Source: https://www.robinskaplan.com/resources/articles/claims-handling-practices-texas
Timestamp: 2019-04-18 15:36:33+00:00

Document:
Requiring 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 the claimant is ordered to produce those tax returns by a court of competent jurisdiction, the claim involves a fire loss, or the claim involves a loss of profits or income.
B-0011-17 – This bulletin reminds insurers that under the current disaster circumstances, Insurance Code § 4101.002(b) and § 4101.101 authorize carriers to use nonresident and emergency adjusters to handle claims.
B-0017-17 – This bulletin reminds all persons, including adjusters, building and repair contractors, and insurers, that under Insurance Code § 543.001, an insurer or its representative, or any other person, may not misrepresent the terms and provisions of a policy. Further, as stated in 28 Tex. Admin. Code § 5.9970(d) and (e), persons insured under a homeowners or dwelling policy are entitled to have their home repaired by the person of their choice. Finally, TDI reminded all insurers that Insurance Code § 542.003(a) prohibits unfair claim settlement practices, including, by way of example and not limitation, not attempting in good faith to effect a prompt, fair, and equitable settlement of a claim submitted in which liability has become reasonably clear.
B-0018-17 – This bulletin encourages insurers who deny coverage for wind losses to inform policyholders of potential coverage under the Texas Windstorm Insurance Association (“TWIA”) if the loss occurred in the TWIA coverage area.
B-0019-17 – This bulletin encourages insurers to provide relief to those residents and policyholders who have been temporarily displaced, including the suspension of any vacancy provision in the policy, to allow continuing insurance coverage.
B-0021-17 – This bulletin encourages insurers responding to flood losses not covered under their insurance policies to provide additional information to their insureds about potential Federal Emergency Management Agency assistance.
B-0022-17 – This bulletin notifies insurers that TDI ordered the claims processing deadlines extended fifteen (15) days for certain enumerated counties under the authority granted under Insurance Code § 542.059 and 28 Tex. Admin. Code § 5.9303.
B-0026-17 – This bulletin reminds insurers of their obligations under Insurance Code § 551. Specifically, when nonrenewing a standard fire, homeowners, or farm or ranch owners policy due to a policyholder filing three (3) or more claims under a policy in any three-year period, insurers may not consider: Losses caused by natural causes; claims filed but not paid or payable; or claims history for water damage under Insurance Code § 544.353. Further, insurers may not consider a customer inquiry as a basis for nonrenewal under Insurance Code § 551.113.
B-0029-17 – This bulletin lists a host of legislative efforts affecting property and casualty insurers. The full text of each bill is available at http://www.capitol.state.tx.us/.
B-0032-17 – This bulletin reminds insurers of their obligation to file updated underwriting guidelines with TDI each time the guidelines changes under Insurance Code § 38.002.
B-0033-17 – This bulletin notifies insures that TDI issued Commissioner’s Order No. 2017-5226, extending the deadline for a policyholder to demand appraisal of a claim arising from Hurricane Harvey. Under the extended deadline, a policyholder will have 120 days to demand appraisal after receiving TWIA’s written notice accepting all or part of a claim arising from Hurricane Harvey. TWIA’s appraisal process and requirements are described in Insurance Code § 2210.574 and 28 Tex. Admin. Code §§ 5.4211-5.4222, as well as TWIA’s policy contracts.
Texas recognizes a common-law cause of action for first-party insurer bad faith. Under Texas law, an insurer has a duty to fairly and in good faith process and pay claims. This duty is breached when: (1) no reasonable basis exists for denying or delaying payment of benefits under the policy; and (2) the insurer knew or should have known that no reasonable basis existed for denying or delaying payment of the claim. Transp. Ins. Co. v. Moriel, 879 S.W.2d 10, 17-18 (Tex. 1994).
Misrepresenting a material fact or policy provision relating to coverage.
Failure to attempt, in good faith, a prompt, fair, and equitable settlement when coverage on a claim has become clear.
Failure to provide an explanation of a denial.
Failure to affirm or deny coverage, or submit a reservation of rights, within a reasonable time.
Unreasonably denying settlement on the basis that other coverage may be available, or third parties are reasonable except as specifically provided in the policy.
Failure to pay a claim without conducting a reasonable investigation.
An insurer found liable under the Deceptive Trade Practices Act may be liable for: (1) actual damages; (2) court costs and attorney fees; and (3) treble damages in the event the insurer acted knowingly. Tex. Ins. Code § 541.152.
While it is possible for an insurer to face bad faith exposure in the absence of coverage, extra-contractual liability will only arise if the insurer’s conduct was extreme and caused damages unrelated to and independent of the contract claim. Progressive County Mut. Ins. Co. v. Boyd, 177 S.W.3d 919, 922 (Tex. 2005).
Independent adjusters are governed by Tex. Ins. Code § 4101 and public adjusters are governed by § 4102. Under authority granted by the later statute, public adjusters are also subject to a “Code of Ethics” codified at 28 Tex. Admin. Code § 19.713.
See Tex. Ins. Code Ann. § 542.055(a)(1)-(3), .056(a)-(d), .057(a)-(c) (2005).
Must acknowledge pertinent communications regarding claims within 15 business days.
Must acknowledge receipt of first-party claim within 15 days after the date of receipt of notice of claim.
Commence investigation of first-party claim within 15 days after the date of receipt of notice of claim.
Request from first-party claimant all items, statements, and forms that will be required from claimant within 15 days after the date of receipt of notice of the claim.
Notify first-party claimant in writing of the acceptance or rejection of a claim within 15 business days of receipt of all items, statements, and forms required to secure final proof of loss. When an insurer rejects a claim, it must state the reasons for rejecting the claim.
If additional time is needed to determine acceptance or rejection of first-party claim, notify claimant of reasons additional time is needed within 15 business days after the date of receipt of all items, statements, and forms required to secure final proof of loss.
After notifying first-party claimant that additional time to determine acceptance or rejection of a claim is needed, notify claimant in writing of the acceptance or rejection of a claim within 45 days after the date of notification that additional time is needed.
Pay first-party claim if claimant is notified that claim or part of claim will be paid within 5 business days after the date notice is given.

References: § 4101
 § 4101
 § 543
 § 5
 § 542
 § 542
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 § 551
 § 544
 § 551
 § 38
 § 2210
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 § 541
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 § 4101
 § 4102
 § 19
 § 542