Texas Insurance Code

§ 541.060 — UNFAIR SETTLEMENT PRACTICES

IN § 541.060Title 5. PROTECTION OF CONSUMER INTERESTS · Part C. DECEPTIVE, UNFAIR, AND PROHIBITED PRACTICES · Ch. 541. UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE ACTS OR PRACTICES · Art. B. UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE ACTS OR PRACTICES DEFINED

Statute text

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(a)It is an unfair method of competition or an unfair or deceptive act or practice in the business of insurance to engage in the following unfair settlement practices with respect to a claim by an insured or beneficiary:

(1)misrepresenting to a claimant a material fact or policy provision relating to coverage at issue;

(2)failing to attempt in good faith to effectuate a prompt, fair, and equitable settlement of:

(A)a claim with respect to which the insurer's liability has become reasonably clear; or

(B)a claim under one portion of a policy with respect to which the insurer's liability has become reasonably clear to influence the claimant to settle another claim under another portion of the coverage unless payment under one portion of the coverage constitutes evidence of liability under another portion;

(3)failing to promptly provide to a policyholder a reasonable explanation of the basis in the policy, in relation to the facts or applicable law, for the insurer's denial of a claim or offer of a compromise settlement of a claim;

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Legislative history

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.