Insurance companies, like other entities, can only act through it’s agents.  Insurance companies rely on agents to sell their policies, to under write potential insureds, and to investigate and adjust claims.  Insurance companies may be vicariously liable for another’s misconduct if that other person is the insurer’s agent and if that agent acted within the scope of his or her authority.  This is discussed in several cases starting with the 1994 Texas Supreme Court opinion styled, Celtic Life Ins. Co. v. Coats, then the 1979 opinion styled, Royal Globe Ins. Co. v. Bar Consultants, Inc.  This is also discussed in the 1989 Houston 14th Court of Appeals opinion styled, Paramount Nat. Life Ins. Co. v. Williams.
The Texas Supreme Court explained in the Celtic case as follows:  An insurance company is generally liable for any misconduct by an agent that is within the actual or apparent scope of the agent’s authority.  This rule is based on notions of fairness: “since the principal has selected the agent to act in a venture in which the principal is interested, it is fair, as between him and a third person, to impose upon him the risk that the agent may exceed his instructions.”
The analysis for deciding if an agent is vicariously liable for the conduct of another has two steps:

Lawyers who handle life insurance cases need to be aware of the various ways a life insurance agent can be held responsible for wrongful acts.
While an individual agent is subject to being sued under the statutes here is a specific example of that happening.  This is from the 1998 Texas Supreme Court opinion styled, Liberty Mut. Ins. Co. v. Garrison Contractors, Inc.
In the Garrison opinion, an agent personally carried out the transaction that formed the core of the unfair insurance practices complaint.  The agent was responsible for explaining premiums and was required to have a measure of expertise.  He was a “person” engaged in the “business of insurance” and could be liable under the statute.  On the other hand, clerical employees, who have no responsibility for policy sales and servicing and no special insurance expertise, are not “engaged in the insurance business,” and thus would not be personally liable under this rationale.  The same reasoning should apply to other statutes, like the unfair discrimination statute, that include similar defenses.

Texas Life Insurance Attorneys need to be aware of the agency principals whereby an agent can be held liable for his or her actions.
An agent may be liable for violation common-law or statutory duties to the insured.  For example, an agent who undertakes to get insurance may be liable for negligently failing to get proper insurance for the insured.  An example of this is found in the 1987 opinion from the San Antonio Court of Appeals styled, Rainey-Mapes v. Queen Charters, Inc.  An agent may also me liable for negligently failing to notify the insureds that their policy is about to expire.  This is discussed in the 1985 Texas Supreme Court opinion styled, Kitching v. Zamora.
Statutes prohibiting misrepresentations, unfair settlement proctices, and unfair discrimination apply to “any person” engaged in the business of insurance and include agents and brokers.  Statutes on these issues are Sections 541.002(2), 541.151, 544.051(6), and 544.052.

Life insurance lawyers need to know the legal theories whereby a life insurance agent can be held liable for the wrongs they commit.  These agent responsibility don’t just extend to life insurance agents but to agents in other areas of insurance.
As the contracting party, the insurance company of course may be liable based on the contract with the insured.
An insurer also may be statutorily liable.  For example, “any person” engaged in the business of insurance may be liable for unfair insurance practices according to Texas Insurance Code, Section 541.151.  The term “person” is defined to include various insuring entities under Section 541.002(2).

The Texas Insurance Code allows for recovery of mental anguish damages if it can be proven that the illegal conduct of the insurance code was committed knowingly.  Section 541.152 speaks to the knowing conduct.
An award of mental anguish damages may be upheld when the plaintiffs have introduced direct evidence of the nature, duration, and severity  of their mental anguish, thus establishing a substantial disruption in the plaintiffs’ daily routine.  This evidence must come from the claimant’s own testimony, testimony of third parties, or testimony of experts, and is more likely to provide the fact finder with adequate details to assess mental anguish claims.
In the context of applying these standards to an insurance case, the 1996 Texas Supreme Court case styled, Saenz v. Fidelity & Guar. Ins. Underwriters, is a good case to review.

A question for lawyers who handle life insurance claim denials has to do with whether or not mental anguish is recoverable against the life insurance company who denied the claim.  This is addressed in a 1995, Texas Supreme Court opinion styled, State Farm Life Ins. Co. v. Beaston.
In 1982, Terri and David Beaston bought life insurance policies from Ted Heaton, a State Farm Life Insurance Company agent.  The Beastons failed to pay the premium on David’s policy due on December 28, 1983.  His policy lapsed as of December 28, 1983, and the thirty-one day grace period expired on January 28, 1984.  Three days after the expiration of the grace period, David died in an automobile accident.  State Farm refused to pay the benefits under his life insurance policy, claiming that coverage had expired before his death.
Terri brought suit asserting that the Texas Insurance Code had been violated.  She also contended that the terms of the policy guaranteed payment of a dividend at death which should have been used to pay a part of the premium that was in arrears and thereby “cure” the policy’s lapse.

Life insurance attorneys often have to make a decision on whether or not to file suit against the agent who sold a policy.  In that regard, what are the time limits for doing so.
This case involves claims for life insurance benefits and disability benefits.  The policies at issue were purchased in 2005.  A lawsuit was filed in 2018.

Insurance lawyers will often have a case wherein an expert is needed.  When this happens it is important to understand how to get an expert’s testimony admissible in a court proceeding.  Here is a 2023, opinion that discusses expert’s.  It is from the Western District of Texas, Austin Division.  It is styled, Firmus Management And Construction LLC v. Third Coast Insurance Company.
Federal Rule of Evidence 702 sets the standard the admissibility of expert testimony.  Rule 702 provides:
A witness who is qualified as an expert by knowledge, experience, training, or education may testify in the form of an opinion or otherwise if:

Life insurance is an option, as far as this author knows, under all ERISA plans.  Life insurance is treated virtually the same as other benefits under ERISA plans.
This lawsuit is brought under the Employees Retirement Income Security Act of 1974, 29 U.S.C. Section 1001 et seq. (ERISA) after her husband Karthik died in the crash of a relatively small private airplane on which he was a passenger.  Recovery was denied under ERISA because of an express exclusion of death or injury incurred as a passenger in such an aircraft.  Summary judgment was eventually granted in the district court in favor of the defendants.

For life insurance attorneys the topic here is not usually a concern.  However, it will be occasionally and the lawyers need to know about it.  This is a 2023 opinion from the Northern District of Texas, Dallas Division.  The opinion is styled, Lew McGinnis v. Nationwide Life & Annuity Insurance Co.
This a life insurance case that was filed in Texas.  McGinnis asserted that he was a citizen of Texas.  Nationwide filed a Rule 12(b)(1) motion to dismiss contending, inter alia, that the court lacks subject matter jurisdiction because MGinnis was an Oklahoma citizen when the lawsuit was filed.
To establish his Texas citizenship on the date he filed suit, McGinnis must demonstrate that he resided in Texas on that date and intended to continuing residing in Texas.  The relevant factors include the places where the litigant exercises civil and political rights, pays taxes, owns real and personal property, has driver’s and other licenses, maintains bank accounts, belongs to clubs and churches, has places of business or employment, and maintains a home for his family.
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