Governmental Regulation Impact On Lawsuits

Dallas insurance attorneys need to understand the impact of government regulation on insurance litigation.
The extensive regulation of insurance has a direct impact on private litigation. Numerous examples can be cited.
1) Numerous states dictate the type of coverage that must be provided, and the forms that must be used. In Texas, see the Texas Insurance Code (TIC) in the following areas,
a) group life insurance, TIC 1151.001
b) group and blanket accident and health insurance, TIC 1251.001
c) accident and sickness insurance, TIC 1201.051
d) automobile insurance, TIC many sections and the Texas Transportation Code e) personal injury protection under automobile liability insurance policies, TIC 1952.151
f) coverages for spouses and former spouses under homeowner’s or fire insurance policies, TIC 5.35-1 2) other statutes prohibit certain policy provisions. An example is found in Texas Insurance Code, Section 1151.101.
3) statutes prohibit certain unfair insurance practices, including misrepresentations, unfair discrimination, and unfair settlement practices. These issues are discussed in Sections 541 and 542 of the Texas Insurance Code.
4) agents and companies are subject to licensing. An agent representing an unlicensed company may be personally liable for the company’s misconduct. Statutes dealing with this can be found at TIC, Sections 541.002(2), 541.151, 544.051(6), and 544.052.
5) an insurance contract entered into by an unauthorized insurer is unenforceable by the insurer. Any person who helped procure the insurance is liable to the insured for the full amount of the claim, if the insurer fails to pay. This is found in Section 101.201.
6) an insurer may not be able to enforce agreements written on unapproved forms that conflict with approved policy provisions. This is found in Texas case law. The case is a Texas Supreme Court case from 1999, styled, Urrutia v. Decker.
7) when an agent is licensed, the scope of the insurer’s liability for the agent’s conduct may be defined by statute. This is through legal principles of agency.
8) courts recognize special rules of contract construction that favor insureds. These are rules favoring the insured when there is ambiguity in the insurance policy contract. It is also in the narrow construction of exclusions and liberal construction in favor of being insured.
All the above illustrates in an appropriate way the necessity of seeing an insurance law attorney when dealing with insurance related issues.

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