Litigation

To prevent the "misdirection, misapplication and improper use of insurance settlement payments" by claimants' representatives, Texas Insurance Commissioner Mike Geeslin asks insurers to implement "payee notification" policies.

In its August 31, 2010 bulletin posted on the Texas Department of Insurance (TDI) website, Geeslin noted that TDI "strongly encourages" all insurance companies issuing settlement payments payable to both the claimant and the claimant's representative to provide written notification to the claimant when the payment is issued to his or her representative.

Geeslin issued the bulletin at the request of the State Bar of Texas, which maintains a Client Security Fund (CSF) that pays a claimant up to $30,000 when the claimant's lawyer takes his or her money from a personal-injury settlement.

David Durden, TDI's associate commissioner for public affairs, says the intent of the bulletin is "to hopefully cut down on a problem" that the State Bar is aware of regarding the misapplication of claimants' settlement funds. Durden says that TDI was not aware of the issue until the State Bar brought it to the agency's attention.

More  COMMISSIONER'S BULLETIN #B-0035-10

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