SRC-JBJ, MWN H.B. 2139 77(R)   BILL ANALYSIS


Senate Research Center   H.B. 2139
77R6324 DWS-FBy: Marchant (Carona)
Business & Commerce
5/7/2001
Engrossed


DIGEST AND PURPOSE 

Under current Texas law, a retail buyer and retail seller may agree in a
motor vehicle retail installment contract to include a separate charge for
a debt cancellation agreement which is insurance coverage that reimburses
the retail buyer with the amount of the difference between the proceeds of
the buyer's basic collision insurance policy on the motor vehicle and the
remaining amount owed on the vehicle, if the vehicle has been rendered a
total loss.  H.B. 2139 provides that a debt cancellation agreement or
waiver included in a retail installment contract is not insurance or an
insurance product or service and that a separate charge for the debt
cancellation agreement or waiver may be included in a retail installment
contract.  

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a
state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 348.208, Finance Code, by redesignating
Subsection (c) as added by Chapter 1559, Acts of the 76th Legislature,
Regular Session, 1999, as Subsection (d) and by adding Subsection (e), as
follows: 
 
(e)  Authorizes a retail installment contract to include as a separate
charge an amount for a debt cancellation agreement or waiver by which, if
the motor vehicle is rendered a total loss, the holder agrees to cancel
indebtedness on the contract in an amount computed by subtracting the
proceeds of the retail buyer's basic collision insurance policy on the
motor vehicle from the amount remaining unpaid under the contract.
Authorizes a holder, in addition to other liability incurred under the debt
cancellation agreement or waiver, to agree to waive the deductible amount,
if any, the retail buyer is required to pay under the policy.  Provides
that a debt cancellation agreement or waiver included in a retail
installment contract as provided by this subsection is not insurance or an
insurance product or service and is not subject to regulation by the
commissioner of insurance or the Texas Department of Insurance. 

SECTION 2. Effective date: upon passage or September 1, 2001.