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SECTION VII -- CLAIMS HANDLING PRINCIPLES AND
PROCEDURES
I. DEFINITIONS
- When used herein, the following terms shall have the meanings
stated below:
A. CLAIM shall mean the assertion
by the Claimant of the existence of a lien, encumbrance, defect
or other matter purportedly affecting the title to the estate or
interest as insured.
B. CLAIMANT shall mean an Insured under
a policy of title insurance who shall have provided a Notice of
Claim to the Insurer of the existence of any Claim.
C. DAYS shall mean days other than a Saturday,
Sunday or a holiday observed by the State of Texas.
D. INSURER shall mean any Title Insurance
Company as defined in Article 9.02(c)
of the Texas Insurance Code.
E. NEW INFORMATION shall mean information
not furnished to the Insurer at the time of the classification
of the Claim and shall include new or modified allegations, petitions
or complaints.
F. NOTICE OF CLAIM means any written notification
to an Insurer by an Insured that reasonably apprises the Insurer
of the facts relating to the Claim.
II. STANDARDS
for handling of Claims by Insurers.
A. PROOF OF LOSS FORM: If the Insurer
requires a Proof of Loss, the Insurer must request the Proof of
Loss within 15 days after being notified of a Claim. The Insurer
must send the Proof of Loss Form,
T-40,
promulgated by the State Board of Insurance to the Claimant.
B. CONDITIONAL ACCEPTANCE: If the Insurer
is unable to accept or deny a Claim in accordance with the terms
of the title insurance policy and there is a pending lawsuit which
is the subject of the Claim, the Insurer shall provide a defense
to the Claimant. The defense may be provided subject to reservations
with regard to coverage. The Claimant shall be notified of the
reservation of the Insurer's right to contest that a Claim is
covered under the policy The notice must be in writing and state
the reasons for such reservation. The notice must fully inform
the Claimant of his/her right to contest the Insurer's reservation
by stating (1) any time deadlines to contest the reservation under
the policy or applicable law, and (2) that the Claimant may litigate
(or arbitrate to the extent provided in the policy) the Insurer's
reservation, if the Claimant elects.
C. DENIAL OF CLAIMS: Any denial of the
policy coverage of a Claim shall set forth in writing the reasons
for such denial. The notice of denial of a Claim must fully inform
the Claimant of his/her right to contest the denial by stating
(1) any time deadlines to contest the denial of the Claim under
the policy or applicable law, and (2) that the Claimant may litigate
(or arbitrate to the extent provided in the policy) the Insurer's
denial, if the Claimant elects.
D. LIMITATION OF COVERAGE; DENIAL: Unless
otherwise provided under the policy, no Insurer shall deny any
Claim for the failure of the Claimant to cooperate in the investigation
of any Claim, to file any Proof of Loss Form or to otherwise cooperate
in the handling of the Claim except as such action may prejudice
the rights of the Insurer. If the Claimant has failed to respond
within a reasonable time, the Insurer shall notify the Claimant
of the failure to provide the information or to cooperate and
shall notify the Claimant of the Insurer's intent to take action
as permitted by the policy. The notice shall specify a date not
less than 30 days after the date of such notice for the Claimant
to take such action to comply with the Insurer's request. If the
Claimant fails to comply, the Insurer may take the actions specified
in the notice.
E. REDETERMINATION OF POLICY COVERAGE:
The Insurer may redetermine the classification of any Claim based
on New Information.
F. RELEASE: No Insurer shall request a
Claimant to sign a release extending beyond the subject matter
giving rise to a settlement unless the additional subject matter
of such release has been fairly and openly negotiated between
the Insurer and the Claimant, including notice to the Claimant
of any consequences of the settlement to the Claimant's rights
under the policy.
G. DRAFTS CONTAINING LANGUAGE OF RELEASE:
No Insurer shall issue any draft or check to the Claimant when
endorsement of the draft or check would release the Insurer from
liability. Any release from liability must be a separate agreement,
and the signing of a release cannot be a condition for payment
of the amount of loss as finally determined and such expenses
as are payable under the policy.
H. RESERVES - SETTING AND REVIEWING: Upon
acceptance or conditional acceptance of a claim under a title
insurance policy, the title insurer must comply with the provisions
of Procedural Rule P-40.
Standards for Reserve Setting and Reviewing, in Section
IV, Basic Manual of Rules, Rates and Forms for the Writing of
Title Insurance in the State of Texas, as set forth below:
"P-40. Standards for Reserve
Setting and Reviewing
Upon acceptance or conditional acceptance
of a claim under a title insurance policy, the title insurer must:
(a) set an initial reserve within
thirty (30) days.
(b) base the reserve required in (a)
on an accurate estimate, in the best judgment of the Company's
personnel, of the costs expected to be paid to the insured or
other parties in the settlement and processing of the claim.
A nominal initial reserve may be used only when opening a file
without adequate information to make an appropriate assessment
of the risk.
(c) when a nominal initial reserve has
been set in accordance with (b) above, change the reserve to
reflect the risk as soon as sufficient information has been
received.
(d) review each reserve on a regular
basis (at least quarterly) and adjust the reserve as warranted
by new information or changed circumstances. It is equally important
that a claim not be over-reserved or under-reserved.
(e) maintain written records of the
initial reserve and any change to the reserve, including the
reasons for any change in the reserve, in the file for review
by the Commissioner for a period of four (4) years."
III. TIME
SCHEDULE for handling of Claim by title insurers.
A. ACKNOWLEDGMENT
AND INVESTIGATION OF CLAIM: The Insurer shall, within 15 days after
a Notice of Claim, (1) acknowledge the Claim, (2) commence investigation
of the Claim and (3) request necessary information that is allowed
to be requested by the policy. The Insurer may request additional
necessary information during the progress of the investigation.
