Texas 2009 - 81st Regular

Texas House Bill HB2451 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	81R11238 AJA-F
2	2	By: Eiland H.B. No. 2451
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to insurance premium finance agreements regulated by the
8	8	Texas Department of Insurance.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Section 651.001(5), Insurance Code, is amended
11	11	to read as follows:
12	12	(5) "Insurer" means an entity organized or authorized
13	13	to engage in the business of insurance under this code as a capital
14	14	stock insurance company, title insurance company, reciprocal or
15	15	interinsurance exchange, Lloyd's plan, fraternal benefit society,
16	16	mutual or mutual assessment company of any kind, statewide mutual
17	17	assessment company, local mutual aid association, burial
18	18	association, county or farm mutual insurance company, fidelity,
19	19	guaranty, or surety company, [or] trust company, or eligible
20	20	surplus lines insurer. The term includes:
21	21	(A) the Texas Windstorm Insurance Association;
22	22	(B) the Texas Automobile Insurance Plan
23	23	Association; and
24	24	(C) the Texas Medical Liability Insurance
25	25	Underwriting Association.
26	26	SECTION 2. Section 651.151(b), Insurance Code, is amended
27	27	to read as follows:
28	28	(b) A premium finance agreement must be dated and signed by
29	29	the insured. [An agreement may be signed on behalf of the insured
30	30	by the insured's agent if:
31	31	[(1) the agreement contains policies for other than
32	32	personal, family, or household purposes; and
33	33	[(2) the premiums for the policies exceed $1,000.]
34	34	SECTION 3. Section 651.155, Insurance Code, is amended to
35	35	read as follows:
36	36	Sec. 651.155. RESPONSIBILITIES OF INSURANCE AGENT AND
37	37	INSURANCE PREMIUM FINANCE COMPANY. (a) Each insurance premium
38	38	finance company is responsible for the acts of its officers,
39	39	directors, employees, and contracted insurance agents.
40	40	(b) An insurance premium finance company must have a written
41	41	contract with each [An] insurance agent that requires the agent, at
42	42	a minimum, to [shall]:
43	43	(1) prepare a premium finance agreement; [and]
44	44	(2) deliver to the insured each disclosure statement
45	45	required by law; and
46	46	(3) timely remit or forward insurance premiums to the
47	47	insurance premium finance company or appropriate insurer.
48	48	SECTION 4. Section 651.161, Insurance Code, is amended by
49	49	adding Subsection (g) to read as follows:
50	50	(g) The insurance premium finance company may not cancel an
51	51	insurance contract if the insurance agent failed to timely remit or
52	52	forward insurance premiums to the insurance premium finance company
53	53	or appropriate insurer.
54	54	SECTION 5. Section 651.162, Insurance Code, is amended by
55	55	amending Subsections (c), (d), (f), and (g), and by adding
56	56	Subsection (h) to read as follows:
57	57	(c) The insurer may not deduct from the unearned premiums
58	58	returned to the insurance premium finance company the amount of any
59	59	unearned commission due from the agent writing the insurance [if
60	60	the insurer notifies the agent to return the unearned commission to
61	61	the insurance premium finance company. If the agent does not return
62	62	the unearned commission to the insurance premium finance company
63	63	before the 91st day after the cancellation date, the insurer shall
64	64	remit the unearned commission to the insurance premium finance
65	65	company before the 121st day after the cancellation date].
66	66	(d) Notwithstanding Subsection (c) [Subsections (a)-(c)],
67	67	an agent is liable for the return of unearned commissions on an
68	68	insurance contract written through the Texas Windstorm Insurance
69	69	Association, the Texas Automobile Insurance Plan Association, or
70	70	the Texas Medical Liability Insurance Underwriting Association. An
71	71	agent placing business through one of those plans shall return the
72	72	unearned commissions to the insurance premium finance company
73	73	before the 61st day after the date the agent is notified of the
74	74	cancellation.
75	75	(f) If the insurance premium finance company failed to
76	76	comply with Section 651.165, the insurer shall determine, not later
77	77	than the 30th day after the cancellation date, whether it has a[,
78	78	including the Texas Windstorm Insurance Association, the Texas
79	79	Automobile Insurance Plan Association, and the Texas Medical
80	80	Liability Insurance Underwriting Association, may comply with its]
81	81	legal duty to return the unearned premiums due under the insurance
82	82	contract to an [the] insurance premium finance company before [by]
83	83	returning those unearned premiums to the producing agent. If the
84	84	producing agent does not return unearned premiums to the insurance
85	85	premium finance company before the 91st day after the cancellation
86	86	date, the insurer remains liable and shall remit, on demand, the
87	87	unearned premiums to the insurance premium finance company not
88	88	later than the 60th day after the date of the demand.
89	89	(g) If the crediting of return premiums and commissions to
90	90	the account of an insured results in a surplus over the amount due
91	91	from the insured, the insurance premium finance company shall
92	92	refund the excess to the insured. If the amount of the excess is
93	93	less than $5 [$1], the insured is not entitled to a refund.
94	94	(h) The insurance premium finance company may not hold the
95	95	insured liable for any amount covered by the unearned premium or
96	96	unearned commission returned, or to be returned, by the insurer.
97	97	SECTION 6. The heading to Section 651.165, Insurance Code,
98	98	is amended to read as follows:
99	99	Sec. 651.165. REQUIRED NOTICE OF CERTAIN PREMIUM FINANCE
100	100	AGREEMENTS AND PREMIUM FINANCE FUNDS.
101	101	SECTION 7. Section 651.165, Insurance Code, is amended by
102	102	amending Subsections (a) and (b) and by adding Subsection (d) to
103	103	read as follows:
104	104	(a) An insurance premium finance company that enters into a
105	105	premium finance agreement that includes an assignment or power of
106	106	attorney shall notify the insurer [or the Texas Windstorm Insurance
107	107	Association, the Texas Automobile Insurance Plan Association, or
108	108	the Texas Medical Liability Insurance Underwriting Association]
109	109	whose premiums are being financed:
110	110	(1) of the existence of the agreement; and
111	111	(2) of the information required under Section
112	112	651.151(c) [to whom the premium payment has been made].
113	113	(b) An insurance premium finance company shall [notify and]
114	114	fund all premiums to the insurer [a county mutual insurance
115	115	company] unless the insurance premium finance company is authorized
116	116	in writing by the insurer [county mutual insurance company] to
117	117	[notify or] fund an insurance agent or managing general agent.
118	118	(d) If the insurer authorizes the insurance premium finance
119	119	company to fund premiums to an insurance agent or managing general
120	120	agent, the insurer is liable for the insurance premium if the
121	121	insurance agent does not timely remit or forward the insurance
122	122	premium to the insurance premium finance company or appropriate
123	123	insurer.
124	124	SECTION 8. Section 651.162(e), Insurance Code, is repealed.
125	125	SECTION 9. The changes in law made by this Act apply only to
126	126	an insurance premium finance agreement entered into on or after the
127	127	effective date of this Act. An insurance premium finance agreement
128	128	that is entered into before the effective date of this Act is
129	129	governed by the law in effect on the date the insurance premium
130	130	finance agreement was entered, and that law is continued in effect
131	131	for that purpose.
132	132	SECTION 10. This Act takes effect immediately if it
133	133	receives a vote of two-thirds of all the members elected to each
134	134	house, as provided by Section 39, Article III, Texas Constitution.
135	135	If this Act does not receive the vote necessary for immediate
136	136	effect, this Act takes effect September 1, 2009.