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COVID-19: Claim-handling deadlines and premium payments in Texas

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Commissioner’s Bulletin B-0007-20 (March 23, 2020)

Governor Greg Abbott suspended certain claim-handling deadlines imposed by law. Additionally, the Commissioner of Insurance has determined that the COVID-19 pandemic is a disaster under Texas Insurance Code Section 542.059(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.

Taken together, the Governor’s suspension and the Commissioner’s declaration have the effect of extending claim-handling deadlines imposed by the state’s prompt payment laws for an additional 15 days to help carriers respond to the COVID-19 outbreak. This extension will be in effect until the Governor’s suspension and Commissioner’s declaration are lifted.

The Department of Insurance expects all carriers to work with policyholders who may experience financial hardships due to the outbreak and encourages them to use grace periods for payments, 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 a carrier’s written agreement with a policyholder, unless a policyholder notifies a carrier of a specific hardship. This should be weighed against the potential disruption to a carrier’s business model or the inconvenience caused to the policyholder by multiple payments. It is the Department’s expectation that carriers will work directly with policyholders to resolve issues and minimize the effects of any penalties or additional charges. 

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