Consumer Law: Insurance Code

Front 1

Ch. 541 (Article 21.21.)

Back 1

Protects against unfair and deceptive acts/practices in insurance business (protects insurers against anti-competitive acts)

Broader than DTPA--> applies to any person, not just consumer

Front 2

Ch. 541 specifically regulates ...

Back 2

1. Misrepresentations and false advertising of policy contracts (of company, agents, advertising)

2. Prohibits competitor defamation

3. Unfair discrimination against people of same insurance risk/ class

4. Deceptive name, word, symbol, device or slogan: trading off another’s name or slogan

5. **Unfair Settlement Practices: [statutory bad faith] failing to attempt in good faith to effectuate prompt, fair and equitable settlement after liability is reasonably clear

6. Misrepresentation of Insurance Policy: Any misrepresentation of terms or existence

Front 3

Ch. 541 relief is very similar to DTPA

Back 3

Ch. 541 makes violation of DTPA laundry list actionable under 541; DTPA makes violation of 541 actionable under DTPA.

One action can result in 4 causes of action (actions under DTPA and Ch. 541; brought as a "person" and "consumer")

Front 4

541 remedies

Back 4

1) Actual Damages: prevailing P may obtain “actual damages” plus court costs and reasonable attorneys’ fees (broader than “economic damages” standard of DTPA ... “actual damages” under DTPA includes any damages recoverable at common law → recoverable amount determined by total loss of consumer)

2) Additional Damages: if knowingly, may award not more than 3x actual damages

3) Plaintiffs’ Attorneys’ Fees: prevailing--> reasonable & necessary

4) Defendants’ Attorneys’ Fees: if groundless/bad faith or harassment

Front 5

Ch. 541 actions must be commenced..

Back 5

Within 2 years after injury.

Front 6

Main diff. between DTPA and Insurance Code

Back 6

"Person" v. "Consumer";

"Actual Damages" v. "Economic Damages"