PJC Business

DTPA/I NSURANCE C ODE

PJC 102.27

PJC 102.27 Prompt Payment of Claims Act — Violation of Insurer’s Duty to Pay after Notice to Claimant that Insurer Will Pay All or Part of Claim (Tex. Ins. Code § 542.057) QUESTION ______ Did Don Davis fail to timely pay Paul Payne ’s claim? An insurer “fails to timely pay” if, within five business days of notifying the claimant in writing that it will pay all or part of a claim, the insurer fails to pay as stated in the writing. “Business day” means every day except Saturday [ , / or ] Sunday [ , or [ insert relevant state holiday(s) ]]. Answer “Yes” or “No.” Answer: _______________ COMMENT When to use. PJC 102.27 submits the insurer’s failure to pay what the insurer agreed to pay in its written notice to the claimant accepting the claim in whole or in part. Tex. Ins. Code §542.057. If the insurer conditions its promise to pay on the per formance of an act by the claimant, the insurer must pay within five business days of the performance of the act, rather than five business days of the notice to the claimant, and the question in PJC 102.27 should be modified accordingly. PJC 102.27 assumes the insurer is not an “eligible surplus lines insurer” and therefore provides for a five day time period in which the insurer is required to comply. See comment below, “Extension of deadline—‘eligible surplus lines insurer,’” for changes to the question if such an insurer is involved. Broad-form submission. PJC 102.27 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

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