PJC Business

DTPA/I NSURANCE C ODE

PJC 102.28

PJC 102.28 Prompt Payment of Claims Act — Violation of Insurer’s Duty to Pay Claim within Sixty Days of Receipt of All Necessary Information Reasonably Requested from Claimant (Tex. Ins. Code § 542.058) QUESTION ______ Did Don Davis fail to pay Paul Payne ’s claim within sixty days of receiving all items, statements, and forms he reasonably requested from Paul Payne that were necessary to decide whether to accept or reject the claim? Answer “Yes” or “No.” Answer: _______________ COMMENT When to use. PJC 102.28 submits the insurer’s failure to pay the claim within sixty days of receiving “all items, statements, and forms reasonably requested and required under Section 542.055.” Tex. Ins. Code § 542.058. Broad-form submission. PJC 102.28 is a broad-form question designed to be accompanied by one or more appropriate instructions. Tex. R. Civ. P. 277 requires that “the court shall, whenever feasible, submit the cause upon broad-form questions.” Tex. R. Civ. P. 277; see Thota v. Young , 366 S.W.3d 678, 689 (Tex. 2012) (rule 277’s use of “whenever feasible” mandates broad-form submission in any or every instance in which it is capable of being accomplished). For further discussion, see PJC 116.2 regarding broad-form issues and the Casteel doctrine. Penalty for failing to comply with requirements. Except for claims made after September 1, 2017, that arise from damage or loss to real property or improvements caused by “forces of nature” like hail, hurricane, flood, wind, and earthquake, an insurer “liable for a claim” and “not in compliance” with the requirements of the stat ute is “liable to pay the holder of the policy or the beneficiary making the claim under the policy, in addition to the amount of the claim, interest on the amount of the claim at the rate of 18 percent a year as damages.” Compare Tex. Ins. Code § 542.060(a) (gen eral 18 percent rule), with Tex. Ins. Code § 542.060(c) (“forces of nature” real property exception). In 2017 the legislature passed H.B. 1774 creating chapter 542A of the Texas Insurance Code for real property damage claims from “forces of nature.” As a result, insurers who violate the statute in handling those claims are instead subject to a penalty “determined . . . by adding five percent” to the judgment rate under section 304.003 of the Texas Finance Code. Tex. Ins. Code § 542.060(c). The judgment rate is the Federal Reserve Board prime rate, subject to a minimum of 5 percent (if the Fed-

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