Relating to refund of excess unearned premiums by insurance premium finance companies.
Impact
If HB1975 is passed, it would directly affect Texas state law by altering the existing regulations around insurance premium financing. The change would mean that consumers could receive larger refunds more readily, as the provision intends to eliminate the previous threshold that allowed finance companies to retain smaller excess amounts. This move could encourage more transparent financial practices within the insurance industry and improve relations between consumers and finance companies.
Summary
House Bill 1975 aims to amend the Insurance Code in Texas specifically concerning the refund process for excess unearned premiums held by insurance premium finance companies. The amendment stipulates that if the crediting of return premiums results in a surplus beyond what is owed by the insured, the finance company is obligated to refund that excess amount to the insured party. Prior to this amendment, there was a threshold of $1 that allowed finance companies to withhold refunds for smaller amounts, but the bill looks to change that to enhance consumer protection by ensuring accountability in the refund process.
Contention
The discussions surrounding HB1975 may involve differing viewpoints regarding consumer rights and the operational flexibility of premium finance companies. Supporters of the bill assert that it offers necessary consumer protections and promotes fairness in the financial transactions related to insurance premiums. Conversely, opponents may argue that such mandates could increase costs or administrative burdens for finance companies, which could be passed on to consumers in other ways. The balance between protecting consumers and ensuring a viable business operation for financial entities is likely to be a point of contention in legislative discussions.
Relating to funding of excess losses and operating expenses of the Texas Windstorm Insurance Association; authorizing an assessment; authorizing a surcharge.