Insurance Services Deemed Essential In Newsom's Order

SACRAMENTO, CA, March 20, 2020 -- Only hours after California Insurance Commissioner Ricardo Lara strongly encouraged all insurers and broker-agents to continue serving customers, Governor Gavin Newsom signed an order imposing “shelter-in-place” rules that require all non-essential businesses in California to close as a result of the Coronavirus pandemic. But insurance services are expressly cited as essential.

The Governor’s order incorporates by reference guidance provided by the Cybersecurity & Infrastructure Security Agency (CISA) within the US Department of Homeland Security. That agency expressly mentions “insurance services” as essential, on page 11 of its illustrations of “essential critical infrastructure workforce”:

Financial Services

Workers who are needed to process and maintain systems for processing financial transactions and services (e.g., payment, clearing, and settlement; wholesale funding; insurance services; and capital markets activities)

Workers who are needed to provide consumer access to banking and lending services, including ATMs, and to move currency and payments (e.g., armored cash carriers)

Workers who support financial operations, such as those staffing data and security operations centers.

Partially in response to the gubernatorial action, the Department of Insurance issued a second notice, earlier today, which even more strongly endorses the essential nature of the services agents and brokers provide.

“Commissioner Lara encourages insurers and other licensees of the Department to use their discretion to determine whether critical insurance functions can be performed during the pendency of the COVID-19 pandemic without jeopardizing the health and safety of their employees and other workers,” the March 20 notice states:.

For example, an insurer or agency may determine it is appropriate to close their doors to walk-in visitors, while remaining open for business and available to consumers through telephone calls, e-mail, or the Internet. In addition, many critical roles and core insurance functions may be performed remotely. Commissioner Lara also encourages all insurance businesses to continue to provide as many core insurance functions as possible during the COVID-19 pandemic while balancing the protection of the health or safety of their employees and other workers. Any insurance employee or worker continuing to perform core insurance functions during the pandemic should be encouraged to work remotely when possible, comply with social distancing requirements to the extent possible if in-person functions are necessary, and focus only on core insurance activities and functions. It is encouraged that in-person, non-mandatory activities deemed non-essential should be delayed, if possible, until the resumption of normal operations.

What this means is that agencies and brokerages are permitted, but not required, to remain open, but should consider all of the other safeguards the health authorities are suggesting, such as closing or restricting offices for walk-in or in-person interactions, permitting employees to work at home (where feasible), limiting the number of people in the office, undertaking appropriate cleaning protocols, providing hand sanitizer for employees to use frequently, etc….

Coronavirus Response Webinar

In order to help members respond to a variety of questions about their obligations and responsibilities in light of current conditions, IIABCal will host a free Coronavirus Response Webinar for members next Wednesday, March 25, from 10-11 am. It will be conducted by Kirstin Muller, an attorney with Hirschfeld Kraemer, LLC, a prominent labor and employment law firm.