Court Opinions

State Laws

US Code

US Constitution

Texas Insurance Code - Section 442.204. Third-Party Claims And Demands

Legal Research Home > Texas Lawyer > Insurance Code > Texas Insurance Code - Section 442.204. Third-Party Claims And Demands

§ 442.204. THIRD-PARTY CLAIMS AND DEMANDS.  (a) If a 
court has entered a liquidation, rehabilitation, or conservation 
order in a delinquency proceeding, a person who has a cause of 
action against an insured of the insurer under a liability 
insurance policy issued by the insurer is entitled to file a claim 
with the receiver, regardless of whether the claim is unliquidated 
or undetermined.
	(b)  A claim described by Subsection (a) may be approved if:                   
		(1)  it may be reasonably inferred from the proof 
presented on the claim that the person would be able to obtain a 
judgment on the cause of action against the insured;
		(2)  the person provides suitable proof that, other 
than those already presented, no additional valid claims against 
the insurer arising out of the person's cause of action may be made;  
and
		(3)  the total liability of the insurer to all 
claimants arising out of the same act of the insured is not greater 
than the total liability of the insurer would be if the insurer were 
not in liquidation, rehabilitation, or conservation.
	(c)  A judgment entered against an insured or insurer before 
the date of the commencement of the delinquency proceeding may not 
be given a priority higher than Class 3 under Section 442.551 unless 
the judgment creditor proves to the receiver's satisfaction the 
allegations supporting the judgment.
	(d)  A judgment against an insured taken after the date of 
the commencement of a delinquency proceeding with respect to the 
insurer may not be considered in the proceeding as evidence of 
liability or of the amount of damages.  A judgment against an 
insured taken by default or by collusion before the commencement of 
the delinquency proceeding may not be considered in the proceeding 
as conclusive evidence of the liability of the insured on the cause 
of action or of the amount of damages to which the person is 
entitled.

Added by Acts 2005, 79th Leg., ch. 727, § 1, eff. April 1, 2007.           

Last modified: August 11, 2007