North Carolina

Deferral Order

On March 27, the North Carolina Commissioner of Insurance issued an order impacting debt collection agencies and debt buyers when collecting from North Carolina residents. ARM companies should proceed with caution.

  1. The Text of the Order

The order states that as a result of the March 25 Major Disaster Declaration for the state of North Carolina, the commissioner has activated certain powers provided him by North Carolina General Statute 58-2-46 which “provides for . . . debt deferrals . . .” You can read this as meaning a customer has no obligation to pay during the emergency period because the order has deferred payment. The deferral period “shall be 30 days from the last day the premium or debt payment may be made under the terms of the policy or contract.” Keep in mind that orders such as this are subject to extensions. Check the DOI website to determine if the period has been extended. The bulletin that accompanied the order states that entities subject to the order “are required to provide their customers affected in the disaster area specific relief of . . . payment . . . and other responsibilities.” North Carolina General Statute 58-2-46(2) states that once the commissioner issues an order declaring the statute effective, covered entities (which includes collection agencies and debt buyers) “shall give their customers . . . the option of deferring . . . debt payments that are due . . .” during the earlier of (1) the time period covered by the disaster declaration or (2) “the time period prior to the expiration of the Commissioner’s order declaring subdivisions (1) through (4) of this section effective . . .” Note that that statute further states “[t]his deferral period shall be 30 days from the last day the premium or debt payment may be made under the terms of the policy or contract.” The commissioner’s March 27 press release states that the order “will defer insurance premium payments,” and  “will require all companies to defer payments as required by the statute.” An amended order was issued on March 30 clarifying that the order remains in effect for 30 days from the date of issue of the order, that being April 26, 2020. Another Extended Order was issued April 21, 2020, extending the effective date to May 27, 2020.