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.