Tex. INS Code § 542.001. SHORT TITLE.
This subchapter may be cited as the Unfair Claim Settlement Practices Act.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
PROCESSING AND SETTLEMENT OF CLAIMS
Tex. INS Code ch. 542
in effectTex. INS Code § 542.002. APPLICABILITY OF SUBCHAPTER.
This subchapter applies to the following insurers whether organized as a proprietorship, partnership, stock or mutual corporation, or unincorporated association:
(1) a life, health, or accident insurance company;
(2) a fire or casualty insurance company;
(3) a hail or storm insurance company;
(4) a title insurance company;
(5) a mortgage guarantee company;
(6) a mutual assessment company;
(7) a local mutual aid association;
(8) a local mutual burial association;
(9) a statewide mutual assessment company;
(10) a stipulated premium company;
(11) a fraternal benefit society;
(12) a group hospital service corporation;
(13) a county mutual insurance company;
(14) a Lloyd's plan;
(15) a reciprocal or interinsurance exchange; and
(16) a farm mutual insurance company.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
Tex. INS Code § 542.003. UNFAIR CLAIM SETTLEMENT PRACTICES PROHIBITED.
(a) An insurer engaging in business in this state may not engage in an unfair claim settlement practice.
(b) Any of the following acts by an insurer constitutes unfair claim settlement practices:
(1) knowingly misrepresenting to a claimant pertinent facts or policy provisions relating to coverage at issue;
(2) failing to acknowledge with reasonable promptness pertinent communications relating to a claim arising under the insurer's policy;
(3) failing to adopt and implement reasonable standards for the prompt investigation of claims arising under the insurer's policies;
(4) not attempting in good faith to effect a prompt, fair, and equitable settlement of a claim submitted in which liability has become reasonably clear;
(5) compelling a policyholder to institute a suit to recover an amount due under a policy by offering substantially less than the amount ultimately recovered in a suit brought by the policyholder;
(6) failing to maintain the information required by Section 542.005 ; or
(7) committing another act the commissioner determines by rule constitutes an unfair claim settlement practice.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
Tex. INS Code § 542.004. EXAMINATION OF TAX RETURNS PROHIBITED.
(a) An insurer regulated under this code may not require a claimant, as a condition of settling a claim, to produce the claimant's federal income tax returns for examination or investigation by the insurer unless:
(1) the claimant is ordered to produce the tax returns by a court; or
(2) the claim involves:
(A) a fire loss; or
(B) a loss of profits or income.
(b) An insurer that violates this section commits:
(1) a prohibited practice under this subchapter; and
(2) a deceptive trade practice under Subchapter E , Chapter 17 , Business & Commerce Code.
(c) A claimant affected by a violation of this section is entitled to remedies under Subchapter E , Chapter 17 , Business & Commerce Code.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
Tex. INS Code § 542.005. RECORD OF COMPLAINTS.
(a) In this section, "complaint" means any written communication primarily expressing a grievance.
(b) An insurer shall maintain a complete record of all complaints received by the insurer during the preceding three years or since the date of the insurer's last examination by the department, whichever period is shorter. The record must indicate:
(1) the total number of complaints;
(2) the classification of complaints by line of insurance;
(3) the nature of each complaint;
(4) the disposition of the complaints; and
(5) the time spent processing each complaint.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
Tex. INS Code § 542.006. PERIODIC REPORTING REQUIREMENT.
(a) In this section, "claim" means a written claim filed by a resident of this state with an insurer engaging in business in this state.
(b) If, based on complaints of unfair claim settlement practices under this subchapter, the department finds that an insurer should be subjected to closer supervision with respect to the insurer's claim settlement practices, the department may require the insurer to file periodic reports at intervals the department determines necessary.
(c) Repealed by Acts 2015, 84th Leg., R.S., Ch. 42 , Sec. 3.01(4), eff. September 1, 2015.
(d) If at any time the department determines that the requirement to file a periodic report is no longer necessary to accomplish the objectives of this subchapter, the department may rescind the reporting requirement.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
Tex. INS Code § 542.007. COMPARISON OF CERTAIN INSURERS TO MINIMUM STANDARD OF PERFORMANCE; INVESTIGATION.
(a) The department shall compile the information received from an insurer under Section 542.006 in a manner that enables the department to compare the insurer's performance to a minimum standard of performance adopted by the commissioner.
