(a) The association is not bound by:
(1) a judgment taken before the designation of impairment in which an insured under a liability insurance policy or the insurer failed to exhaust all appeals;
(2) a judgment taken by default or consent against an insured or the impaired insurer; or
(3) a judgment, settlement, or release entered into by the insured or the impaired insurer.
(b) A judgment, settlement, or release described by Subsection (a) is not evidence of liability or of damages in connection with a claim brought against the association, an impaired insurer’s insured, or another party under this chapter.

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Terms Used In Texas Insurance Code 462.303

  • Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
  • Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
  • Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.

(c) The association is entitled to recover the association’s costs, expenses, and reasonable attorney’s fees incurred in contesting a claim based on a judgment, settlement, or release described by Subsection (a) on the association’s behalf or on behalf of an impaired insurer’s insured after the date on which the party asserting the claim is provided notice by the association or otherwise of the provisions of this section applicable to the judgment, settlement, or release.