1-1 AN ACT
1-2 relating to certain agreements under a retail installment contract
1-3 for the purchase of a motor vehicle.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 348.208, Finance Code, is amended by
1-6 redesignating Subsection (c) as added by Chapter 1559, Acts of the
1-7 76th Legislature, Regular Session, 1999, as Subsection (d) and by
1-8 adding Subsection (e) to read as follows:
1-9 (d) [
(c)] Notwithstanding any other law, service contracts
1-10 sold by a retail seller of a motor vehicle to a retail buyer are
1-11 not subject to 1.14-1, Insurance Code.
1-12 (e) A retail installment contract may include as a separate
1-13 charge an amount for a debt cancellation agreement or waiver by
1-14 which, if the motor vehicle is rendered a total loss, the holder
1-15 agrees to cancel indebtedness on the contract in an amount computed
1-16 by subtracting the proceeds of the retail buyer's basic collision
1-17 insurance policy on the motor vehicle from the amount remaining
1-18 unpaid under the contract. In addition to other liability incurred
1-19 under the debt cancellation agreement or waiver, a holder may agree
1-20 to waive the deductible amount, if any, the retail buyer is
1-21 required to pay under the policy. A debt cancellation agreement or
1-22 waiver included in a retail installment contract as provided by
1-23 this subsection is not insurance or an insurance product or service
1-24 and is not subject to regulation by the commissioner of insurance
2-1 or the Texas Department of Insurance.
2-2 SECTION 2. This Act takes effect immediately if it receives
2-3 a vote of two-thirds of all the members elected to each house, as
2-4 provided by Section 39, Article III, Texas Constitution. If this
2-5 Act does not receive the vote necessary for immediate effect, this
2-6 Act takes effect September 1, 2001.
President of the Senate Speaker of the House
I certify that H.B. No. 2139 was passed by the House on April
24, 2001, by a non-record vote.
Chief Clerk of the House
I certify that H.B. No. 2139 was passed by the Senate on May
16, 2001, by a viva-voce vote.
Secretary of the Senate