COVID-19: Commercial premium adjustments and midterm premium audits

Home Bulletins Commissioner bulletins – 2020 B-0020-20 April 15, 2020 To:   All insurance companies, corporations, exchanges, mutuals, county mutuals, reciprocals, associations, Lloyd’s plans, other insurers writing property and casualty insurance in Texas, including workers’ compensation insurance; agents and representatives; premium finance companies; and other relevant parties Re:   COVID-19: Commercial premium adjustments and midterm premium audits Governor Greg Abbott has issued a disaster declaration in response to the COVID-19 pandemic. The premium for many commercial property and casualty policies are calculated using an auditable exposure such as payroll or sales. Because of the impact the COVID-19 outbreak has had on Texas businesses, the Texas Department of Insurance (TDI) expects insurers to work with commercial policyholders that have reduced operations due to the COVID-19 outbreak. For policies calculated using an auditable exposure that may have changed as a result of the COVID-19 outbreak, TDI encourages insurers to: Conduct midterm premium audits if requested by policyholders. Many policies allow midterm audits and do not require an onsite audit. Allow policyholders to self-audit and report changes in the auditable exposure the company used to calculate the premium. Consider any reduced risk for businesses that change operations or elect to continue paying employees when they are not working. Make other adjustments to reduce the premium as appropriate. A midterm audit, self-audit, or other premium adjustment does not replace a final audit permitted or required by the policy. For questions about this bulletin, contact the Property and Casualty Division at PropertyCasualty@tdi.texas.gov . For more information, contact: PropertyCasualty@tdi.texas.gov Last updated: 4/17/2020