Understanding the California Premium Refund Order for COVID-19 and the Report Due June 12, 2020
May 12, 2020
Written By Perr&Knight
Reading Time: 2minutes
On April 13, 2020, the California Department of Insurance (“CDI”) issued a Bulletin ordering the refund of premium to drivers and businesses affected by the COVID-19 emergency. Based on our discussions with the CDI, they are expecting a report by June 12 from every company with California policyholders in any of the lines of business listed in the Bulletin.
With millions of dollars being returned to policyholders, it is important to have a thorough understanding of the CDI’s premium refund order. Perr&Knight has had multiple discussions with the CDI to gain a better understanding of the requirements, which will allow us to provide greater insight to companies on how to respond to the Bulletin. Our actuaries are assisting the insurance industry with the following:
Estimating COVID-19 Impact on Losses: We can estimate the impact COVID-19 is having on a company’s losses. At this point, there is often limited data available, which makes estimating the impact difficult. Although frequencies may be decreasing, some lines such as personal and commercial auto may be seeing increasing severities due other factors, such as an increase in speeding due to less traffic congestion. It is important to have a clear understanding of all risk factors that are changing. Our actuaries are actively reviewing the trends in the marketplace for multiple carriers.
Calculating the Premium Refund: There a number of factors that go into calculating the premium refund including the CDI’s expectations on how the refund should be calculated. We are helping companies take all these under consideration in determining the amount that will be returned to policyholders.
Preparing the COVID-19 Report: Perr&Knight is assisting companies in preparing and submitting a COVID-19 Report to the CDI that meets the requirements in the Bulletin. This includes determining whether an applicable product line is subject to the Bulletin and requires a response.
If you need assistance with responding to the California premium refund order or have any questions on the Bulletin, please let us know.
Chief Sales Officer