Texas House Bill HB1902

Texas 2013 - 83rd Regular

Caption

Relating to the refund of unearned premium for a personal automobile or residential property insurance policy.

Impact

The implementation of HB1902 is expected to reinforce consumer protection mechanisms in the insurance industry. By imposing a strict timeline for insurers to process refunds, the bill aims to reduce financial loss to consumers who cancel their policies. Additionally, it encourages insurers to maintain better operational standards to comply with the new requirements. The law's effect is applicable only to policies delivered, issued for delivery, or renewed on or after September 1, 2013, allowing certain pre-existing policies to remain under the older regulatory framework.

Summary

House Bill 1902 addresses the prompt refund of unearned premiums for personal automobile and residential property insurance policies in Texas. The bill amends Section 558.002 of the Insurance Code to require that insurers refund the appropriate portion of unearned premiums within a specific timeframe - no later than 15 business days after the cancellation or termination of an insurance policy. This change seeks to enhance consumer rights by ensuring that policyholders receive timely refunds when they cancel their policies.

Contention

While the bill generally supports consumer rights, it could face contention regarding its enforcement and the potential costs involved for insurers. Critics may argue that such strict refund requirements could lead to increased operational burdens on insurance companies, possibly resulting in higher premiums for consumers overall. Nonetheless, supporters emphasize the importance of consumer protection and the need for reputable business practices within the insurance sector.