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The Arkansas Insurance Department issued a directive to property and casualty carriers issuing policies containing “occupancy” requirements in their underwriting standards that could adversely impact insurance coverage for members of the armed services who are deployed outside of the state. With many homeowner and personal property policies containing exclusions for vacant or unoccupied property, the potential exists for armed services personnel to be penalized in the underwriting or claims process for situations beyond their control, the department said.

Department Directive 1A-2004, entitled “Cancellations, Nonrenewals and Discriminatory Underwriting Practices for Property and Casualty Carriers,” states in paragraph 6 of Directive 1A-2004: “6. Insurers should not cancel or non-renew any property and casualty insurance policy solely because the policyholder (a) has attained the age of 65 or older; (b) is physically impaired, provided the automobile is equipped with compensating devices; or (c) is a member on active duty in the Armed Forces.” Ark. Code Ann. 搂 23-66-206(14); 50 App. U.S.C.A. 搂 501, et seq. (emphasis added).

“It is important that members of the Armed Services who enlist in, or return from, active duty are not penalized by their insurance companies for the period of time in which they have put themselves in harm’s way for the service of our country,” stated Insurance Commissioner Julie Benafield Bowman in the advisory. “As Insurance Commissioner, I expect that underwriting or rating requirements related to occupancy will be waived for members of our Armed Services if the insured is deployed outside of this State due to military service. These men and women who have risked their lives in service to our country should not be penalized for their services.”

The department said it will interpret a cancellation or refusal to underwrite property insurance for the dwelling of an insured in the armed services due to a lack of occupancy as a violation of paragraph 6 of Directive 1A-2004 if the insured is deployed outside of Arkansas due to military service.

Insurers were directed to review their underwriting and claims procedures. The department recommended that occupancy requirements for deployed armed services personnel be waived.

Source: Arkansas Insurance Department

Topics Carriers Underwriting Property Property Casualty