(b) If the department determines that the insurer does not meet the minimum standard of performance, the department shall investigate the insurer to determine the reason, if any, that the insurer does not meet the minimum standard.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
Tex. INS Code § 542.008. COMPLAINTS AGAINST INSURERS; INVESTIGATION.
(a) The department shall establish a system for receiving and processing individual complaints alleging a violation of this subchapter by an insurer regardless of whether the insurer is required to file a periodic report under Section 542.006 .
(b) The department shall investigate an insurer if the department determines that:
(1) based on the number and type of complaints against an insurer, the insurer does not meet the minimum standard of performance adopted under Section 542.007 ; or
(2) the number and type of complaints against the insurer are not proportionate to the number and type of complaints against other insurers writing similar lines of insurance.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
Tex. INS Code § 542.009. REVIEW OF INVESTIGATION RESULTS; HEARING.
(a) On receiving the results of an investigation instituted under Section 542.007 or 542.008 , the department shall review those results considering the standards of this subchapter to determine whether further action is necessary.
(b) If the department determines that further action is necessary, the department shall:
(1) set a date for a hearing to review the alleged violations of this subchapter; and
(2) notify the insurer of:
(A) the date of the hearing; and
(B) the nature of the charges.
(c) The department shall provide the notice required by Subsection (b)(2) not later than the 30th day before the date of the hearing.
(d) At a hearing under this section, the insurer may present the insurer's case with the assistance of counsel.
(e) Evidence relating to the number and type of complaints or claims prepared by the department from information received or compiled under Section 542.006 , 542.007 , or 542.008 is admissible in evidence at:
(1) the hearing; and
(2) any related judicial proceeding.
(f) The hearing shall be conducted in accordance with this code and rules adopted by the commissioner.
(g) An insurer may not be found to be in violation of this subchapter solely because of the number and type of complaints or claims against the insurer.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
Tex. INS Code § 542.010. CEASE AND DESIST ORDER; ENFORCEMENT.
(a) If the department determines that an insurer has violated this subchapter, the department shall issue a cease and desist order to the insurer directing the insurer to stop the unlawful practice.
(b) If the insurer fails to comply with the cease and desist order, the department may:
(1) revoke or suspend the insurer's certificate of authority; or
(2) limit, regulate, and control:
(A) the insurer's line of business;
(B) the insurer's writing of policy forms or other particular forms; and
(C) the volume of the insurer's:
(i) line of business; or
(ii) writing of policy forms or other particular forms.
(c) The department shall exercise authority under this section to the extent that the department determines is necessary to obtain the insurer's compliance with the cease and desist order.
(d) At the request of the department, the attorney general shall assist the department in enforcing the cease and desist order.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
Tex. INS Code § 542.011. TIME LIMIT TO APPEAL.
An insurer affected by a ruling or order of the department under this subchapter may appeal the ruling or order, in accordance with Subchapter D , Chapter 36 , by filing a petition for judicial review not later than the 20th day after the date of the ruling or order.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
Tex. INS Code § 542.012. ATTORNEY'S FEES.
The department is entitled to reasonable attorney's fees if judicial action is necessary to enforce an order of the department under this subchapter.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
Tex. INS Code § 542.013. PERSONNEL.
The department may hire employees and examiners as needed to enforce this subchapter.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
Tex. INS Code § 542.014. RULES.
The commissioner shall adopt reasonable rules as necessary to implement and augment the purposes and provisions of this subchapter.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
SUBCHAPTER B. PROMPT PAYMENT OF CLAIMS
Tex. INS Code § 542.051. DEFINITIONS.
In this subchapter:
(1) "Business day" means a day other than a Saturday, Sunday, or holiday recognized by this state.
(2) "Claim" means a first-party claim that:
(A) is made by an insured or policyholder under an insurance policy or contract or by a beneficiary named in the policy or contract; and
(B) must be paid by the insurer directly to the insured or beneficiary.
(3) "Claimant" means a person making a claim.
(4) "Notice of claim" means any written notification provided by a claimant to an insurer that reasonably apprises the insurer of the facts relating to the claim.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
Tex. INS Code § 542.052. APPLICABILITY OF SUBCHAPTER.
