What is Texas's law on standard of review (erisa)?

De novo unless the plan grants discretion; then abuse-of-discretion applies. (Firestone v. Bruch, 489 U.S. 101 (1989))

Texas law

Long-Term Disability & ERISA Laws in Texas.

Most private long-term disability (LTD) insurance is employer-sponsored and governed by ERISA, which preempts state contract and bad-faith claims. ERISA claims must exhaust internal appeals and are reviewed under a deferential standard if the plan grants discretion. Individual (non-ERISA) policies are governed by Texas contract law and may support the Arnold-standard common-law bad-faith claims, Texas Insurance Code Chapter 541 claims, and Texas Prompt Pay Act penalties.

Last verified: 2026-04-17

State law

Key Texas Statutes

ERISA Preemption29 U.S.C. § 1144

ERISA preempts state-law breach of contract and bad-faith claims for employer-sponsored LTD plans.

Individual Policy Bad Faith (Arnold)Arnold v. National County Mutual, 725 S.W.2d 165 (Tex. 1987)

For non-ERISA individual LTD policies, Texas recognizes common-law bad-faith claims with consequential damages and, for egregious conduct, punitive damages.

Texas Insurance Code Chapter 541Tex. Ins. Code § 541.001 et seq.

Private cause of action for unfair or deceptive acts with up to 3x damages for knowing violations plus attorney fees.

Standard of Review (ERISA)Firestone v. Bruch, 489 U.S. 101 (1989)

De novo unless the plan grants discretion; then abuse-of-discretion applies.

State law

Official Sources

U.S. Department of Labor — EBSA TX Department of Insurance

Not Legal Advice

This page summarizes publicly available statutes and rules for informational purposes only. It does not constitute legal advice, and no attorney-client relationship is created by viewing this content. Laws change — always verify with the primary source or consult a licensed attorney in Texas.

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