Client Alert: Insurance, Construction & Deadlines
On March 29, 2020, Gov. Cuomo issued Executive Order 202.13 to provide further relief to individuals and small businesses coping with the COVID-9 pandemic health emergency, to clarify certain aspects of prior Executive Orders, and to temporarily modify certain existing laws. We provide highlights here of those portions of EO 202.13 that may be of particular interest to our clients.
Extension of the grace period for payment of insurance premiums
EO 202.13 modifies the NY Insurance Law to extend the grace period for the payment of premiums and fees for those individuals and small businesses (with fewer than 100 employees) facing financial hardship. Specifically, it imposes a “moratorium” on “an insurer cancelling, non-renewing, or conditionally renewing any insurance policy issued to an individual or small business…for a period of 60 days, for any policyholder…facing financial hardship as a result of the COVID-19 pandemic.” The moratorium also applies to group insurance policies and those who are insured under them.
In furtherance of EO 202.13, on March 30 the NYS Department of Financial Services (DFS) announced adoption of an emergency regulation giving consumers experiencing COVID-19 financial hardship 90 days to pay life insurance premiums. The DFS regulation requires life insurers to waive late payment fees, to not report late payments to credit rating agencies, and to allow premiums due but not paid during the 90-day period to be paid over the course of the following year in 12 equal monthly installments. A full description of the DFS emergency regulation and guidance can be found here. 2020.13 also gives life insurance policyholders 90 days to exercise rights or benefits under a life insurance policy or annuity contract if they are unable to timely to exercise their rights or benefits as a result of the COVID-19 pandemic.
Clarification of “essential” construction activity
In EO 202.6, Gov. Cuomo exempted a variety of “essential businesses”, including various broadly-defined construction activities, from the 100% in-person workforce reduction mandate set forth in that Executive Order. EO 202.13 modifies EO 202.6 to make it clear that “only certain construction is considered exempt from the in-person restrictions as of March 28, 2020.” 202.13 authorizes the Empire State Development Corporation to determine which construction projects shall be essential and thereby exempt from the in-person workforce prohibition. The EDC has accordingly updated its guidance; a complete list of exempt “essential” businesses, including a more narrowly-defined list of exempt construction activities, can be found here. The EDC’s guidance makes it clear that “all non-essential construction must shut down.” Essential construction may continue, including work on “roads, bridges, transit facilities, utilities, hospitals or health care facilities, affordable housing, and homeless shelters.” Note however that at every site social distancing must be maintained, and that sites that cannot maintain distance and safety best practices must close. Enforcement will be provided by the state in coordination with city/local governments, and may include fines of up to $10,000 per violation.
Alignment of expiration dates for restrictions on and
closures of private and public businesses and places of public accommodation
EO 202.13 also aligns the expiration dates contained in prior Executive Orders that created restrictions on or provided for closures of private and public businesses and places of public accommodation. 202.13 makes it clear that “all such Executive Orders shall be continued, provided that the expiration dates of such Executive Orders shall be aligned, such that all in-person business restrictions will be effective until 11:59 p.m. on April 15, 2020, unless later extended by future Executive Orders.”