Texas Urges Insurers to Work with Commercial Customers on Premium Adjustments

The Texas Department of Insurance has issued a bulletin to insurers to urging them to work with commercial policyholders that have premiums based on payroll, sales, or a similar auditable exposure.

TDI requests that insurers conduct midterm audits and accept self-reports of changes to adjust premiums as appropriate.

TDI said the bulletin is 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 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.

Source: TDI