This subchapter applies to any insurer authorized to engage in business as an insurance company or to provide insurance in this state, including:
(1) a stock life, health, or accident insurance company;
(2) a mutual life, health, or accident insurance company;
(3) a stock fire or casualty insurance company;
(4) a mutual fire or casualty insurance company;
(5) a Mexican casualty insurance company;
(6) a Lloyd's plan;
(7) a reciprocal or interinsurance exchange;
(8) a fraternal benefit society;
(9) a stipulated premium company;
(10) a nonprofit legal services corporation;
(11) a statewide mutual assessment company;
(12) a local mutual aid association;
(13) a local mutual burial association;
(14) an association exempt under Section 887.102 ;
(15) a nonprofit hospital, medical, or dental service corporation, including a corporation subject to Chapter 842 ;
(16) a county mutual insurance company;
(17) a farm mutual insurance company;
(18) a risk retention group;
(19) a purchasing group;
(20) an eligible surplus lines insurer; and
(21) except as provided by Section 542.053 (b), a guaranty association operating under Chapter 462 or 463 .
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
Tex. INS Code § 542.053. EXCEPTION.
(a) This subchapter does not apply to:
(1) workers' compensation insurance;
(2) mortgage guaranty insurance;
(3) title insurance;
(4) fidelity, surety, or guaranty bonds;
(5) marine insurance as defined by Section 1807.001 ; or
(6) a guaranty association created and operating under Chapter 2602 .
(b) A guaranty association operating under Chapter 462 or 463 is not subject to the damage provisions of Section 542.060 .
(c) This subchapter does not apply to a health maintenance organization except as provided by Section 1271.005 (c).
(d) This subchapter does not apply to a claim governed by Subchapter C , Chapter 1301 .
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
Tex. INS Code § 542.054. LIBERAL CONSTRUCTION.
This subchapter shall be liberally construed to promote the prompt payment of insurance claims.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
Tex. INS Code § 542.055. RECEIPT OF NOTICE OF CLAIM.
(a) Not later than the 15th day or, if the insurer is an eligible surplus lines insurer, the 30th business day after the date an insurer receives notice of a claim, the insurer shall:
(1) acknowledge receipt of the claim;
(2) commence any investigation of the claim; and
(3) request from the claimant all items, statements, and forms that the insurer reasonably believes, at that time, will be required from the claimant.
(b) An insurer may make additional requests for information if during the investigation of the claim the additional requests are necessary.
(c) If the acknowledgment of receipt of a claim is not made in writing, the insurer shall make a record of the date, manner, and content of the acknowledgment.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
Tex. INS Code § 542.056. NOTICE OF ACCEPTANCE OR REJECTION OF CLAIM.
(a) Except as provided by Subsection (b) or (d), an insurer shall notify a claimant in writing of the acceptance or rejection of a claim not later than the 15th business day after the date the insurer receives all items, statements, and forms required by the insurer to secure final proof of loss.
(b) If an insurer has a reasonable basis to believe that a loss resulted from arson, the insurer shall notify the claimant in writing of the acceptance or rejection of the claim not later than the 30th day after the date the insurer receives all items, statements, and forms required by the insurer.
(c) If the insurer rejects the claim, the notice required by Subsection (a) or (b) must state the reasons for the rejection.
(d) If the insurer is unable to accept or reject the claim within the period specified by Subsection (a) or (b), the insurer, within that same period, shall notify the claimant of the reasons that the insurer needs additional time. The insurer shall accept or reject the claim not later than the 45th day after the date the insurer notifies a claimant under this subsection.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
Tex. INS Code § 542.057. PAYMENT OF CLAIM.
(a) Except as otherwise provided by this section, if an insurer notifies a claimant under Section 542.056 that the insurer will pay a claim or part of a claim, the insurer shall pay the claim not later than the fifth business day after the date notice is made.
(b) If payment of the claim or part of the claim is conditioned on the performance of an act by the claimant, the insurer shall pay the claim not later than the fifth business day after the date the act is performed.
(c) If the insurer is an eligible surplus lines insurer, the insurer shall pay the claim not later than the 20th business day after the notice or the date the act is performed, as applicable.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
Tex. INS Code § 542.058. DELAY IN PAYMENT OF CLAIM.
(a) Except as otherwise provided, if an insurer, after receiving all items, statements, and forms reasonably requested and required under Section 542.055 , delays payment of the claim for a period exceeding the period specified by other applicable statutes or, if other statutes do not specify a period, for more than 60 days, the insurer shall pay damages and other items as provided by Section 542.060 .
(b) Subsection (a) does not apply in a case in which it is found as a result of arbitration or litigation that a claim received by an insurer is invalid and should not be paid by the insurer.
