PHIL MURPHY
Governor
SHEILA OLIVER
Lt. Governor
State of New Jersey
DEPARTMENT OF BANKING AND INSURANCE
OFFICE OF THE COMMISSIONER
PO BOX 325
TRENTON, NJ 08625-0325
TEL (609) 633-7667
MARLENE CARIDE
Commissioner
Visit us on the Web at dobi.nj.gov
New Jersey is an Equal Opportunity Employer • Printed on Recycled Paper and Recyclable
BULLETIN NO. 20-16
TO: ALL INSURERS AUTHORIZED OR ADMITTED TO TRANSACT LIFE
INSURANCE IN NEW JERSEY, LICENSED INSURANCE PRODUCERS,
INSUREDS, AND OTHER INTERESTED PARTIES
FROM: MARLENE CARIDE, COMMISSIONER
RE: 90-DAY GRACE PERIOD FOR LIFE INSURANCE PREMIUM
PAYMENTS DUE TO THE DISRUPTION CAUSED BY COVID-19
On March 9, 2020, Governor Phil Murphy declared a state of emergency and public health
emergency through the issuance of Exec. Order No. 103 (March 21, 2020) ___ N.J.R. ___ (“EO
103”) to contain the spread of the Coronavirus (“COVID-19”) pandemic. Governor Murphy later
directed New Jersey residents to remain in their homes unless leaving was essential through the
issuance of Exec. Order No. 107 (March 21, 2020) ___ N.J.R. ___ (“EO 107”). These Executive
Orders were issued to contain the spread of the COVID-19 pandemic. On April 9, 2020, Governor
Murphy Issued Exec. Order No. 123 __ N.J.R. __ (“EO 123”). EO 123 directed insurance
companies to refrain from cancelling any policy or contract for nonpayment for a period of time
as directed by the Commissioner of the Department of Banking and Insurance (“Commissioner”);
to exercise appropriate forbearances on collection documentation; to amortize any unpaid
payments over the remainder of the policy term or a period of up to 12 months, as appropriate, as
directed by the Commissioner; and to refrain from seeking recoupment of any unpaid claims paid
during the emergency grace period. The Department of Banking and Insurance (“Department”) is
issuing this Bulletin to direct all life carriers to extend a grace period for the payment of premiums
to their insureds as set forth herein.
Since the outbreak of the respiratory disease COVID-19, individuals and businesses in the
State of New Jersey have been negatively impacted in a variety of ways. For example, small
businesses in the travel, entertainment, hospitality, and food service industries, have been
adversely impacted by significant drops in business activities resulting, for some entities, in
dramatic declines in revenue. Employees of these industries will be impacted, which may include
the failure to be paid their regular salary or receive reimbursements when normally due. This, in
turn, can adversely affect the ability of these individuals or businesses to make payments for
obligations, such as insurance coverage, when due.
Currently, traditional life insurance policies include a grace period of not less than 30 days,
and in certain circumstances for account value life insurance policies not less than 60 days. In
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response to the disruption caused by COVID-19, the Department is directing all licensed life
insurers to provide their policyholders or certificate holders who may be experiencing a financial
hardship due to COVID-19 with at least a 90-day grace period to pay life insurance and annuity
contracts premiums so that insurance policies or contracts are not cancelled for nonpayment of
premium during this challenging time due to circumstances beyond the control of the insured. A
policyholder may elect this 90-day emergency grace period to begin retroactively on April 1, 2020
or opt for the grace period to begin on May 1, 2020. During this extended grace period, life
insurance companies cannot cancel any insurance policy for nonpayment of premium.
Insurers are directed to:
• Waive late payment fees otherwise due, including any interest permitted pursuant to
N.J.S.A.17B:25-3, and not report late payments to credit rating agencies, during the 90-
day period;
• Allow premiums due but not paid during the 90-day period to be paid over the course of
the following year in up to 12 equal installments, except that an insurer may permit a longer
repayment period; and
• Extend to 90 days the period to exercise policyholder and contract holder rights and
benefits under life insurance and annuity contracts.
The extended grace periods described above shall apply to policyholders that were in good
standing with their insurance carrier on March 1, 2020. This grace period is intended to be applied
to premiums due after the initial premium has been made to secure coverage. It is not intended to
change the terms of the issued policy or contract or be considered a forgiveness of the premium.
Rather, it is intended that the insurer grant the policyholder or certificate holder an extended grace
period for the payment of premium due without penalty or interest.
Insurers are further directed to, in addition to posting information on their website, provide
each policyholder with an easily readable written description of the terms of the extended grace
period offered pursuant to this guidance, which shall be submitted to the Department through the
System for Electronic Rates and Forms Filing (“SERFF”) as an informational filing.
In addition, to eliminate the need for in person payment methods, in order to protect the
safety of workers and customers, all agents, brokers, and other licensees who accept premium
payments on behalf of insurers must take steps to ensure that customers able to make payments
have the ability to make prompt insurance payments through alternate methods of payment, such
as online payments.
The Department will monitor events as they develop to determine if this emergency grace
period must be extended.
April 10, 2020
Date Marlene Caride
Commissioner
Jd Life ins prem grace pd Bulletin/COVID 19
