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A BILL TO BE ENTITLED
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AN ACT
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relating to certain refund requirements regarding credit |
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insurance. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 1153.202, Insurance Code, is amended by |
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amending Subsection (a) and adding Subsections (a-1) and (a-2) to |
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read as follows: |
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(a) Each individual policy or group policy and group |
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certificate must include a written notice stating [shall provide] |
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that: |
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(1) if the underlying debt or the insurance terminates |
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before the originally scheduled termination [maturity] date of the |
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insurance [debt], including the termination of a debt by renewing |
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or refinancing the debt, the debtor shall be entitled to a refund of |
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unearned premium; and |
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(2) in the event that the underlying debt or the |
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insurance terminates before the originally scheduled termination |
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date of the insurance, including the termination of a debt by |
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renewing or refinancing the debt, the person who is the holder of |
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the underlying debt instrument on the date the debt terminates |
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shall, no later than 60 days after the termination of the insurance, |
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provide notice to the insurer of the termination of the debt, that |
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includes the name and address of the insured and the payoff date of |
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the underlying debt. |
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(a-1) The refund of any amount of unearned premium paid by |
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or charged to the debtor for insurance shall be paid or credited |
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promptly to the person entitled to the refund no later than 30 days |
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after receipt of the notice required to be sent to the insurer under |
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Subsection (a)(2). |
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(a-2) In any claim or action asserted by an insured against |
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an insurer for failure to refund any unearned premium in accordance |
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with this section, the insurer shall be entitled to indemnity from a |
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holder who failed to provide the notice required under Subsection |
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(a)(2). |
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SECTION 2. This Act applies only to a credit life or credit |
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accident and health insurance policy evidenced by an individual |
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policy or group certificate of insurance that is delivered, issued |
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for delivery, or renewed on or after January 1, 2008. A policy or |
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certificate delivered, issued for delivery, or renewed before |
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January 1, 2008, is governed by the law as it existed immediately |
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before the effective date of this Act, and that law is continued in |
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effect for that purpose. |
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SECTION 3. This Act takes effect September 1, 2007. |