Texas Statutes
Subchapter F. Powers and Duties of Association Relating
Section 463.260. Limits on and Termination of Association Obligation

Sec. 463.260. LIMITS ON AND TERMINATION OF ASSOCIATION OBLIGATION. (a) The association is not liable for benefits that exceed the contractual obligations for which the insurer is liable or would have been liable if not impaired or insolvent. The association has no obligation to provide benefits outside the express written terms of the policy or contract, including:
(1) claims based on marketing materials;
(2) claims based on side letters, riders, or other documents that were issued without meeting applicable policy form filing or approval requirements;
(3) claims based on misrepresentation of or regarding policy benefits;
(4) extracontractual claims; or
(5) claims for penalties or consequential or incidental damages.
(b) The association's obligations with respect to coverage under a policy of an impaired or insolvent insurer or under a reissued or alternative policy terminate on the date the coverage or policy is replaced by another similar policy by the policyholder, the contract owner, the insured, the enrollee, or the association.
(c) If a premium is not paid before the 32nd day after the date the premium is due under a guaranteed, assumed, alternative, or reissued policy or contract or substitute coverage, the association's obligations under the policy, contract, or coverage terminate, except with respect to a claim incurred or any net cash surrender value due as provided by this chapter.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 730 (H.B. 2636), Sec. 3B.018(d), eff. September 1, 2007.
Acts 2007, 80th Leg., R.S., Ch. 921 (H.B. 3167), Sec. 9.018(d), eff. September 1, 2007.
Acts 2019, 86th Leg., R.S., Ch. 432 (S.B. 1153), Sec. 22, eff. September 1, 2019.

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