Relating to refund of excess unearned premiums by insurance premium finance companies.
Impact
Should SB1465 be enacted, it will have a direct impact on the financial practices of insurance premium finance companies operating in Texas. Specifically, these companies will now be obligated to monitor and manage the refund process more closely. Insured individuals will benefit from potentially receiving more refunds than previously, particularly for small overpayments. This change is expected to improve transparency and accountability within the insurance financing sector, potentially fostering a greater sense of trust among consumers.
Summary
SB1465 proposes an amendment to Section 651.162 of the Texas Insurance Code, specifically addressing the matter of excess unearned premiums that insurance premium finance companies hold. The bill mandates that these companies are required to refund any surplus that results from the crediting of return premiums to the insured's account. Previously, the threshold for such refunds was set at $1, and this bill increases the threshold to $5, meaning only amounts exceeding this new threshold would be refunded to the insured. The key aim of this legislative change is to enhance consumer rights regarding their financial dealings with insurance companies.
Contention
As of now, there appears to be minimal contention surrounding SB1465. The bill has gained support mainly from consumer advocacy groups who see it as a positive step towards safeguarding consumer interests. However, there could be concerns expressed by insurance premium finance companies regarding the operational impact of increased refund requests and administrative burdens that may accompany this change. The bill's relatively straightforward nature may help it gain bipartisan support, but the discussions could highlight the tension between consumer rights and regulatory burdens on finance companies.