On July 22, 2008, Governor Rick Perry issued a proclamation declaring a disaster due to the effects of Tropical Storm Dolly, certifying that Tropical Storm Dolly poses a threat of imminent disaster to Aransas, Bexar, Brooks, Calhoun, Cameron, Hidalgo, Jim Wells, Kenedy, Kleberg, Nueces, Refugio, San Patricio, Victoria and Willacy counties beginning July 22, 2008, and directing that all necessary measures both public and private as authorized under §418.017 of the Texas Government Code be implemented to meet that threat. The proclamation also states that, as provided in §418.016 of the Texas Government Code, all rules and regulations that may inhibit or prevent prompt response to this threat are suspended for the duration of the incident.
Tropical Storm Dolly made landfall as a Category 2 hurricane. With the possible relocation of hurricane victims and other personal hardships sustained by residents of Aransas, Bexar, Brooks, Calhoun, Cameron, Hidalgo, Jim Wells, Kenedy, Kleberg, Nueces, Refugio, San Patricio, Victoria and Willacy counties, regardless of where those residents have temporarily relocated, the Texas Department of Insurance (TDI) encourages carriers to use all available means to provide prompt and immediate relief to those residents and policyholders, including but not limited to the suspension of premium payments to allow continuing insurance coverage. In conjunction with this effort and in accord with the Governor's proclamation, TDI will work with carriers to minimize the regulatory effects of a carrier's suspension of premium payments, specifically in regard to financial review requirements. The term "suspension" is not intended to mean forgiveness of the premium. Rather, it is intended that the carrier grant the policyholder an extended grace period for the payment of any premium due. Carriers are encouraged to work with policyholders in the collection of premiums, including payment plans.
The normal premium debits from financial institutions may continue in place according to the carrier's written agreement with the policyholder, unless a problem exists with premium debits or a policyholder's specific hardship directs a carrier otherwise. 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 expectation of TDI that any problems resulting from this issue will be resolved between the parties without a complaint being filed. This would include a carrier working with a policyholder to minimize effects of any penalties or charges associated with premium debits.
Questions regarding this bulletin may be directed to David Moskowitz, Assistant Chief Examiner, Market Conduct Examinations, Financial Program at 512-322-5040.
Mike Geeslin
Commissioner of Insurance