TDI Extends Claims-Handling Prompt Payment Deadlines In Response To COVID-19

Amid the chaos surrounding the COVID-19 outbreak, the Texas Department of Insurance has issued a Commissioner’s Bulletin extending certain claim-handling prompt payment deadlines for property carriers handling claims in Texas. The Texas Prompt Payment of Claims Act allows for a 15-day extension of claim-handling deadlines for property carriers in the event of a major national disaster, as defined by the Texas Commissioner of Insurance. In the wake of the Commissioner’s determination that the COVID-19 pandemic is a national disaster, Commissioner’s Bulletin # B-0007-20 establishes extended deadlines for claim-handling procedures for property carriers.

The Bulletin extends all deadlines promulgated by the Texas Prompt Payment of Claims Act by 15 days, however carriers are still required to act promptly with respect to identifying, evaluating, and resolving claims, acknowledging claims, and making appropriate assignments for the investigation of claims. A chart reflecting impacted deadlines is provided below. The extended deadlines will remain in place and in effect until the Commissioner’s declaration is lifted.

Bulletin # B-0007-20 was issued in part due to the impact and volume of claims expected to be filed as a result of COVID-19. While the types of claims property carriers will receive in the coming days will of course vary, claims related directly to Coronavirus and the resulting governmental travel restriction will leave many asking questions. Zelle has authored a paper on Commercial Property Insurance Coverage and Coronavirus to assist in answering some of those questions. Of course, the key to responding properly to such claims is a careful analysis of the specific policy terms and conditions at issue, informed by experience and relevant legal authority.

REVISED TEXAS INSURANCE CODE DEADLINES
PURSUANT TO COMMISSIONER’S BULLETIN #B-0007-20

Texas Insurance Code Section Deadline Original Deadline New Deadline

§ 542.055(a)

Non-Surplus Lines Insurers 

  • Acknowledge receipt of the claim
  • Commence any investigation of the claim; and 
  • Request from the claimant all items, statements, and forms that the insurer reasonably believes, at that time, will be required from the claimant. 

15 days after receipt of claim.

 30 days after receipt of claim.

§ 542.055(a)

Surplus Lines Insurers

  • Acknowledge receipt of the claim
  • Commence any investigation of the claim; and 
  • Request from the claimant all items, statements, and forms that the insurer reasonably believes, at that time, will be required from the claimant. 

30 days after receipt of claim.

45 days after receipt of claim.

§ 542.056(a)

All Property Insurers

  • Notify insured of the acceptance or rejection of claim.

15 days after the date the insurer receives all items, statements, and forms required by the insurer to secure final proof of loss. 30 days after the date the insurer receives all items, statements, and forms required by the insurer to secure final proof of loss.

§ 542.056(d)

All Property Insurers

  • If unable to accept or reject claim within period specified by TIC §542.056(a) or (b) and additional time is requested, time to notify insured of acceptance or rejection of the claim.

45 days after the date insurer requests additional time.   

60 days after the date insurer requests additional time.   

§ 542.057(a)

All Property Insurers

  • Payment of claim.
5 days after insurer notifies claimant that payment will be issued.
20 days after insurer notifies claimant that payment will be issued.

Posted by Bennett Moss