| (a) Applicability. Sections 5.4231 - 5.4241 of this
title are the mediation process and apply when:
(1) the association has denied coverage for a claim,
in full or in part;
(2) the claimant disputes the denial and gives the
association a notice of intent to file suit; and
(3) the association has requested mediation under the
association policy within the time frame allowed under Insurance Code §2210.575.
(b) Mediation explanation. At the same time the association
requests mediation, the association must give the claimant a notice
explaining the mediation process.
(c) Mediator selection. The association and the claimant
must select a mediator who is qualified under §5.4232 of this
title (relating to Mediation Process - Mediator Qualifications and
Conflicts of Interest). If the parties are unable to agree on a mediator,
either party may request the department to select a mediator. The
party must submit the request under §5.4251 of this title (relating
to Requests and Submissions to the Department), and must include the
following information:
(1) the type of policy;
(2) a description of the claim and, if known, the potential
claim amount;
(3) the association's denial letter;
(4) the policyholder's notice of intention to file
suit; and
(5) any other relevant information that the department
requests.
(d) Representation. The parties may participate in
the mediation without an attorney. Both parties must bring a person
who is authorized to settle the case. An attorney representing the
association may not attend the mediation unless an attorney representing
the claimant participates.
(e) Review information. The parties may ask the mediator
to review any information related to the claim, including itemized
estimates and supporting documents, such as photographs and diagrams.
(f) Rules of evidence. The rules of evidence do not
apply to mediation.
(g) Confidentiality. Unless the parties agree otherwise,
all information revealed in the mediation is part of confidential
settlement negotiations in anticipation of litigation. This includes
any documents presented or created during the mediation.
(1) No one may make audio or visual recordings of the
mediation.
(2) Parties must give any notes, other than a signed
agreement between the parties made during the mediation, to the mediator
to be destroyed.
(3) This rule does not affect the discoverability or
admissibility of documents that are otherwise discoverable or admissible.
(h) Agreement. If the parties reach an agreement in
mediation, they must put the agreement in writing. Both parties must
sign the agreement.
(1) The agreement may include parts of the claim for
which the association accepts coverage.
(2) The agreement may be a partial agreement resolving
some parts of the dispute but not others.
(3) A mediation agreement does not affect rights on
claims for damages that were undetected at the time of the agreement.
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