(c) A life insurer that receives notice of an adverse, bona fide claim to all or part of the proceeds of the policy before the applicable payment deadline under Subsection (a) shall pay the claim or properly file an interpleader action and tender the benefits into the registry of the court not later than the 90th day after the date the insurer receives all items, statements, and forms reasonably requested and required under Section 542.055 . A life insurer that delays payment of the claim or the filing of an interpleader and tender of policy proceeds for more than 90 days shall pay damages and other items as provided by Section 542.060 until the claim is paid or an interpleader is properly filed.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
Acts 2009, 81st Leg., R.S., Ch. 833 (S.B. 1812 ), Sec. 1, eff. June 19, 2009.
Tex. INS Code § 542.059. EXTENSION OF DEADLINES.
(a) A court may grant a request by a guaranty association for an extension of the periods under this subchapter on a showing of good cause and after reasonable notice to policyholders.
(b) In the event of a weather-related catastrophe or major natural disaster, as defined by the commissioner, the claim-handling deadlines imposed under this subchapter are extended for an additional 15 days.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
Tex. INS Code § 542.060. LIABILITY FOR VIOLATION OF SUBCHAPTER.
(a) Except as provided by Subsection (c), if an insurer that is liable for a claim under an insurance policy is not in compliance with this subchapter, the insurer is liable to pay the holder of the policy or the beneficiary making the claim under the policy, in addition to the amount of the claim, interest on the amount of the claim at the rate of 18 percent a year as damages, together with reasonable and necessary attorney's fees. Nothing in this subsection prevents the award of prejudgment interest on the amount of the claim, as provided by law.
(b) If a suit is filed, the attorney's fees shall be taxed as part of the costs in the case.
(c) In an action to which Chapter 542A applies, if an insurer that is liable for a claim under an insurance policy is not in compliance with this subchapter, the insurer is liable to pay the holder of the policy, in addition to the amount of the claim, simple interest on the amount of the claim as damages each year at the rate determined on the date of judgment by adding five percent to the interest rate determined under Section 304.003 , Finance Code, together with reasonable and necessary attorney's fees. Nothing in this subsection prevents the award of prejudgment interest on the amount of the claim, as provided by law. Interest awarded under this subsection as damages accrues beginning on the date the claim was required to be paid.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
Tex. INS Code § 542.061. REMEDIES NOT EXCLUSIVE.
The remedies provided by this subchapter are in addition to any other remedy or procedure provided by law or at common law.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
SUBCHAPTER C. PROVIDING CERTAIN CLAIMS INFORMATION ON REQUEST
Tex. INS Code § 542.101. REQUEST BY NAMED INSURED UNDER LIABILITY INSURANCE POLICY.
(a) In this section, "liability insurance" means:
(1) general liability insurance;
(2) professional liability insurance, including medical professional liability insurance;
(3) commercial automobile liability insurance; and
(4) the liability portion of commercial multiperil insurance.
(b) On written request of a named insured under a liability insurance policy, the insurer that wrote the policy shall provide to the insured information relating to the disposition of a claim filed under the policy. The information must include:
(1) the name of each claimant;
(2) details relating to:
(A) the amount paid on the claim;
(B) settlement of the claim; or
(C) judgment on the claim;
(3) details as to how the claim, settlement, or judgment is to be paid; and
(4) any other information required by rule of the commissioner that the commissioner considers necessary to adequately inform an insured with regard to any claim under a liability insurance policy.
(c) A request for information under this section must be transmitted to the insurer not later than six months after the date of disposition of the claim.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
Tex. INS Code § 542.102. REQUEST BY POLICYHOLDER UNDER PROPERTY AND CASUALTY INSURANCE POLICY.
(a) On written request of a policyholder, an insurer that writes property and casualty insurance in this state shall provide the policyholder with a list of claims charged against the policy and payments made on each claim.
(b) This section does not apply to a workers' compensation insurance policy subject to Section 2051.151 .
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
Tex. INS Code § 542.103. DEADLINE FOR PROVIDING REQUESTED INFORMATION.
(a) An insurer shall provide the information requested under this subchapter in writing not later than the 30th day after the date the insurer receives the request for the information.
(b) For purposes of this section, information is considered to be provided on the date the information is deposited with the United States Postal Service or is personally delivered.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
Tex. INS Code § 542.104. RULES.
The commissioner may by rule prescribe forms for requesting information and for providing requested information under this subchapter.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
SUBCHAPTER C-1. REQUEST FOR CLAIMS INFORMATION BY CERTAIN OFFICIALS
Tex. INS Code § 542.131. REQUEST BY CERTAIN OFFICIALS ENGAGED IN CRIMINAL INVESTIGATION.
