Texas 2015 - 84th Regular

Texas House Bill HB3938 Compare Versions

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1	1	By: Longoria (Senate Sponsor - Eltife) H.B. No. 3938
2	2	(In the Senate - Received from the House May 13, 2015;
3	3	May 14, 2015, read first time and referred to Committee on Business
4	4	and Commerce; May 22, 2015, reported adversely, with favorable
5	5	Committee Substitute by the following vote: Yeas 7, Nays 1;
6	6	May 22, 2015, sent to printer.)
7	7	Click here to see the committee vote
8	8	COMMITTEE SUBSTITUTE FOR H.B. No. 3938 By: Eltife
9	9
10	10
11	11	A BILL TO BE ENTITLED
12	12	AN ACT
13	13	relating to single premium term life insurance offered in
14	14	connection with certain consumer loans.
15	15	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
16	16	SECTION 1. Subchapter I, Chapter 342, Finance Code, is
17	17	amended by adding Section 342.4022 to read as follows:
18	18	Sec. 342.4022. SINGLE PREMIUM TERM LIFE INSURANCE. (a) On
19	19	a loan made under this chapter that is subject to Subchapter E, a
20	20	lender:
21	21	(1) may, through a properly licensed insurance agent,
22	22	offer a borrower single premium term life insurance;
23	23	(2) may not require the borrower to accept the
24	24	insurance described by Subdivision (1);
25	25	(3) shall provide the borrower with the option to pay
26	26	the insurance premium from the borrower's own funds or to pay the
27	27	premium with a portion of the loan proceeds; and
28	28	(4) before completing the transaction, shall provide
29	29	to and review with the borrower a disclosure that specifies:
30	30	(A) the total dollar amount of the term life
31	31	insurance premium, and a comparison between:
32	32	(i) the amount of the payment due on the
33	33	loan with the additional purchase of the term life insurance
34	34	policy; and
35	35	(ii) the amount of the payment due on the
36	36	loan without the additional purchase of the term life insurance
37	37	policy; and
38	38	(B) if there is any shared interest or ownership,
39	39	including any common third-party ownership, between the insurance
40	40	company and the lender, then the lender must disclose the fact of
41	41	the shared interest or ownership.
42	42	(b) The finance commission by rule shall prescribe the form
43	43	and the content of the disclosures required by Subsection (a)(4).
44	44	SECTION 2. Section 342.407, Finance Code, is amended to
45	45	read as follows:
46	46	Sec. 342.407. REQUIREMENTS FOR INCLUDING INSURANCE CHARGE
47	47	IN CONTRACT. Insurance for which a charge is included in a loan
48	48	contract must be written:
49	49	(1) at lawful rates;
50	50	(2) in accordance with the Insurance Code; [and]
51	51	(3) by a company authorized to do business in this
52	52	state; and
53	53	(4) through an insurance agent licensed in accordance
54	54	with the Insurance Code, if the included charge is offered under
55	55	Section 342.4022 of this code.
56	56	SECTION 3. Section 342.412, Finance Code, is amended to
57	57	read as follows:
58	58	Sec. 342.412. ACTION UNDER SUBCHAPTER NOT SALE OF
59	59	INSURANCE. Except for the sale of a single premium term life
60	60	insurance policy to a borrower under Section 342.4022, arranging
61	61	[Arranging] for insurance or collecting an identifiable charge as
62	62	authorized by this subchapter is not a sale of insurance.
63	63	SECTION 4. Section 342.4022, Finance Code, as added by this
64	64	Act, applies only to an insurance policy that is delivered, issued
65	65	for delivery, or renewed on or after January 1, 2016. A policy
66	66	delivered, issued for delivery, or renewed before January 1, 2016,
67	67	is governed by the law as it existed immediately before the
68	68	effective date of this Act, and the former law is continued in
69	69	effect for that purpose.
70	70	SECTION 5. This Act takes effect January 1, 2016.
71	71	* * * * *