By: Seaman H.B. No. 2965
A BILL TO BE ENTITLED
AN ACT
relating to insurance premium finance agreements.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 651.051, Insurance Code, is amended to
read as follows:
Sec. 651.051. LICENSE REQUIRED. (a) Unless the person is a
license holder, a person may not:
(1) negotiate, transact, or engage in the business of
insurance premium financing in this state; or
(2) contract for, charge, or receive directly or
indirectly on or in connection with an insurance premium financing
any charge, regardless of whether the charge is for interest,
compensation, consideration, expense, or otherwise, if in the
aggregate the amount of the charge exceeds the amount the person
would be permitted by law to charge if the person were not a license
holder.
(b) This subchapter does not apply to a person who purchases
or otherwise acquires a premium finance agreement from a licensee
if the licensee retains the right to service the agreement and to
collect payments due under the agreement and remains responsible
for servicing the premium finance agreement in compliance with this
chapter.
SECTION 2. Section 651.158, Insurance Code, is amended to
read as follows:
Sec. 651.158. PREPAYMENT AND REFUND. (a) Notwithstanding
the provisions of any premium finance agreement to the contrary, an
insured may pay the balance due under the agreement in full at any
time before the maturity of the final installment of the balance.
(b) If an insured pays a premium finance agreement in full
as authorized by this section and the agreement included an amount
for a charge, the insured is entitled to receive for the prepayment
by cash or renewal a refund credit in accordance with Subchapter H,
Chapter 342, Finance Code, and rules adopted under that subchapter.
If the amount of the credit for prepayment is less than $5 [$1], the
insured is not entitled to a refund credit.
SECTION 3. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2005.