(a) This section applies only to a claim for a burglary or robbery loss or a death claim seeking life insurance proceeds that is filed with an insurance company on or after September 1, 2001.
(b) In the course of a criminal investigation and subject to Subsection (c), the state fire marshal, the fire marshal of a political subdivision of this state, the chief of a fire department in this state, a chief of police of a municipality in this state, or a sheriff in this state may request in writing that an insurance company investigating a claimed burglary or robbery loss or a death claim seeking life insurance proceeds release information in the company's possession that relates to that claimed loss. The company shall release the information to any official authorized to request the information under this subsection if the company has reason to believe that the insurance claim is false or fraudulent.
(c) An official who requests information under this section may not request anything other than:
(1) an insurance policy relevant to an insurance claim under investigation and the application for that policy;
(2) policy premium payment records;
(3) the history of the insured's previous claims; and
(4) material relating to the investigation of the insurance claim, including:
(A) statements of any person;
(B) proof of loss; or
(C) other relevant evidence.
(d) This section does not authorize a public official or agency to adopt or require any form of periodic report by an insurance company.
(e) In the absence of fraud or malice, an insurance company or a person who releases information on behalf of an insurance company is not liable for damages in a civil action or subject to criminal prosecution for an oral or written statement made, or any other action taken, that relates to the information required to be released under this section.
(f) An official or department employee receiving information under this section shall maintain the confidentiality of the information until the information is required to be released during a criminal or civil proceeding.
(g) An insurance company or the company's representative may not intentionally refuse to release to an official described by Subsection (b) the information required to be released to that official under this section.
Added by Acts 2007, 80th Leg., R.S., Ch. 730 (H.B. 2636 ), Sec. 1D.001, eff. April 1, 2009.
SUBCHAPTER D. NOTICE OF SETTLEMENT OF CLAIM UNDER CASUALTY INSURANCE POLICY
Tex. INS Code § 542.151. APPLICABILITY OF SUBCHAPTER.
This subchapter applies only to the settlement of a claim under a casualty insurance policy that is delivered, issued for delivery, or renewed in this state, including a policy written by:
(1) a county mutual insurance company;
(2) a Lloyd's plan;
(3) an eligible surplus lines insurer; or
(4) a reciprocal or interinsurance exchange.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
Tex. INS Code § 542.152. EXCEPTION.
This subchapter does not apply to:
(1) a casualty insurance policy that requires the insured's consent to settle a claim against the insured;
(2) fidelity, surety, or guaranty bonds; or
(3) marine insurance as defined by Section 1807.001 .
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
Tex. INS Code § 542.153. NOTICE REQUIRED.
(a) Not later than the 10th day after the date an initial offer to settle a claim against a named insured under a casualty insurance policy issued to the insured is made, the insurer shall notify the insured in writing of the offer.
(b) Not later than the 30th day after the date a claim against a named insured under a casualty insurance policy issued to the insured is settled, the insurer shall notify the insured in writing of the settlement.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
Tex. INS Code § 542.154. RULES.
The commissioner may adopt rules to implement this subchapter.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
SUBCHAPTER E. RECOVERY OF DEDUCTIBLE FROM THIRD PARTIES UNDER CERTAIN AUTOMOBILE INSURANCE POLICIES
Tex. INS Code § 542.201. PURPOSE.
This subchapter is intended to encourage insurers to take appropriate and necessary steps to collect from third parties or the insurers of the third parties.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
Tex. INS Code § 542.202. DEFINITION.
In this subchapter, "action" includes taking various actions such as reasonable and diligent collection efforts, mediation, arbitration, and litigation against a responsible third party or the third party's insurer.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
Tex. INS Code § 542.203. APPLICABILITY OF SUBCHAPTER.
This subchapter applies to any insurer that delivers, issues for delivery, or renews in this state a private passenger automobile insurance policy, including a reciprocal or interinsurance exchange, mutual insurance company, association, Lloyd's plan, or other insurer.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
Tex. INS Code § 542.204. ACTION TO RECOVER DEDUCTIBLE.
(a) Notwithstanding any other provision of this code and except as provided by Subsection (b), if an insurer is liable to an insured for a claim that is subject to a deductible payable by the insured and a third party may be liable to the insurer or the insured for the amount of the deductible, the insurer shall:
(1) take action to recover the deductible against the third party not later than the first anniversary of the date the insured's claim is paid; or
(2) pay the amount of the deductible to the insured.
