We hold that failure to comply with the insurance policy notice provision by not providing notice of suit until after a default judgment is final, when the insurer does not otherwise have actual knowledge of the suit, prejudices the insurer as a matter of law and relieves the insurer of liability under the policy. We therefore reverse the judgment of the court of appeals and render judgment that Mr. and Mrs. Cruz take nothing.

Liberty Mut. Ins. Co. v. Cruz, 883 S.W.2d 164, 165 (Tex. 1993).

Does proof of an insurer's actual knowledge of service of process in a suit against its additional insured, when such knowledge is obtained in sufficient time to provide a defense for the insured, establish as a matter of law the absence of prejudice to the insurer from the additional insured's failure to comply with the notice-of-suit provisions of the policy? FN33

    FN33. Crocker, 466 F.3d at 359.

We also answer this question, no.

National Union Fire Ins. Co. of Pittsburgh, PA v. Crocker, 246 S.W.3d 603, 609 (Tex. 2008).

An insurer's actual knowledge of a claim or suit does not preclude a showing of prejudice as a matter of law. In Liberty Mutual Insurance Co. v. Cruz, the supreme court held that “failure to comply with the insurance policy notice provision by not providing notice of suit until after a default judgment is final, when the insurer does not otherwise have actual knowledge of the suit, prejudices the insurer as a matter of law and relieves the insurer of liability under the policy.” 883 S.W.2d 164, 165 (Tex.1993) (emphasis added); see also Harwell, 896 S.W.2d at 174 (holding Harwell's failure to notify State Farm of the suit against Hubbard's estate prejudiced State Farm as a matter of law). But in Crocker-without mentioning Cruz-the supreme court indicated that even if an insurer has actual knowledge of a suit against its insured, the insurer is not precluded from showing prejudice as a matter of law: “The question ... is ... whether National Union ... should be estopped to deny coverage because it was aware that Morris had been sued and served and had ample time to defend him. The answer must be ‘no.’ ” 246 S.W.3d at 609; see also Md. Cas. Co. v. Am. Home Assur. Co., 277 S.W.3d 107, 117 n. 19 (Tex.App.-Houston [1st Dist.] 2009, pet. filed) (recognizing Crocker's implicit overruling of the “actual knowledge of suit” language in Cruz ). Thus, under Crocker, the fact that State and Country had actual knowledge of Garry's suit against Mark does not preclude proof of prejudice as a matter of law.
  
The question, then, is whether State and County proved prejudice as a matter of law. For the answer, we turn again to Crocker. The supreme court distinguished between late notice, as in PAJ, and no notice, as in Crocker and the case before us: “In the pending case, however, the additional insured's notice was not merely late; it was wholly lacking. PAJ's notice was tardy; Morris's was nonexistent.” Crocker, 246 S.W.3d at 609. The court further stated that National Union was “obviously prejudiced in the sense that it was exposed to a $1 million judgment.” Id. After receiving the supreme court's answers to its certified questions, the fifth circuit reversed and remanded with instructions to render a take-nothing judgment in favor of National Union, holding,

It is clear from the opinion of the Texas Supreme Court that, because Morris never gave National Union any notice of the suit, never complied with the National Union policy's relevant notice provisions, never furnished it copies of any relevant papers as required by the policy, and never in any manner requested a defense from National Union, that National Union owed no duty to defend Morris, or to sua sponte notify him that its policy covered him, and was entitled to rely on its policy provisions precluding coverage on the basis of such noncompliance.

Crocker v. Nat'l Union Fire Ins. Co., 526 F.3d 240, 241 (5th Cir.2008) (per curiam).
  
In the pending case, as in Crocker, Mark's notice is not merely late; it is wholly lacking. Just as National Union's actual knowledge of the suit against Morris did not preclude proof of prejudice, State and County's actual knowledge of the suit against Mark does not preclude proof of prejudice. And just as National Union was “obviously” prejudiced by the rendition of a $1 million judgment against Morris, State and County was prejudiced by the $650,000 judgment rendered against Mark. We hold that Mark's failure to comply with the policy's notice-of-suit provision prejudiced State and County as a matter of law.

Jenkins v. State And County Mut. Fire Ins. Co., 287 S.W.3d 891, 898-899 (Tex.App. — Fort Worth 2009, pet.den.).

    `When I use a word,' Humpty Dumpty said, in rather a scornful tone, `it means just what I choose it to mean -- neither more nor less.'
  
    `The question is,' said Alice, `whether you can make words mean so many different things.'
  
    `The question is,' said Humpty Dumpty, `which is to be master -- that's all.'

Lewis Carroll, Through the Looking Glass, CHAPTER VI, HUMPTY DUMPTY, http://www.sabian.org/Alice/lgchap06.htm