Texas Insurance Code 463.260 – Limits On and Termination of Association Obligation
(a) The association is not liable for benefits that exceed the contractual obligations for which the insurer is liable or would have been liable if not impaired or insolvent. The association has no obligation to provide benefits outside the express written terms of the policy or contract, including:
(1) claims based on marketing materials;
(2) claims based on side letters, riders, or other documents that were issued without meeting applicable policy form filing or approval requirements;
(3) claims based on misrepresentation of or regarding policy benefits;
(4) extracontractual claims; or
(5) claims for penalties or consequential or incidental damages.
(b) The association’s obligations with respect to coverage under a policy of an impaired or insolvent insurer or under a reissued or alternative policy terminate on the date the coverage or policy is replaced by another similar policy by the policyholder, the contract owner, the insured, the enrollee, or the association.
Terms Used In Texas Insurance Code 463.260
- Contract: A legal written agreement that becomes binding when signed.
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Written: includes any representation of words, letters, symbols, or figures. See Texas Government Code 311.005
(c) If a premium is not paid before the 32nd day after the date the premium is due under a guaranteed, assumed, alternative, or reissued policy or contract or substitute coverage, the association’s obligations under the policy, contract, or coverage terminate, except with respect to a claim incurred or any net cash surrender value due as provided by this chapter.