IIABCal Calls On Commissioner To Declare Insurance Services “Essential”

PLEASANTON, CA, March 18, 2020 - IIABCal on Tuesday asked California Insurance Commissioner Ricardo Lara to declare that insurance agencies and brokerages are “essential businesses” in response to “shelter-in-place” policies that are now requiring non-essential businesses to close, in response to the Coronavirus pandemic. 

In an action with no recent precedent, San Francisco Bay Area counties issued a coordinated order on Monday (3/16/20) requiring all residents to “shelter-in-place,” and all “non-essential” businesses to cease in-person operations.  Businesses exempted from that order as “essential,” include:

  • Businesses that supply products needed for people to work from home;
  • Businesses that supply other essential businesses with the support or supplies necessary to operate; and
  • Professional services, such as legal or accounting services, when necessary to assist in compliance with legally mandated activities.”

In a request sent Tuesday (3/17/20), IIABCal General Counsel Steve Young asked CDI General Counsel Ken Schnoll for assistance from the Department of Insurance in declaring that the business of insurance, including services provided by agencies and brokerages, constitute “essential businesses.” 

“We believe insurance agencies and brokerages fall squarely within each of the three categories of essential businesses mentioned above,” Young said.  “Brokers/Agents provide a number of essential professional services to individual and commercial consumers, including issuance of certificates-of-insurance required by banks, lenders, and lien holders; meeting bonding requirements established by state, federal, and other governmental bodies; and fulfilling contractual obligations to policyholders and clients in the execution of mandated insurance requirements from state, federal, and local authorities for certain types of coverage, e.g. workers compensation.” 

Young noted that the Commonwealth of Pennsylvania has issued a health order that is similar to the order issued by the California counties, urging non-essential businesses to close.  Its Department of Insurance has declared the business of insurance to be essential, although it urged carriers and agencies to consider remaining open for business without accepting walk-in visitors. 

The Pennsylvania Insurance Commissioner has declared:   "The Administration has strongly urged non-essential businesses to close during mitigation periods to protect employees, customers, and suppliers. While the business of insurance is essential, many roles and functions of insurance offices may be administered remotely or are otherwise non-essential. We encourage carriers and agencies to use their discretion in determining essential functions for essential employees. For example, an agency may determine it is appropriate to close to walk-in visitors, while remaining open for business, and available to consumers, through calls and e-mail."