Texas Statutes
Subchapter B. Prompt Payment of Construction Payment Bonds
Section 3503.055. Notice of Acceptance or Rejection of Claim

Sec. 3503.055. NOTICE OF ACCEPTANCE OR REJECTION OF CLAIM. (a) Except as provided by Subsection (c), a surety company shall notify a claimant in writing of the acceptance or rejection of a claim not later than the 30th day after the date the company receives all documents, items of information, accountings, statements, and forms requested by the company under Section 3503.054.
(b) If the surety company rejects all or part of the claim, the notice required by Subsection (a) must state in specific terms the reasons for the rejection that are known by the company at the time of the rejection.
(c) If the surety company is unable to accept or reject the claim within the period specified by Subsection (a), the company, in that same period, shall notify the claimant in writing that the company is unable to accept or reject the claim. The notice provided under this subsection must:
(1) state the reasons for which the company needs additional time to accept or reject the claim; and
(2) include a request for any additional information the company reasonably needs to process the claim.
(d) Not later than the 30th day after the date a surety company notifies a claimant under Subsection (c), the company shall notify the claimant in writing of the acceptance or rejection of the claim. If the company rejects all or part of the claim, the company shall state in specific terms the reasons for the rejection that are known by the company at the time of the rejection.
(e) In addition to any other contractual or statutory basis for denying a claim, the surety company may reject all or part of a claim:
(1) that is the subject of a legitimate dispute between the principal obligor and the claimant; or
(2) for which the claimant has failed to provide supporting documents or information the company reasonably requested.
(f) The time limits provided by this section and Section 3503.054 may be varied by any statute requiring a construction payment bond.
(g) This section does not preclude a surety company from asserting any defense in an action brought by a claimant on a construction payment bond if the company makes a good faith effort to inform the claimant in accordance with this section of the reasons for rejecting all or part of the claim.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 3, eff. April 1, 2007.

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