For more information about insurance regulatory or other legal issues, please contact the author at (212)941.5025 or gabay@gabaybowler.com.