Insurance Law – Other States

Grand Prairie attorneys and those in Dallas, Richardson, Mesquite, Garland, Carrollton, and other places in Dallas County should keep themselves informed about law in other areas of the country. Knowledge of how other states handle their cases gives insight and argument concerning how Texas courts should handle similar cases.
Here is a short brief on a Louisiana insurance case.
The style of the case is Katie Realty, Ltd. v. Louisiana Citizens Property Insurance Corp.
The issue on appeal before the Louisiana Supreme Court in this case concerned whether a written settlement agreement compromising a contested property insurance claim constituted a “proof of loss” under La. Rev. Stat. 22:1892(A)(1) sufficient to trigger the penalties set forth in La. Rev. Stat. 22:1892(B) for the insurer’s arbitrary and capricious failure to timely pay the settlement funds. Plaintiff, Katie Realty, Ltd., filed suit against defendant, Louisiana Citizens Property Insurance Corporation (Citizens), for its untimely handling of plaintiff’s Hurricane Gustav property damage claim. The matter was settled through mediation. When Citizens failed to timely pay the settlement funds, plaintiff filed a motion to enforce settlement and assess penalties pursuant to La. Rev. Stat. 22:1892 and 1973. In accordance with La. Rev. Stat. 22:1892(B)(1), the District Court awarded plaintiff $125,000 in penalties. The court of appeal affirmed, finding the settlement agreement constituted sufficient “proof of loss” under the provisions of La. Rev. Stat. 22:1892(A)(1) and Citizens’ misconduct warranted the imposition of penalties under La. Rev. Stat. 22:1892(B)(1). Upon review, the Supreme Court concluded that the written settlement agreement did not constitute satisfactory proof of loss under the provisions of La. Rev. Stat. 22:1892(A)(1) sufficient to trigger the penalties set forth in La. Rev. Stat. 22:1892(B)(1). Accordingly, the Court reversed the judgment of the court of appeal and rendered judgment awarding plaintiff $5,000 in statutory penalties for Citizens’ failure to timely pay the settlement funds in accordance with the provisions of La. Rev. Stat. 22:1973(B)(2) and (C).
If reading the above does not convince you that you need to get an experienced Insurance Law Attorney involved in any case you have concerning insurance, then who knows what would convince you.
In Texas, most of what is discussed above is relevant to the Texas Prompt Payment of Claims Act.
The Prompt Payment of Claims act sets out how and when a claim for benefits is to be acknowledged and then set time frames for actions to be taken in investigating the claim and then ultimately, when and how the claim is paid. The act also details how failure by an insurance company to do as the act prescribes results in punishment to the insurance company.
In addition to the Prompt Payment of Claims Act, in Texas, the Texas Insurance Code also has Sections 541.060, which describes unfair settlement practices and Section 541.061, which describes misrepresentations of insurance policies.