|
|
A BILL TO BE ENTITLED
|
|
AN ACT
|
|
|
relating to single premium term life insurance offered in |
|
connection with certain consumer loans. |
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
SECTION 1. Subchapter I, Chapter 342, Finance Code, is |
|
amended by adding Section 342.4022 to read as follows: |
|
Sec. 342.4022. SINGLE PREMIUM TERM LIFE INSURANCE. (a) On |
|
a loan made under this chapter that is subject to Subchapter E, a |
|
lender: |
|
(1) may, through a properly licensed insurance agent, |
|
offer a borrower single premium term life insurance; |
|
(2) may not require the borrower to accept the |
|
insurance described by Subdivision (1); |
|
(3) shall provide the borrower with the option to pay |
|
the insurance premium from the borrower's own funds or to pay the |
|
premium with a portion of the loan proceeds; and |
|
(4) before completing the transaction, shall provide |
|
to and review with the borrower a disclosure that specifies: |
|
(A) the total dollar amount of the term life |
|
insurance premium, and a comparison between: |
|
(i) the amount of the payment due on the |
|
loan with the additional purchase of the term life insurance |
|
policy; and |
|
(ii) the amount of the payment due on the |
|
loan without the additional purchase of the term life insurance |
|
policy; and |
|
(B) if there is any shared interest or ownership, |
|
including any common third-party ownership, between the insurance |
|
company and the lender, then the lender must disclose the fact of |
|
the shared interest or ownership. |
|
(b) The finance commission by rule shall prescribe the form |
|
and the content of the disclosures required by Subsection (a)(4). |
|
SECTION 2. Section 342.407, Finance Code, is amended to |
|
read as follows: |
|
Sec. 342.407. REQUIREMENTS FOR INCLUDING INSURANCE CHARGE |
|
IN CONTRACT. Insurance for which a charge is included in a loan |
|
contract must be written: |
|
(1) at lawful rates; |
|
(2) in accordance with the Insurance Code; [and] |
|
(3) by a company authorized to do business in this |
|
state; and |
|
(4) through an insurance agent licensed in accordance |
|
with the Insurance Code, if the included charge is offered under |
|
Section 342.4022 of this code. |
|
SECTION 3. Section 342.412, Finance Code, is amended to |
|
read as follows: |
|
Sec. 342.412. ACTION UNDER SUBCHAPTER NOT SALE OF |
|
INSURANCE. Except for the sale of a single premium term life |
|
insurance policy to a borrower under Section 342.4022, arranging |
|
[Arranging] for insurance or collecting an identifiable charge as |
|
authorized by this subchapter is not a sale of insurance. |
|
SECTION 4. Section 342.4022, Finance Code, as added by this |
|
Act, applies only to an insurance policy that is delivered, issued |
|
for delivery, or renewed on or after January 1, 2016. A policy |
|
delivered, issued for delivery, or renewed before January 1, 2016, |
|
is governed by the law as it existed immediately before the |
|
effective date of this Act, and the former law is continued in |
|
effect for that purpose. |
|
SECTION 5. This Act takes effect January 1, 2016. |
|
|
|
* * * * * |