B. CLASSIFICATION OF
CLAIMS: (1) ACCEPTANCE; (2) DENIAL; (3) CONDITIONAL ACCEPTANCE:
After the Insurer receives all of the requested information, the
Insurer shall notify the Claimant of the acceptance, denial or
conditional acceptance of the Claim. This notice shall be sent
to the Claimant within 30 days of receipt of such information.
However, should the Insurer be unable to determine whether to
accept or deny or conditionally accept the Claim within the time
specified in this regulation, the Insurer may notify the Claimant
of the Insurer's inability to accept, deny or conditionally accept
the Claim. The notice shall provide the reason(s) for the inability
to accept, deny or conditionally accept the Claim.
C. COMMENCEMENT OF ACTION
BY INSURER: The Insurer shall commence an action or a combination
of actions authorized under the policy of insurance or under Article
9.57 of the Texas Insurance Code
within 15 days after notification to the Claimant of the acceptance
or conditional acceptance of the Claim. The Insurer may comply
with this section by (i) employment of appraisers or other persons
with knowledge of the value of real property to determine the
extent of the loss under the policy; (ii) written correspondence
with third parties to secure a release or satisfaction of the
Claim; (iii) employment of counsel to commence or defend on the
Claim in current or new litigation; or (iv) other written correspondence
or evidence of commencement of action by the Insurer.
D. PAYMENT OF LOSS:
When liability and the extent of loss has been finally fixed in
accordance with the provisions of the policy, the loss shall be
payable within 10 days thereafter.
E. LIMITATION OF CLAIM
RECLASSIFICATION: Any reclassification shall be made within 30
days of the Insurer's receipt of New Information supporting a
change. The Insurer shall provide notice to the Claimant within
15 days of any reclassification. The notice must state the reasons
for the reclassification. The notice must fully inform the Claimant
of his/her right to contest the reclassification by stating (1)
any time deadlines to contest the reclassification of the Claim
under the policy or applicable law, and (2) that the Claimant
may litigate (or arbitrate to the extent provided in the policy)
the Insurer's reclassification, if the Claimant elects.
IV. SCHEDULE
for the implementation of these regulations.
These regulations shall become
effective on the ___________day of ____________, 1992, with regard
to all Claims submitted after that date. These regulations shall
not apply to any Claim which is the subject of any notification
received by an Insurer prior to the effective date of these regulations.
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TEXAS TITLE INSURANCE PROOF
OF LOSS FORM
TLTA Note:
In order to reproduce the form below as accurately as possible,
it has been provided in downloadable Microsoft Word, WordPerfect,
and PDF formats. If you have any questions, please contact TLTA at
tlta@tlta.com.
Download:  MSWord
document ||  WordPerfect
document ||  PDF
file
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TEXAS TITLE INSURANCE PROOF
OF LOSS FORM
Please complete all items to the best of
your knowledge and return this form to us within 91 days. We will
use the form to determine if your loss is covered under the policy.
NOTE: DELAY IN RETURN OF THIS FORM MAY AFFECT OUR ABILITY TO PROMPTLY PROCESS YOUR
CLAIM
FOR INFORMATION OR TO SUBMIT A CLAIM, CALL 1-800-_________________________.
Por favor llene todos los epigrafes lo mejor que pueda y envienos esta forma dentro
de los proximos 91 dias. Nosotros usaremos esta forma al objeto de determinar si
su perdida esta cubierta por la poliza.
NOTA: CUALQUIER DEMORA EN ENVIARNOS ESTA FORMA PUEDE AFECTAR NUESTRA CAPACIDAD
DE PROCESSAR PRONTAMENTE SU RECLAMACION.
PARA INFORMACION O PARA SOMETER UNA QUEJA, LLAME AL 1-800-_________________________.
1) Name of Insured(s):
Address of Insured(s):
Telephone Number of Insured(s):
2) Your interest in the Property:
____________OWNER ____________MORTGAGEE ____________OTHER (If other, please explain)
3) Please complete the following to the best of your knowledge OR attach a copy of
your policy:
a) Date the policy was issued, if known:
b) Policy number, if known:
c) File or GF number, if known:
d) Name of issuing agent, if known:
e) Legal description of the property (see deed or title insurance policy):
f) Street address of property:
Failure to provide enough information for us to identify your policy may result
in a delay in processing your claim or denial of your claim.
4) Please describe the problem you believe affects the title to the property:
5) Do you have an opinion about the amount of loss or damage caused by the title
problems described in Item 4?
________YES ________ NO
a) If yes, what is that amount? $_______________. (Please contact us if you
need to revise this amount after submitting this form.)
b) How did you determine this amount? (Please attach any documents you have
that show how you determined the amount.)
6) Have you been sued or threatened with a lawsuit because of the matter described
in Item 4?
________ YES _______ NO
a) If yes, how did you learn of the lawsuit or threatened lawsuit?
b) Have you been served with a petition or other legal document in a lawsuit?
__________ YES ___________ NO _____________DON'T KNOW
If yes, when and how were you served?
Please attach copies of all documents you have relating to the lawsuit, including
letters, the citation, the petition, and the complaint. We may need to ask for additional
information about your claim. You are required to provide only the information the policy
allows us to ask for.
If two or more persons are named in the policy, both may sign the same form:
_________________________________ _________________________________
Signature Date Signature Date
(Not applicable to the Texas Residential Owner Policy)
STATE OF ____________________
COUNTY OF __________________
SWORN AND SUBSCRIBED before me, the undersigned authority, this ___________day of ____________,
19____________.
_________________________________
Notary Public
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