By:  Rosson                                           S.B. No. 1452
                                 A BILL TO BE ENTITLED
                                        AN ACT
    1-1  relating to the use of installment payment plans for premiums
    1-2  required for certain motor vehicle insurance.
    1-3        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-4        SECTION 1.  Subchapter A, Chapter 5, Insurance Code, is
    1-5  amended by adding Article 5.03-3 to read as follows:
    1-6        Art. 5.03-3.  INSTALLMENT PAYMENT OPTION
    1-7        Sec. 1.  APPLICABILITY.  This article applies to each insurer
    1-8  that is authorized to write private passenger motor vehicle
    1-9  insurance policies in this state, including a county mutual
   1-10  insurance company, a Lloyd's association, an interinsurance
   1-11  exchange, and a reciprocal.
   1-12        Sec. 2.  INSTALLMENT PAYMENT PLAN OPTION.  (a)  Each insurer
   1-13  subject to this article shall offer to each insured or applicant
   1-14  for insurance coverage the option to pay the premiums required for
   1-15  the insurance coverage in installments as provided by this article.
   1-16        (b)  The insurer may not require a down payment that exceeds
   1-17  20 percent of the total premium required for the term of the
   1-18  policy.
   1-19        (c)  For a policy with a term of one year, the outstanding
   1-20  balance of the premium must be payable in at least 10 equal monthly
   1-21  installments, beginning no sooner than the second month of coverage
   1-22  under the policy.  For a policy with a term of six months, the
   1-23  outstanding balance of the premium must be payable in at least four
    2-1  equal monthly installments, beginning no sooner than the second
    2-2  month of coverage under the policy.  For a policy with any other
    2-3  term, the outstanding balance of the premium must be payable in
    2-4  equal monthly installments, beginning no sooner than the second
    2-5  month of coverage under the policy, with the last installment due
    2-6  not earlier than 60 days before the expiration of the term of the
    2-7  policy.
    2-8        (d)  An insurer may not assess interest but may charge a
    2-9  service fee not to exceed $4 per payment on a policy premium that
   2-10  is paid in installments under this article.
   2-11        Sec. 3.  EXEMPTION.  An insurer is not required to offer an
   2-12  installment payment plan option to an insured or applicant for
   2-13  insurance coverage who, during the two years preceding the date of
   2-14  the application for insurance coverage or the renewal of existing
   2-15  insurance coverage, has been a named insured on a private passenger
   2-16  motor vehicle insurance policy canceled for nonpayment of required
   2-17  premiums.
   2-18        SECTION 2.  This Act takes effect September 1, 1995, and
   2-19  applies only to a private passenger motor vehicle insurance policy
   2-20  that is delivered, issued for delivery, or renewed on or after
   2-21  January 1, 1996.  A policy that is delivered, issued for delivery,
   2-22  or renewed before January 1, 1996, is governed by the law as it
   2-23  existed immediately before the effective date of this Act, and that
   2-24  law is continued in effect for that purpose.
   2-25        SECTION 3.  The importance of this legislation and the
    3-1  crowded condition of the calendars in both houses create an
    3-2  emergency and an imperative public necessity that the
    3-3  constitutional rule requiring bills to be read on three several
    3-4  days in each house be suspended, and this rule is hereby suspended.