Executive Orders and Regulations for New York Insurers
A recent Executive Order issued by Governor Cuomo, together with recent amendments to the insurance and banking regulations issued by the New York State Department of Financial Services (NYDFS), has extended grace periods as well as give our clients other rights under your life insurance policy or annuity contract. Please be aware that these rights are currently in effect but are temporary, though they may be extended further. The extended grace periods can only be offered if clients can demonstrate financial hardship as a result of the COVID-19 pandemic.
Insurance Payments – Grace Period
If you demonstrate financial hardship as a result of the COVID-19 pandemic, your insurer must extend to 90 days the applicable grace period for the payment of premiums and fees under your life insurance policy or annuity contract. In addition, your insurer may not impose any late fees relating to the premium payment or report them to a credit reporting agency or a debt collection agency.
Catching up on Overdue Insurance Payments
The regulations also require your insurer to permit you to pay the overdue premium over a 12-month period if you did not make a timely premium payment and can still demonstrate financial hardship as a result of the COVID-19 pandemic. This also applies if the insurer sent them a nonpayment cancellation notice prior to March 20, 2020.
How to Demonstrate Financial Hardship
The CARES Act additionally provides new relief provisions pertaining to retirement accounts. To name a few provisions that can assist those with retirement plans and RMDs:
If you are unable to make a timely premium payment, you may submit to your insurer a statement, which is not required to be notarized, that you swear or affirm in writing under penalty or perjury that you are experiencing financial hardship as a result of the COVID-19 pandemic.
Please be advised that while producers are no longer required to send notification via U.S. mail, the requirement to send notifications electronically regarding these rights and the extended grace periods must still be followed.
These grace periods and rights are currently in effect but are temporary, though they may be extended further. Please check the NYDFS’ website for updates.
Also, please be advised that if you hold a life insurance policy or an annuity contract issued by a New York State Department of Financial Services regulated insurer, you may be entitled to certain deferrals of insurance premium payments. If you have any questions regarding your rights under the Executive Order or regulations, please contact your insurer, broker, or premium finance agency.
ABOUT SGROI FINANCIAL
Sgroi Financial is a full service, independent financial planning firm proudly serving the Western New York area since 1971. We offer services that will help you achieve your financial goals including retirement planning, investment management, estate planning, college planning and insurance. We help individuals, families, retirees, working adults, young adults and business owners.
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Securities offered through Cadaret, Grant & Co., Inc., member FINRA/SIPC. Advisory services offered through Sgroi Wealth Advisory Group LLC, an SEC Registered Investment Advisor. Sgroi Wealth Advisory Group LLC, Sgroi Financial LLC, and Cadaret, Grant & Co., Inc. are separate entities.
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