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A BILL TO BE ENTITLED
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AN ACT
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relating to single premium term life insurance offered in |
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connection with certain consumer loans. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter I, Chapter 342, Finance Code, is |
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amended by adding Section 342.4022 to read as follows: |
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Sec. 342.4022. SINGLE PREMIUM TERM LIFE INSURANCE. On a |
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loan made under this chapter that is subject to Subchapter E, a |
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lender: |
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(1) may, through a properly licensed insurance agent, |
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offer a borrower single premium term life insurance; |
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(2) may not require the borrower to accept the |
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insurance described by Subdivision (1); and |
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(3) shall provide the borrower with the option to pay |
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the insurance premium from the borrower's own funds or to pay the |
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premium with a portion of the loan proceeds. |
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SECTION 2. Section 342.407, Finance Code, is amended to |
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read as follows: |
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Sec. 342.407. REQUIREMENTS FOR INCLUDING INSURANCE CHARGE |
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IN CONTRACT. Insurance for which a charge is included in a loan |
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contract must be written: |
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(1) at lawful rates; |
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(2) in accordance with the Insurance Code; [and] |
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(3) by a company authorized to do business in this |
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state; and |
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(4) through an insurance agent licensed in accordance |
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with the Insurance Code, if the included charge is offered under |
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Section 342.4022 of this code. |
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SECTION 3. Section 342.412, Finance Code, is amended to |
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read as follows: |
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Sec. 342.412. ACTION UNDER SUBCHAPTER NOT SALE OF |
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INSURANCE. Except for the sale of a single premium term life |
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insurance policy to a borrower under Section 342.4022, arranging |
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[Arranging] for insurance or collecting an identifiable charge as |
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authorized by this subchapter is not a sale of insurance. |
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SECTION 4. Section 342.4022, Finance Code, as added by this |
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Act, applies only to an insurance policy that is delivered, issued |
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for delivery, or renewed on or after January 1, 2016. A policy |
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delivered, issued for delivery, or renewed before January 1, 2016, |
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is governed by the law as it existed immediately before the |
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effective date of this Act, and the former law is continued in |
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effect for that purpose. |
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SECTION 5. This Act takes effect January 1, 2016. |