(b) An insurer is not required to take action or pay the amount of the deductible as required by Subsection (a) if, not later than the earlier of the first anniversary of the date the insured's claim is paid or the 90th day before the date the statute of limitations for a negligence action expires, the insurer:
(1) notifies the insured in writing that the insurer does not intend to take further collection actions against the third party; and
(2) authorizes the insured to take further collection actions.
(c) This section applies regardless of whether the third party who may be liable for the amount of the deductible is insured or uninsured.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
Tex. INS Code § 542.205. ENFORCEMENT; RULES.
The commissioner may enforce this subchapter and adopt and enforce reasonable rules necessary to accomplish the purposes of this subchapter.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
SUBCHAPTER F. WATER DAMAGE CLAIMS
Tex. INS Code § 542.251. PURPOSES.
The purposes of this subchapter are to:
(1) provide for the prompt, efficient, and effective handling and processing of water damage claims filed under residential property insurance policies, including claims involving losses due to mold;
(2) reduce the confusion and inconvenience policyholders experience in filing and resolving water damage claims filed under residential property insurance policies, including claims involving losses due to mold; and
(3) reduce claim costs and premiums for residential property insurance issued in this state.
Added by Acts 2005, 79th Leg., Ch. 728 (H.B. 2018 ), Sec. 11.011(a), eff. September 1, 2005.
Tex. INS Code § 542.252. APPLICABILITY OF SUBCHAPTER.
This subchapter applies to any insurer that handles or processes water damage claims filed under residential property insurance policies.
Added by Acts 2005, 79th Leg., Ch. 728 (H.B. 2018 ), Sec. 11.011(a), eff. September 1, 2005.
Tex. INS Code § 542.253. RULES.
(a) The commissioner may adopt rules that identify the types of water damage claims that require more prompt, efficient, and effective processing and handling than the processing and handling required under Subchapter B.
(b) The commissioner by rule may regulate the following aspects of water damage claims:
(1) required notice;
(2) acceptance and rejection of a claim;
(3) claim handling and processing procedures and time frames;
(4) claim investigation requirements, procedures, and time frames;
(5) settlement of claims; and
(6) any other area of claim processing, handling, and response determined to be relevant and necessary by the commissioner.
(c) A rule adopted under this section supersedes the minimum standards described by Subchapter B.
Added by Acts 2005, 79th Leg., Ch. 728 (H.B. 2018 ), Sec. 11.011(a), eff. September 1, 2005.
SUBCHAPTER G. INSURER'S RECOVERY FROM UNINSURED THIRD PARTY
Tex. INS Code § 542.301. APPLICABILITY OF SUBCHAPTER.
This subchapter applies to any insurer that delivers, issues for delivery, or renews a private passenger automobile insurance policy in this state, including a county mutual, a reciprocal or interinsurance exchange, or a Lloyd's plan.
Added by Acts 2005, 79th Leg., Ch. 1074 (H.B. 1572 ), Sec. 1, eff. September 1, 2005.
Redesignated from Insurance Code - Not Codified, Art/Sec 21.79H and amended by Acts 2007, 80th Leg., R.S., Ch. 730 (H.B. 2636 ), Sec. 3B.020(a), eff. September 1, 2007.
Redesignated from Insurance Code - Not Codified, Art/Sec 21.79H and amended by Acts 2007, 80th Leg., R.S., Ch. 921 (H.B. 3167 ), Sec. 9.020(a), eff. September 1, 2007.
Tex. INS Code § 542.302. RECOVERY IN SUIT OR OTHER ACTION.
An insurer that brings suit or takes other action described by Section 542.202 against a responsible third party relating to a loss that is covered under a private passenger automobile insurance policy issued by the insurer and for which the responsible third party is uninsured is entitled to recover, in addition to payments made by the insurer or insured, the costs of bringing the suit or taking the action, including reasonable attorney's fees and court costs.
Added by Acts 2005, 79th Leg., Ch. 1074 (H.B. 1572 ), Sec. 1, eff. September 1, 2005.
Redesignated from Insurance Code - Not Codified, Art/Sec 21.79H and amended by Acts 2007, 80th Leg., R.S., Ch. 730 (H.B. 2636 ), Sec. 3B.020(a), eff. September 1, 2007.
Redesignated from Insurance Code - Not Codified, Art/Sec 21.79H and amended by Acts 2007, 80th Leg., R.S., Ch. 921 (H.B. 3167 ), Sec. 9.020(a), eff. September 1, 2007.