PJC Business

PJC 102.28

DTPA/I NSURANCE C ODE

eral Reserve Board prime rate is lower) and a maximum of 15 percent (if the Federal Reserve Board prime rate is higher). Tex. Fin. Code § 304.003(c). Finding date insurer received all reasonably requested information to deter mine when 18 percent interest penalty begins for claims governed by section 542.060(a). The Texas Supreme Court has not decided the date that the 18 percent penalty accrues, that is, the date the penalty begins to run. The Fifth Circuit has decided the issue, however, ruling that the penalty begins on the date of the violation. Cox Operating, L.L.C. v. St. Paul Surplus Lines Insurance Co. , 795 F.3d 496, 505–09 (5th Cir. 2015). Thus, if the insurer has sixty days to comply but does not, the penalty accrues on the sixty-first day. If the date of the insurer’s receipt of the requested infor mation is disputed, the jury must determine the actual date of receipt so that the court may then properly calculate the penalty. In such cases, the following question should precede PJC 102.28: QUESTION ______ By what date had Don Davis received all items, statements, and forms he reasonably requested from Paul Payne that were necessary to decide whether to accept or reject the claim? Answer with a date in the blank below. Answer: _______________ Finding “the date the claim was required to be paid” to determine when inter est penalty begins on “forces of nature” real property claims governed by section 542.060(c). The interest penalty for violations in handling claims for damage to real property and improvements caused by “forces of nature” begins “on the date the claim was required to be paid.” Tex. Ins. Code § 542.060(c). Under Section 542.058, the claim is “required to be paid” within sixty days of receiving all information reasonably requested from the claimant that is necessary to decide the claim. If the date by which this information was received is disputed, the question in the preceding comment ask ing the date should be submitted. Determining if insurer is “liable for a claim under an insurance policy.” To be liable for breach of any of the duties imposed by the Prompt Payment of Claims Act, the insurer must be “liable for a claim under an insurance policy.” Tex. Ins. Code § 542.060(a); Progressive County Mutual Insurance Co. v. Boyd , 177 S.W.3d 919, 922 (Tex. 2005). If there is a factual dispute whether the insurer is liable for the claim under the policy, the issue must be submitted to the jury. See PJC 101.56–101.60. Con sistent with the requirement that the policy cover the claim, Tex. Ins. Code §541.058(a)’s requirement to pay within sixty days expressly does not apply if as a result of arbitration or litigation “the claim is invalid and should not be paid by the insurer.” Tex. Ins. Code § 542.058(b).

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