77R10949 DLF-D
By Martinez Fischer, Moreno of Harris H.B. No. 1404
Substitute the following for H.B. No. 1404:
By Moreno of Harris C.S.H.B. No. 1404
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to certain credit insurance policies.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subchapter E, Chapter 21, Insurance Code, is
1-5 amended by adding Article 21.79A to read as follows:
1-6 Art. 21.79A. CREDIT INSURANCE MARKETED IN CONNECTION WITH
1-7 CREDIT CARDS
1-8 Sec. 1. DEFINITIONS. In this article:
1-9 (1) "Credit card" means an identification card or any
1-10 other similar item authorizing a designated person to obtain
1-11 property or services on credit.
1-12 (2) "Credit insurance" includes:
1-13 (A) credit life insurance;
1-14 (B) credit accident and health or disability
1-15 insurance; and
1-16 (C) credit involuntary unemployment insurance.
1-17 (3) "Insurer" means any insurance company authorized
1-18 to issue credit insurance in this state. The term includes a
1-19 Lloyd's plan, a reciprocal or interinsurance exchange, a county
1-20 mutual insurance company, or a farm mutual insurance company.
1-21 Sec. 2. APPLICABILITY. (a) This article applies only to a
1-22 policy or group certificate of credit insurance that is marketed to
1-23 a resident of this state in connection with:
1-24 (1) an application for a credit card;
2-1 (2) billing statements for a credit card; or
2-2 (3) any other communication directed to the resident
2-3 as a holder of or applicant for a credit card.
2-4 (b) This article applies only to:
2-5 (1) an insurer who issues a policy described by
2-6 Subsection (a) of this section; and
2-7 (2) a credit card issuer who offers or makes available
2-8 the credit insurance described by Subsection (a) of this section.
2-9 Sec. 3. REQUIRED RECORDS. (a) The insurer and credit card
2-10 issuer shall maintain complete records of the documents that the
2-11 insurer or issuer obtains in connection with a policy or group
2-12 certificate of credit insurance described by Section 2(a) of this
2-13 article, including a copy of:
2-14 (1) the application for insurance;
2-15 (2) the policy or group certificate issued; and
2-16 (3) any claims information.
2-17 (b) The records shall be maintained at least until the first
2-18 anniversary of the date on which the coverage terminates.
2-19 (c) An insured may inspect records maintained under this
2-20 section for the policy or group certificate issued to the insured.
2-21 On the request of an insured, the insurer or credit card issuer
2-22 shall provide the records to the insured. If the records do not
2-23 include a copy of the certificate or policy issued to the insured,
2-24 the insured may inspect the master policy form under which the
2-25 insured is covered and is entitled, on request, to receive a copy
2-26 of the master policy form. The person providing copies under this
2-27 section may charge a fee for providing the copies. The fee may not
3-1 exceed the cost of providing the copies.
3-2 (d) The insurer is responsible for ensuring compliance with
3-3 this section.
3-4 Sec. 4. VIOLATION; REFUND OF PREMIUM REQUIRED; INTEREST. (a)
3-5 If a copy of the application for a policy or certificate for an
3-6 insured is not maintained as required by Section 3(a) of this
3-7 article, the credit card issuer may not charge and the insurer may
3-8 not collect or accept any premium or other charge with respect to
3-9 the policy or certificate.
3-10 (b) If, on request of the insured to inspect or obtain
3-11 copies of records under Section 3 of this article, the records do
3-12 not include a copy of the application, the insurer or credit card
3-13 issuer shall refund to the insured any premium or other charge
3-14 collected in relation to the policy, plus interest computed at the
3-15 rate of 18 percent a year compounded annually. The insurer and the
3-16 credit card issuer are jointly and severally liable to the insured
3-17 for any amount owed under this subsection.
3-18 Sec. 5. OTHER DUTIES OF INSURER NOT AFFECTED. This article
3-19 does not affect the insurer's obligation to:
3-20 (1) issue an original policy or certificate to an
3-21 insured; or
3-22 (2) pay a claim under the policy or certificate, if
3-23 the insured has not requested a refund under Section 4 of this
3-24 article.
3-25 Sec. 6. RULES. The commissioner may adopt rules as
3-26 necessary to implement this article.
3-27 SECTION 2. Article 21.79A, Insurance Code, as added by this
4-1 Act, applies only to a policy or group certificate of credit
4-2 insurance issued on or after the effective date of this Act. A
4-3 policy or group certificate of credit insurance issued before the
4-4 effective date of this Act is governed by the law as it existed
4-5 immediately before the effective date of this Act, and that law is
4-6 continued in effect for that purpose.
4-7 SECTION 3. This Act takes effect September 1, 2001.