On March 20, 2020, Governor Greg Abbott declared that the COVID-19 pandemic is a disaster under Texas Insurance Code Section S42.059(b). This declaration is necessary due to the significant disruption to policyholders, carriers, and their staff caused by this disaster, in particular the impact and volume of claims expected to be filed as a result of COVID-19.
The declarations of both Governor Abbott and Insurance Commissioner Kent Sullivan have resulted in an extension of claim-handling deadlines imposed by the state’s prompt payment laws for an additional 15 days. The extension will be in effect until the Governor’s suspension and Commissioner’s declaration are lifted.
Carriers must continue to:
- Promptly identify, evaluate, and resolve claims
- Promptly knowledge receipt of a claim
- Promptly make appropriate assignments for the investigation of a claim
As it relates to premium payments, the Texas Department of Insurance (TDI) expects all carriers to work with policyholders who experience financial hardships due to the outbreak and encourages them to use grace periods for payment, temporary suspension of premium payments (which does not mean forgiveness of the premium), payment plans and other actions that allow continuing insurance coverage as appropriate. Automatic bank drafts for premium payments may continue according to the carrier’s written agreement with the policy holder, unless a policyholder notifies a carrier of a specific hardship.
It is TDI’s expectation that carriers will work directly with policyholders to resolve issues and minimize the effects of any penalties or additional charges.
Should you have any questions, please contact a member of your BCH service team.
