The Texas Department of Insurance reports that insurance claim-handling deadlines have been extended for 15 days as of March 20 to help insurers respond to the COVID-19 outbreak. The extension was implemented after Gov. Greg Abbott suspended certain provisions of the state’s prompt pay laws and Insurance Commissioner Kent Sullivan declared the COVID-19 pandemic a disaster under Texas Insurance Code Section 542.059(b).
Despite the extension, the Texas Department of Insurance said it expects insurers to work with policyholders who may experience financial hardships due to the COVID-19 outbreak. The department also said it encourages insurers to use grace periods for payments, temporary suspension of premium payments, payment plans, and other actions to allow continuing insurance coverage as appropriate. TDI additionally said it would work with carriers to minimize the regulatory effects of an insurer’s actions to provide policyholder relief, specifically for financial review requirements. The term “suspension” is not intended to mean the forgiveness of the premium, TDI said. This extension will be in effect until the governor’s suspension and the commissioner’s declaration are lifted.