In a Notice, dated October 7, 2020, Insurance Commissioner Ricardo Lara of the California Department of Insurance (the “Department”) requested that all health insurance and specialized health insurance companies provide their policyholders with a partial premium refund based on savings as a result of deferral of medical treatments and procedures during the COVID-19 pandemic. This request is similar to those issued by various insurance commissioners around the United States during 2020.
In the Notice, Commissioner Lara asked insurance companies to provide financial relief to individual consumers, families and small businesses during the COVID-19 pandemic, including requests that:
- All health insurance and specialized health insurance companies provide their policyholders with a partial premium refund no later than December 31, 2020; and
- These refunds be reflected in the November or December 2020 premium statements sent to policyholders or certificate holders, if refunds have not already been issued.
This request applies to all health insurance as defined in Insurance Code section 106(b) and specialized health insurance as defined in section 106(c). Insurance companies may comply with this premium refund request by providing a premium credit, reduction, return of premium or other appropriate premium adjustment. Policies of specialized health insurance (such as dental insurance) that have a maximum annual benefit may instead accomplish the requested refund by increasing the covered person’s 2021 maximum annual benefit by a percentage reflecting the period during which covered services were not available during 2020.
The Notice states:
Every insurance company subject to this Notice should report to the Department, if they have not already done so, all actions taken and/or contemplated future actions in response to or consistent with this Notice within 45 days of the date of the Notice.