78R751 DLF-D
By: Martinez Fischer H.B. No. 421
A BILL TO BE ENTITLED
AN ACT
relating to certain credit insurance policies.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter E, Chapter 21, Insurance Code, is
amended by adding Article 21.79A to read as follows:
Art. 21.79A. CREDIT INSURANCE MARKETED IN CONNECTION WITH
CREDIT CARDS
Sec. 1. DEFINITIONS. In this article:
(1) "Credit card" means an identification card or any
other similar item authorizing a designated person to obtain
property or services on credit.
(2) "Credit insurance" includes:
(A) credit life insurance;
(B) credit accident and health or disability
insurance; and
(C) credit involuntary unemployment insurance.
(3) "Insurer" means any insurer authorized to issue
credit insurance in this state. The term includes a Lloyd's plan, a
reciprocal or interinsurance exchange, a county mutual insurer, or
a farm mutual insurer.
Sec. 2. APPLICABILITY. (a) This article applies only to a
policy or group certificate of credit insurance that is marketed to
a resident of this state in connection with:
(1) an application for a credit card;
(2) billing statements for a credit card; or
(3) any other communication directed to the resident
as a holder of or applicant for a credit card.
(b) This article applies only to:
(1) an insurer who issues a policy described by
Subsection (a) of this section; and
(2) a credit card issuer who offers or makes available
the credit insurance described by Subsection (a) of this section.
Sec. 3. REQUIRED RECORDS. (a) The insurer and credit card
issuer shall maintain complete records of the documents that the
insurer or issuer obtains in connection with a policy or group
certificate of credit insurance described by Section 2(a) of this
article, including a copy of:
(1) the application for insurance;
(2) the policy or group certificate issued; and
(3) any claims information.
(b) The records shall be maintained at least until the first
anniversary of the date on which the coverage terminates.
(c) An insured may inspect records maintained under this
section for the policy or group certificate issued to the insured.
On the request of an insured, the insurer or credit card issuer
shall provide the records to the insured. If the records do not
include a copy of the certificate or policy issued to the insured,
the insured may inspect the master policy form under which the
insured is covered and is entitled, on request, to receive a copy of
the master policy form. The person providing copies under this
section may charge a fee for providing the copies. The fee may not
exceed the cost of providing the copies.
(d) The insurer is responsible for ensuring compliance with
this section.
Sec. 4. VIOLATION; REFUND OF PREMIUM REQUIRED; INTEREST.
(a) If a copy of the application for a policy or certificate for an
insured is not maintained as required by Section 3(a) of this
article, the credit card issuer may not charge and the insurer may
not collect or accept any premium or other charge with respect to
the policy or certificate.
(b) If, on request of the insured to inspect or obtain
copies of records under Section 3 of this article, the records do
not include a copy of the application, the insurer or credit card
issuer shall refund to the insured any premium or other charge
collected in relation to the policy, plus interest computed at the
rate of 18 percent a year compounded annually. The insurer and the
credit card issuer are jointly and severally liable to the insured
for any amount owed under this subsection.
Sec. 5. OTHER DUTIES OF INSURER NOT AFFECTED. This article
does not affect the insurer's obligation to:
(1) issue an original policy or certificate to an
insured; or
(2) pay a claim under the policy or certificate, if the
insured has not requested a refund under Section 4 of this article.
Sec. 6. RULES. The commissioner may adopt rules as
necessary to implement this article.
SECTION 2. Article 21.79A, Insurance Code, as added by this
Act, applies only to a policy or group certificate of credit
insurance issued on or after the effective date of this Act. A
policy or group certificate of credit insurance issued before the
effective date of this Act is governed by the law as it existed
immediately before the effective date of this Act, and that law is
continued in effect for that purpose.
SECTION 3. This Act takes effect September 1, 2003.