Tex. Ins. Code Section 541.060
Unfair Settlement Practices


(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;

(4)

failing within a reasonable time to:

(A)

affirm or deny coverage of a claim to a policyholder; or

(B)

submit a reservation of rights to a policyholder;

(5)

refusing, failing, or unreasonably delaying a settlement offer under applicable first-party coverage on the basis that other coverage may be available or that third parties are responsible for the damages suffered, except as may be specifically provided in the policy;

(6)

undertaking to enforce a full and final release of a claim from a policyholder when only a partial payment has been made, unless the payment is a compromise settlement of a doubtful or disputed claim;

(7)

refusing to pay a claim without conducting a reasonable investigation with respect to the claim;

(8)

with respect to a Texas personal automobile insurance policy, delaying or refusing settlement of a claim solely because there is other insurance of a different kind available to satisfy all or part of the loss forming the basis of that claim; or

(9)

requiring a claimant as a condition of settling a claim to produce the claimant’s federal income tax returns for examination or investigation by the person unless:

(A)

a court orders the claimant to produce those tax returns;

(B)

the claim involves a fire loss; or

(C)

the claim involves lost profits or income.

(b)

Subsection (a) does not provide a cause of action to a third party asserting one or more claims against an insured covered under a liability insurance policy.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.

Source: Section 541.060 — Unfair Settlement Practices, https://statutes.­capitol.­texas.­gov/Docs/IN/htm/IN.­541.­htm#541.­060 (accessed Feb. 24, 2024).

541.001
Purpose
541.002
Definitions
541.003
Unfair Methods of Competition and Unfair or Deceptive Acts or Practices Prohibited
541.004
Venue for Actions Involving Department or Commissioner
541.005
Applicability to Risk Retention or Purchasing Group
541.006
Prohibited Content of Certain Insurance Policies
541.007
Immunity from Prosecution
541.008
Liberal Construction
541.051
Misrepresentation Regarding Policy or Insurer
541.052
False Information and Advertising
541.053
Defamation of Insurer
541.054
Boycott, Coercion, or Intimidation
541.055
False Financial Statement
541.056
Prohibited Rebates and Inducements
541.057
Unfair Discrimination in Life Insurance and Annuity Contracts
541.058
Certain Practices Not Considered Discrimination or Inducement
541.059
Deceptive Name, Word, Symbol, Device, or Slogan
541.060
Unfair Settlement Practices
541.061
Misrepresentation of Insurance Policy
541.082
Advertising and Internet Websites
541.083
Advertisements to Certain Associations
541.084
Advertisements Relating to Medicare Program
541.085
Advertisements Relating to Preferred Provider Benefit Plans
541.086
Advertising Regarding Guaranteed Renewable Coverage
541.101
Examination and Investigation
541.102
Statement of Charges
541.103
Hearing
541.104
Hearing Procedures
541.105
Record of Hearing
541.106
Compliance with Subpoena
541.107
Determination of Violation
541.108
Cease and Desist Order
541.109
Modification or Setting Aside of Order
541.110
Administrative Penalty
541.111
Civil Penalty for Violation of Cease and Desist Order
541.151
Private Action for Damages Authorized
541.152
Damages, Attorney’s Fees, and Other Relief
541.153
Frivolous Action
541.154
Prior Notice of Action
541.155
Abatement
541.156
Settlement Offer
541.157
Contents of Settlement Offer
541.158
Rejection of Settlement Offer
541.159
Limit on Recovery After Settlement Offer
541.160
Effect of Settlement Offer
541.161
Mediation
541.162
Limitations Period
541.201
Injunctive Relief
541.202
Venue for Injunctive Action
541.203
Issuance of Injunction
541.204
Civil Penalty
541.205
Compensation or Restoration
541.206
Civil Penalty for Violation of Injunction
541.207
Remedies Not Exclusive
541.251
Class Action Authorized
541.252
Recovery
541.253
Frivolous Action
541.254
Statute of Limitations Tolled
541.255
Prior Notice
541.256
Prerequisites to Class Action
541.257
Class Actions Maintainable
541.258
Class Actions: Issues and Subclasses Authorized
541.259
Determination Regarding Whether Class Action May Be Maintained
541.260
Effect of Denial of Class Action
541.261
Notice of Class Action
541.262
Procedures in Class Action
541.263
Effect of Settlement Offer
541.264
Defenses
541.265
Limitations Period for Damages
541.266
Disposition
541.267
Contents of Judgment
541.301
Refund of Premiums
541.302
Time to Make Refunds
541.303
Sanction
541.304
Evidentiary Use of Compliance or Attempt to Comply
541.351
Acceptance of Assurance
541.352
Effect of Assurance
541.353
Reopening
541.354
Right to Bring Action Not Affected
541.401
Rulemaking Authority
541.402
Petition
541.403
Denial of Petition
541.404
Hearing on Petition
541.405
Judicial Review of Department Action
541.451
Liability Under Other Law
541.452
Powers in Addition to Other Powers Authorized by Law
541.453
Double Recovery Prohibited
541.454
Penalties and Related Payments by Insurer

Accessed:
Feb. 24, 2024

§ 541.060’s source at texas​.gov