By Dutton                                             H.B. No. 1724
       74R5909 PB-D
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to the use of installment payment plans for premiums
    1-3  required for certain motor vehicle insurance.
    1-4        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-5        SECTION 1.  Subchapter A, Chapter 5, Insurance Code, is
    1-6  amended by adding Article 5.03-3 to read as follows:
    1-7        Art. 5.03-3.  INSTALLMENT PAYMENT OPTION
    1-8        Sec. 1.  APPLICATION.  This article applies to each insurer
    1-9  that is authorized to write private passenger motor vehicle
   1-10  insurance policies in this state, including a county mutual
   1-11  insurance company, a Lloyd's association, an interinsurance
   1-12  exchange, and a reciprocal.
   1-13        Sec. 2.  INSTALLMENT PAYMENT PLAN OPTION.  (a)  Each insurer
   1-14  subject to this article shall offer to each insured or applicant
   1-15  for insurance coverage the option to pay the premiums required for
   1-16  the insurance coverage in installments as provided by this article.
   1-17        (b)  The insurer may not require a down payment on the
   1-18  insurance premium that exceeds 20 percent of the total premium
   1-19  required for the term of the policy.
   1-20        (c)  For a policy with a term of one year, the outstanding
   1-21  balance of the premium must be payable in at least 10 equal monthly
   1-22  installments, beginning with the second month of coverage under the
   1-23  policy.  For a policy with a term of six months, the outstanding
   1-24  balance of the premium must be payable in at least four equal
    2-1  monthly installments, beginning with the second month of coverage
    2-2  under the policy.  For a policy with any other term, the
    2-3  outstanding balance of the premium must be payable in equal monthly
    2-4  installments, beginning with the second month of coverage under the
    2-5  policy, and with the last installment due not earlier than 60 days
    2-6  before the expiration of the term of the policy.
    2-7        (d)  An insurer may not assess interest, a service fee, or
    2-8  any other charge on a policy premium that is paid in installments
    2-9  under this article.
   2-10        Sec. 3.  EXEMPTION.  An insurer is not required to offer an
   2-11  installment payment plan to an insured or applicant for insurance
   2-12  coverage who, during the two years preceding the date of the
   2-13  application for insurance coverage or the renewal of existing
   2-14  insurance coverage, has been a named insured on a private passenger
   2-15  motor vehicle insurance policy canceled for nonpayment of required
   2-16  premiums.
   2-17        SECTION 2.  This Act takes effect September 1, 1995, and
   2-18  applies only to a private passenger motor vehicle insurance policy
   2-19  that is delivered, issued for delivery, or renewed on or after
   2-20  January 1, 1996.  A policy that is delivered, issued for delivery,
   2-21  or renewed before January 1, 1996, is governed by the law as it
   2-22  existed immediately before the effective date of this Act, and that
   2-23  law is continued in effect for that purpose.
   2-24        SECTION 3.  The importance of this legislation and the
   2-25  crowded condition of the calendars in both houses create an
   2-26  emergency and an imperative public necessity that the
   2-27  constitutional rule requiring bills to be read on three several
    3-1  days in each house be suspended, and this rule is hereby suspended.