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Advisory 2002-08

Status of Downs Decision - Update #2

On August 16, 2000, the 4 th Court of Appeals in San Antonio issued a revised decision in the case of Downs v. Continental Casualty Co., Cause No. 04-99-00111-CV. That decision held "a carrier waives its right to deny compensability if it fails to comply with section 409.021(a) of the Texas Labor Code by either agreeing to begin the payment of benefits or giving written notice of its refusal to pay within seven days after receiving written notice of an injury."

On June 6, 2002, the Texas Supreme Court affirmed the appellate court decision that Texas Labor Code 409.021 and 409.022 require an insurance carrier to begin benefit payment as required by the Texas Workers' Compensation Act or send a notice of refusal to pay benefits within seven days after it receives written notice of injury. The Court stated that a carrier that fails to take either action has not met the statutory requisite to later contest compensability.

After consultation with the Office of the Attorney General, the Commission is advised that the Downs decision is not final until opportunities for rehearing have been exhausted. The Commission understands that a request for rehearing of that decision will be filed by the insurance carrier party to that case. Therefore, the 7 day "pay or dispute" provision in the Downs case is not final pending the motion for rehearing. In addition, the related Commission's rules, such as those found at 28 TEX. ADMIN. CODE 124.2, 124.3, and 132.17, remain in effect. Those rules may be found at the Commission's web site at www.tdi.texas.gov.

However, while the Downs case continues to be under review by the Court, parties to dispute proceedings at the Commission may present their position regarding whether the carrier satisfied the 7-day "pay or dispute" requirement. The Court's present decision can be reviewed www.supreme.courts.state.tx.us.

Also, an insurance carrier may receive an acknowledgment from TWCC of the insurance carrier's agreement to pay benefits as they accrue and are due. The insurance carrier may check the appropriate box in item number 1 on a TWCC-21 form (hereinafter referred to as "cert 21s") and forward the completed form to Texas Workers' Compensation Commission, 4000 S. IH-35, Cert 21s - MS 93A, Austin, Texas 78704. The form will be acknowledged as temporarily received by TWCC with a special TWCC stamp and then the form will be returned to the insurance carrier via the insurance carrier's representative's box at TWCC's Central Office. The TWCC will acknowledge and return the cert 21s received since the August 16 th court decision and will return them to the insurance carrier representatives. The TWCC will not retain copies of these cert TWCC 21 forms since they are not required to be filed by Commission rules.

As an alternative to filing the paper version of the cert 21s, the Commission will also accept electronic submission of cert 21s via e-mail. The Commission has established the e-mail address of cert21@tdi.texas.gov for the receipt of these filings. The Commission will provide an automated electronic acknowledgment of the receipt of the insurance carrier's submission of electronic cert 21s. Only cert 21s should be submitted to this address. Other forms filed at this address will not be considered filed with the Commission and no action will be taken on those forms. Claim information required to be filed with the Commission via Electronic Data Interchange (EDI) must still be filed in accordance with the accepted EDI standards and protocols.

Signed this 17th day of June, 2002

Richard F. Reynolds, Executive Director

Distribution:
TWCC Staff
Carrier Representatives
Forms Notification List
Public Information List
TWCC Website



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