“Standing”? In Texas Insurance Law

A Grand Prairie life insurance policy holder passes away. His beneficiaries live in Dallas, Fort Worth, Arlington, Weatherford, and Mansfield. Who has “standing”, or the right to enforce the policy of insurance?
Uslegal.com defines “standing” as follows: Standing is the ability of a party to bring a lawsuit in court based upon their stake in the outcome. A party seeking to demonstrate standing must be able to show the court sufficient connection to and harm from the law or action challenged. Otherwise, the court will rule that you “lack standing” to bring the suit and dismiss your case.
As further general information, there are three constitutional requirements to prove standing:
1) Injury: The plaintiff must have suffered or imminently will suffer injury. The injury must not be abstract and must be within the zone of interests meant to be regulated or protected under the statutory or constitutional guarantee in question.
2) Causation: The injury must be reasonably connected to the defendant’s conduct.
3) Redressability: A favorable court decision must be likely to redress the injury.
The Texas Insurance Code, Section 541.151, grants a cause of action to a person who sustains actual damages caused by another person engaging in any unfair insurance practices or deceptive trade practices.
To be able to assert a cause of action against an insurance company the person must be: (1) a “person” as defined by the statute; and (2) injured by another’s unfair or deceptive acts. This is stated in the 2000 Texas Supreme Court case, Crown Life Insurance Company v. Casteel.
So who is defined as a “person”? Texas Insurance Code, Section 541.002(2), defines “person” to mean “an individual, corporation, association, partnership, reciprocal or interinsurance exchange, Lloyd’s plan, fraternal benefit society, or any other legal entity engaged in the business of insurance, including an agent, broker, adjuster or life insurance counselor.” It is important that the 541.151 language “engaged in the business of insurance” does not apply to the person bringing the lawsuit. This was an issue in the case, Ceshker v. Bankers Life Insurance Company, decided in 1978, by the Texas Supreme Court.
The categories of plaintiffs who have standing to sue under the statute include:
* insureds * named benficiaries (this is the category of our beginning question)
* intended third party beneficiaries
* agents * claimants who relied on representations by the insurer What is important here is having an understanding of who the people are who can file a lawsuit against an insurance company for a wrong that may have been committed by an insurance company or one of its agents. An experienced Insurance Law Attorney is a valuable resource for getting this advice. The answer is not always obvious and is in fact at times difficult.