Texas Insurance Code
§ 443.256 — SPECIAL PROVISIONS FOR THIRD-PARTY CLAIMS
IN § 443.256Title 4. REGULATION OF SOLVENCY · Part C. DELINQUENT INSURERS · Ch. 443. INSURER RECEIVERSHIP ACT · Art. F. CLAIMS
Statute text
View on source(a)When any third party asserts a cause of action against an insured of an insurer in liquidation, the third party may file a claim with the liquidator on or before the last day for filing claims.
(b)Whether or not the third party files a claim, the insured may file a claim on the insured's own behalf in the liquidation.
(c)The liquidator may make recommendations to the receivership court for the allowance of an insured's claim after consideration of the probable outcome of any pending action against the insured on which the claim is based, the probable damages recoverable in the action, and the probable costs and expenses of defense. After allowance by the receivership court, the liquidator shall withhold any distribution payable on the claim, pending the outcome of litigation and negotiation between the insured and the third party. The liquidator may reconsider the claim as provided in Section 443.253(j). As claims against the insured are settled or barred, the insured or third party, as appropriate, shall be paid from the amount withheld the same percentage distribution as was paid on other claims of like priority, based on the lesser of the amount actually due from the insured by action or paid by agreement plus the reasonable costs and expense of defense, or the amount allowed on the claims by the receivership court. After all claims are settled or barred, any sum remaining from the amount withheld shall revert to the undistributed property of the insurer.
(d)If several claims founded upon one policy are timely filed under this section, whether by third parties or as claims by the insured, and the aggregate amount of the timely filed allowed claims exceeds the aggregate policy limits, the liquidator may:
(1)apportion the policy limits ratably among the timely filed allowed claims; or
(2)give notice to the insured, known third parties, and affected guaranty associations that the aggregate policy limits have been exceeded. On and after the 30th day after the date of the liquidator's notice, further amounts may not be allowed, the policy limits shall be apportioned ratably among the timely filed allowed claims, and any additional claims shall be rejected.
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Legislative history
Acts 2007, 80th Leg., R.S., Ch. 921 (H.B. 3167), Sec. 9.004(ee), eff. September 1, 2007.