N.Y. emergency regulation requires producers to notify customers impacted by COVID-19 pandemic of grace period extension
MassMutual customer letters outline process for 90-day extension program
The New York Department of Financial Services (NYDFS) has published Emergency Regulation 216 requiring producers to notify their New York clients that if they suffer a financial hardship as a result of COVID-19, they can contact MassMutual to request an extension of their life insurance premium grace period to 90 days. This extension applies to any premiums due while the emergency regulation is in effect. Customers will have 12 months to repay their premiums after an extension is approved.
To help producers meet the challenges of complying with the notification requirement, NYDFS has published guidance on its website outlining:
Note: If a life or annuity product client suffers a financial hardship due to COVID-19 and has contractual rights that can be exercised during the state of emergency, we will extend the timeframe to exercise those rights to 90 days, if requested by the client.
MassMutual will also notify customers in New York that the company may extend the premium-payment grace period upon request to 90 days for customers impacted by the COVID-19 pandemic, effective April 1. Premiums due but not paid during this 90-day period can be paid in equal monthly installments over the course of a next 12 months.
Note: various sources have confirmed that NYDFS expects producers to proactively notify customers of the extension options, in addition to any notifications made by the insurer.
The company will soon send customers this letter outlining the grace period and contacts for requesting more information and a grace-period extension. This letter may also be emailed by advisors. The company will send an additional letter to employers of Worksite group policy owners outlining MassMutual’s commitment to their employees during this uncertain time. Advisors with Worksite business may also email this employer letter.
New York is currently the only state requiring notifications described in this article. Unless otherwise informed, the previously outlined process remains in effect for customers of all other states, where MassMutual can only accept premium grace-period extension requests from individual clients.
MassMutual understands that many of our policyowners are being impacted by the far-reaching effects of the coronavirus (COVID-19), which could result in their inability to pay premiums on time.
To reduce the chance of policy lapse, we will now be able to approve client requests for extensions to normal premium-paying grace periods with life and disability insurance products to include Coverpath and Worksite. Clients can request up to a 60-day extension.
We strongly recommend that if a client expresses that their ability to pay their premium in a timely manner is hindered due to unforeseen and extraordinary circumstances beyond their control, you direct them to MassMutual.com. On this webpage, clients will find a prompt in the right margin that says: "If you are experiencing financial difficulty due to COVID-19 that may impact your ability to pay your premium, please contact our Service Center to discuss your options."
Due to the many factors that could influence a client's need to request a grace period and complying with certain state regulations, we are only able to honor requests directly from clients. They can reach us through our standard communication channels or following the instructions found on MassMutual.com.
During localized emergencies, increased flexibility existed where we could allow advisors to request on behalf of clients. With the complexities presented by the national scope of this pandemic, we will only be able to accept requests from individual clients. While not ideal in some situations, we appreciate your understanding as we work to support the needs of your clients in this unprecedented time.
Due to the variety and volume of questions we are fielding in this tumultuous time, it is even more important that we partner closely to ensure we maintain our ability to serve all producers and customers.
Use these options as often as possible, especially when requesting disbursements on behalf of your brokers’ clients or when providing disbursement forms. Using EFT/ACH disbursement options will help you provide a better experience for their customers, as they also navigate the new normal of social distancing and reduced travel.
While the option to use paper checks is still available, mailing may be a delayed due to limited staff. When requesting disbursements, consider the following options with clients:
When handling loan, partial, or full surrender disbursement requests for annuities, advise clients to receive disbursements via ACH/EFT for all transactions to avoid delays due to limited staffing resources.
When submitting the applicable disbursement form, be sure the ACH/EFT option is selected and a voided check is submitted if not already on file. Common disbursement forms include:
We will keep you updated on the latest developments as circumstances impacted by the coronavirus evolve. While uncertainty and disruption have reached new levels, we have managed through difficulties before. Thank you for your perseverance, resiliency, and calm as we work through this worldwide event together.