Texas Insurance Code 542A.006 – Action Against Agent; Insurer Election of Legal Responsibility
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(a) Except as provided by Subsection (h), in an action to which this chapter applies, an insurer that is a party to the action may elect to accept whatever liability an agent might have to the claimant for the agent’s acts or omissions related to the claim by providing written notice to the claimant.
(b) If an insurer makes an election under Subsection (a) before a claimant files an action to which this chapter applies, no cause of action exists against the agent related to the claimant’s claim, and, if the claimant files an action against the agent, the court shall dismiss that action with prejudice.
Terms Used In Texas Insurance Code 542A.006
- Defendant: In a civil suit, the person complained against; in a criminal case, the person accused of the crime.
- Deposition: An oral statement made before an officer authorized by law to administer oaths. Such statements are often taken to examine potential witnesses, to obtain discovery, or to be used later in trial.
- Dismissal: The dropping of a case by the judge without further consideration or hearing. Source:
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Testimony: Evidence presented orally by witnesses during trials or before grand juries.
- Trial: A hearing that takes place when the defendant pleads "not guilty" and witnesses are required to come to court to give evidence.
- Written: includes any representation of words, letters, symbols, or figures. See Texas Government Code 311.005
(c) If a claimant files an action to which this chapter applies against an agent and the insurer thereafter makes an election under Subsection (a) with respect to the agent, the court shall dismiss the action against the agent with prejudice.
(d) If an insurer makes an election under Subsection (a) but, after having been served with a notice of intent to take a deposition of the agent who is the subject of the election, fails to make that agent available at a reasonable time and place to give deposition testimony, Sections 542A.007(a), (b), and (c) do not apply to the action with respect to which the insurer made the election unless the court finds that:
(1) it is impracticable for the insurer to make the agent available due to a change in circumstances arising after the insurer made the election under Subsection (a);
(2) the agent whose liability was assumed would not have been a proper party to the action; or
(3) obtaining the agent’s deposition testimony is not warranted under the law.
(e) An insurer’s election under Subsection (a) is ineffective to obtain the dismissal of an action against an agent if the insurer’s election is conditioned in a way that will result in the insurer avoiding liability for any claim-related damage caused to the claimant by the agent’s acts or omissions.
(f) An insurer may not revoke, and a court may not nullify, an insurer’s election under Subsection (a).
(g) If an insurer makes an election under Subsection (a) and the agent is not a party to the action, evidence of the agent’s acts or omissions may be offered at trial and, if supported by sufficient evidence, the trier of fact may be asked to resolve fact issues as if the agent were a defendant, and a judgment against the insurer must include any liability that would have been assessed against the agent. To the extent there is a conflict between this subsection and Chapter 33, Civil Practice and Remedies Code, this subsection prevails.
(h) If an insurer is in receivership at the time the claimant commences an action against the insurer, the insurer may not make an election under Subsection (a), and the court shall disregard any prior election made by the insurer relating to the claimant’s claim.
(i) In an action tried by a jury, an insurer’s election under Subsection (a) may not be made known to the jury.