Texas Administrative Code Title 28 - INSURANCE
Overview: Texas Administrative Code Title 28 – Insurance
Title 28 of the Texas Administrative Code governs the regulation of the insurance industry in Texas. It contains rules and regulations issued by the Texas Department of Insurance (TDI), which oversees insurance companies, agents, adjusters, and other industry participants to ensure compliance with the Texas Insurance Code and to protect consumers.
Purpose and Scope
Protect consumers by regulating insurance companies and agents.
Promote a stable insurance market in Texas.
Enforce laws related to licensing, market conduct, rate regulation, claims handling, and financial solvency.
Provide guidelines for fair treatment of policyholders.
Structure and Key Areas of Title 28
1. Licensing and Regulation of Agents and Companies
Requirements for obtaining and renewing licenses.
Continuing education requirements.
Procedures for suspension, revocation, or denial of licenses.
Standards of conduct and ethical requirements for licensees.
2. Market Conduct and Consumer Protection
Rules governing unfair trade practices, misrepresentation, and fraud.
Guidelines for claims processing timelines and practices.
Consumer complaint handling procedures.
Prohibition of discriminatory practices.
3. Financial Regulation and Solvency
Minimum capital and surplus requirements for insurance companies.
Financial reporting and examination requirements.
Risk-based capital rules.
Rehabilitation and liquidation procedures for insolvent insurers.
4. Rate and Form Regulation
Filing requirements for insurance rates and policy forms.
Standards for rate adequacy and fairness.
Procedures for approval or disapproval of policy forms.
Rules on cancellation and non-renewal notices.
5. Specific Lines of Insurance
Separate chapters address particular types of insurance like property and casualty, life and health, workers’ compensation, and title insurance.
Specialized rules for coverage requirements, underwriting standards, and policyholder rights.
Key Provisions Explained
Licensing and Continuing Education
Insurance agents must be licensed by TDI and fulfill specific education and exam requirements.
Title 28 outlines required continuing education credits and acceptable courses.
Licensees must report criminal convictions and disciplinary actions promptly.
Market Conduct and Claims Handling
Insurers must handle claims promptly, fairly, and in good faith.
Rules specify timeframes for acknowledging claims, investigating, and payment.
Unfair claim settlement practices include denial without reasonable investigation and lowball offers.
Consumer complaints to TDI trigger investigations, and insurers must cooperate fully.
Rate and Form Filings
Insurance companies must file rates and policy forms with TDI for review.
Rates must not be excessive, inadequate, or unfairly discriminatory.
Form filings ensure policy language complies with statutory requirements and is understandable to consumers.
Financial Solvency and Examinations
Insurers must maintain adequate financial reserves.
TDI conducts regular financial examinations and may require corrective action.
Insolvent insurers are subject to rehabilitation or liquidation under the Texas Insurance Code.
Relevant Texas Case Law Related to Title 28
1. Dairyland County Mutual Insurance Co. v. Ledesma, 131 S.W.3d 747 (Tex. 2004)
Issue: Whether an insurer acted in bad faith in handling a claim.
Holding: Courts look to compliance with insurance regulations and statutes for evidence of good faith.
Relevance: Highlights how Title 28’s market conduct rules affect insurer liability for bad faith.
2. Texas Department of Insurance v. Texas Workers' Compensation Insurance Facility, 221 S.W.3d 646 (Tex. App. 2007)
Issue: Regulation of insurance rates and agency authority.
Holding: The TDI’s rate approval process must follow statutory guidelines under Title 28.
Relevance: Affirms the regulatory framework for rate filings under Title 28.
3. TEX. INS. CODE § 541.060 (Unfair Settlement Practices) Cases
Issue: Unfair claim settlement practices.
Holding: Courts have consistently used Title 28 rules to interpret unfair trade practices and uphold consumer protections.
Relevance: Title 28 regulations guide enforcement actions against insurers violating settlement standards.
4. Texas Mutual Insurance Co. v. Ruttiger, 381 S.W.3d 430 (Tex. 2012)
Issue: Interpretation of workers’ compensation insurance regulations.
Holding: The Texas Supreme Court referenced Title 28 rules in clarifying regulatory compliance.
Relevance: Demonstrates Title 28’s role in specific insurance lines enforcement.
Enforcement and Oversight
The Texas Department of Insurance enforces Title 28 regulations.
TDI investigates complaints, conducts market conduct exams, audits financial condition, and disciplines licensees.
Violations can result in fines, license suspension or revocation, and corrective orders.
Consumers may also bring private lawsuits citing violations of Title 28 standards.
Summary Table
| Area | Key Provisions | Relevant Case Law |
|---|---|---|
| Licensing | Licensing requirements, CE, ethical standards | - |
| Market Conduct | Claims handling, unfair trade practices, consumer complaints | Dairyland v. Ledesma; §541.060 cases |
| Financial Solvency | Capital requirements, exams, rehabilitation | Texas Mutual v. Ruttiger |
| Rate and Form Filings | Filing, approval, non-discrimination | TDI v. Texas Workers' Compensation Facility |
| Specific Lines | Workers comp, life, health, property & casualty | Texas Mutual v. Ruttiger |
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