(Reuters) – California’s Insurance Commissioner on Monday ordered insurers to return premiums to consumers and businesses, adding to pressure on insurers to do more to mitigate the financial strain on customers caused by the novel coronavirus crisis.
Insurance Commissioner Ricardo Lara said premiums paid for the months of March, April and potentially May, should be returned for six insurance lines – passenger and commercial auto, workers’ compensation, commercial multi-peril, commercial liability and medical malpractice.
The order also includes other insurance lines facing the risk of loss as a result of the pandemic.
Major U.S. insurers are already offering credit to auto and motorcycle policyholders following a decline in driving, as most Americans stay at home under widespread orders to help contain the spread of the novel coronavirus.
“With Californians driving fewer miles and many businesses closed due to the COVID-19 emergency, consumers need relief from premiums that no longer reflect their present-day risk of accident or loss,” Lara said http://www.insurance.ca.gov/0400-news/0100-press-releases/2020/release038-2020.cfm.
“Today’s mandatory action will put money back in people’s pockets when they need it most.”
As part of the order, insurance companies are required to provide a premium credit, cut, return of premium, or other “appropriate premium adjustments” as soon as possible, and no later than August.
Insurers collect $310 billion in premiums annually in California, according to the state’s insurance department, the largest consumer protection agency in California.
(Reporting by Noor Zainab Hussain in Bengaluru; Editing by Shinjini Ganguli)
