The rate cuts are the first since 1992. Credit life insurance pays off a loan if the borrower dies. About 75 insurance companies sell credit insurance in Texas. These reductions will save tens of millions of dollars for people who borrow money and insure their loans. He ordered comparable decreases for other types of credit life policies.
Lenders normally add credit insurance premiums to the total amount of a loan.
When they do, Texas law prohibits them from requiring a borrower to buy the coverage from them or from a particular insurer. If it says insurance is not required, ignore claims to the contrary. A company may charge higher rates only if it proves to the Texas Department of Insurance that those rates are justified by excessive losses. TDI issued consent orders on Friday requiring the companies to refund any resulting overcharges to consumers, with interest. The consent orders also require the companies to implement the new rates no later than July 1.