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Life Health > Health Insurance > Life Insurance Strategies

Insurance Companies Are Essential: States

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U.S. life insurers are saying one thing they need to keep life insurance and annuity functioning smoothly throughout the COVID-19 emergency is permission to keep their offices open.

At least some states have responded by exempting insurers from state “shelter in place” orders, and other efforts to slow the spread of the virus that causes COVID-19 by limiting how much people can interact with one another.

California Gov. Gavin Newsom has explicitly included insurers in the “essential critical infrastructure” list that goes along with his “stay at home” order.

Illinois Gov. J.B. Pritzker and New York Gov. Andrew Cuomo have included similar provisions in their states’ stay-at-home orders.


  • California “essential critical infrastructure” resources are available here.
  • Illinois “stay at home” resources are available here.
  • New York state “essential services” resources are available here.
  • An article about COVID-19-related special enrollment periods for individual major medical insurance is available here.

States have been implementing stay-at-home orders in an effort to slow quickly people get COVID-19, to give manufacturers enough time to equip doctors and hospitals with an adequate supply of masks, gloves, test kits, drugs, ventilators, and other medical supplies, and to keep a suddeny rush of critically ill patients from overwhelming the medical workforce.

The typical stay-at-home order has forced businesses such as hair salons, movie theaters and eat-in restaurant dining rooms to close but has let businesses such as grocery stores, takeout restaurants and drug stores to stay open.

The View From the ACLI

Susan Neely, the president of the American Council of Life Insurers, called Friday for all state and federal agencies to include similar provisions for insurance company operations in any restrictions on business operations.

Neely talked about life insurers’ need for inclusion on “essential infrastructure” lists in a presentation she made to members of the National Association of Insurance Commissioners (NAIC), through a teleconferencing system.

The NAIC — a group for state insurance regulators —  canceled its in-person spring meeting, which was supposed to have started Saturday, in Phoenix , due to the COVID-19 outbreak. The session held Friday was part of the effort to move the NAIC meeting onto telephone- and web-based systems.

Neely said U.S. life insurers have the financial strength and the operational strength to meet their obligations.

“Each and every day insurers work with policyholders who are asking for accommodations due to natural disasters or unforeseen developments, and the coronavirus pandemic is no exception,” Neely said.

But, to provide the best possible service for policyholders, life insurers do need help from state insurance regulators with getting exemptions from the stay-at-home orders, Neely Said.

“State insurance commissioners are our best advocates in making sure insurance is deemed essential,” Neely said, according to a prepared version of her remarks. “The [U.S.] Department of Homeland Security deems financial services institutions as essential to the well-being of our country, and any emergency directives in the states should reflect as such.”

Neely thanked California and New York for recognizing insurance as an essential service.

Health Insurers’ View

America’s Health insurance Plans and the Blue Cross Blue Shield Association have come together to make a similar plea on behalf of health insurers, and on behalf of all of the workers and vendors that help manage health plans.

In Department of Homeland Security guidance, “health plan workers are clearly included  as essential critical workers,” the groups have written in a letter sent to the National Governors Association. “Health insurance providers must be able to continue to provide many key functions.”

Those functions include managing telehealth systems as well as paying hospitals, physicians and other health care professionals, the groups write.

“Doctors and hospitals are under enormous financial stress right now and depend on our ability to maintain the flow of timely payments,” the groups write. “It is vitally important that our key service personnel and vendors can continue to service and provide information to consumers about their health insurance coverage at this challenging time.


In California, officials are “ordering all individuals living in the state of California to stay home or at their place of residence, except as needed to maintain continuity of operation of the federal critical infrastructure sectors.”

The California essential workers list includes “insurance companies” in the sector profile under the “Financial Services” heading.

The list describes the following types of workers as being exempt from stay-at-home requirements:

  • 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.


Pritzker’s stay-at-home order “prohibits things like visiting other people’s homes (except to provide care or supplies) and gatherings of more than 10 people and closes all nonessential establishments, including most retail, recreation and entertainment businesses,” officials say on the website presenting the order.

Illinois classifies “financial institutions” as essential, but it does not explicitly include insurance or insurers under that heading.

Instead, Illinois provides an exemption for “professional services” businesses, including “legal services, accounting services, insurance services, real estate services (including appraisal and title services).

Illinois also provides an exemption for the administrators of labor unions’ health and welfare funds.

New York State

In New York, Cuomo has issued an order closing most in-office operations of non-essential businesses, as of 8 p.m. March 22.

The order does not apply to the in-person operations of “essential businesses or entities, including any for profit or non-profit, regardless of the nature of the service, the function they perform, or its corporate or entity structure.”

Guidance lists “financial institutions” as essential.

The types of financial institutions classified as essential are banks, payroll services, accounting firms, financial markets support firms, and insurance organizations.

— Read Ways to Stress Test Your Business for Coronavirus Impacton ThinkAdvisor.

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© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.