September is National Preparedness Month so it is timely to help members be prepared for disasters in North Carolina by shedding some light on the flurry of bulletins issued by the Commissioner of Insurance (COI) before, during and after a disaster event. IIANC frequently receives requests for clarification on these bulletins such as what triggers them and what specifically does it mean for North Carolina consumers? Understanding the purpose and scope of the most common disaster-related bulletins will better equip agencies to handle questions from their clients. In addition, many agencies located in the disaster area need to understand these bulletins for their own personal benefit and that of their staff.
Generally speaking in layman’s terms, the overall purpose of the bulletins issued by the COI is to provide safeguards to ensure North Carolina insureds affected by a disaster do not suffer any additional unnecessary hardship. These safeguards address problems North Carolina insureds may face due to circumstances that make it difficult for them to take normal actions required by insurance policy provisions or procedures. They help provide peace of mind to disaster victims by making sure that they do not lose important insurance coverage during the time that they need it most. Additionally, they serve to expedite the recovery process for disaster-impacted insureds.
Prior the start of hurricane season, the COI issues two bulletins to outline procedures P&C insurance companies will need to follow if a catastrophic event were to occur in North Carolina. There is a template included for an identification badge that adjusters and motor vehicle damage appraisers must carry to get access to a declared disaster area. The COI may also permit experienced adjusters and appraisers who are licensed in another state (if the state requires a license), to act as an adjuster or appraiser without a North Carolina license only for an insurance company authorized to do business in this state, for emergency adjustment work, for a period to be determined by the COI.
Leading up to a potential disaster event, when a State of Emergency is declared in North Carolina by the Governor or the President of the United States, the COI has the statutory authority to issue an order to direct health benefit plans and stand-alone prescription medication plans to implement procedures to authorize extra prescription medications by waiving “refill too soon” restrictions to pharmacies. The procedure allows a covered person residing in one of the counties included in the State of Emergency order to request one refill on a valid prescription or one replacement of a recently filled prescription within twenty-nine (29) days of issuance of the order. The COI has this same statutory authority to issue an order when a State of Disaster is declared. For either a State of Emergency or Disaster, the COI may also extend the time period in the initial order by 30 day increments.
During or after a disaster event, when a State of Disaster is declared in North Carolina, the COI has the statutory authority to issue an order to activate the State of Disaster provisions outlined in North Carolina General Statute §58-2-46 for only the North Carolina counties included in the Disaster Proclamation and the residents therein. Oftentimes, this Bulletin is amended one or more times as new counties are included in the Disaster Proclamation. This is probably the bulletin that causes the most confusion as it puts some very important consumer protections in place that impact premium payments, cancellations, non-renewals, claim filing, and many other policy requirements:
1) For policies insuring real property and contents located within counties included in the COI’s order, there is a stay of the proof of loss for a time period not earlier than the expiration of the disaster proclamation, unless extended by the COI.
2) Insurance companies shall give customers residing within these counties the option of deferring premium payments due during the time period covered by the disaster proclamation. The deferral period shall be thirty (30) days from the last day the premium payment may be made under the policy.
3) This 30 day deferral period applies to any statute, rule, or other policy provision that imposes a time limit on an insurer, an insured, claimant, or customer to perform any act during the time period covered by the order related to individuals that reside in these counties such as cancellation or non-renewal provisions.
4) This 30 day deferral period also applies to any time limitations imposed on insurers under the terms of a policy or contract or provisions of law related to individuals who reside within these counties.
The COI may also issue an order to insurance companies for the activation of NCDOI’s Disaster Mediation Program for the counties included in the Disaster Proclamation. The purpose is to establish a non-adversarial program to facilitate effective, fair, and timely resolution of insurance claims as a result of a disaster. Companies are required to provide notice of this mediation program to first party claimants within sixty (60) days of this type of order.
All of the NCDOI Bulletins can be located on the Department’s website for Legislative Services.