Texas Insurance Code 887.208 – Contested Claims
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(a) An association may not contest a claim:
(1) only for delay or for a captious or inconsequential reason; or
(2) to force settlement at less than full payment.
(b) An association shall notify a claimant of the association’s intent to deny liability on a claim not later than the 60th day after the date the association receives due proof of claim.
Terms Used In Texas Insurance Code 887.208
- 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) An association that does not notify a claimant as provided by Subsection (b) is presumed as a matter of law to have accepted liability on the claim.
(d) The commissioner shall revoke the certificate of authority of any association the commissioner finds is operating fraudulently or improperly contesting claims.
(e) An association shall report to the department the costs of contests in the annual statement under Section 887.060. The report must be verified by an officer of the association.