Who can be sued when a life insurance claim is denied is an important consideration by strategic considerations. Here is some insight.
Chapter 541 of the Texas Insurance Code defines and prohibits unfair and deceptive insurance practices. Specifically, look at sections 541.001 to 541.061, 541.151 to 541.162, and 541.453.
The statute allows a private cause of action by any person who has sustained actual damages caused by another’s engaging in any act or practice that is defined as an unfair method of competition or unfair or deceptive act or practice in the business of insurance, or defined as an unlawful deceptive trade practice. This is found in Section 541.151. The definitions of unfair and deceptive practices are found in two places: (1) Texas Insurance Code, Sections 541.051 to 541.061, and (2) Section 17.46(b) of the Business & Commerce Code, the Texas Deceptive Trade Practices — Consumer Protection Act (DTPA). See Texas Insurance Code, Section 541.051.
The Insurance Code sections prohibit:
1) misrepresentations and falsse advertising of polic contracts;
2) false information and advertising generally;
3) defamation of insurers or persons engaged in the business of insurance;
4) boycott, coercion, and intimidation in the business of insurance;
5) false financial statements;
6) stock operations and advisory board contracts;
7) unfair discrimination;
9) deceptive names, words, symbols, devises, and slogans;
10) unfair settlement practices; and
11) misrepresentation of insurance policies.
The most commonly used provisions are those relating to unfair settlement practices and misrepresentations of insurance policies.