Texas Administrative Code › Title 7 - BANKING AND SECURITIES › Part 5 - OFFICE OF CONSUMER CREDIT COMMISSIONER › Chapter 84 - MOTOR VEHICLE INSTALLMENT SALES › Subchapter C - INSURANCE AND DEBT CANCELLATION AGREEMENTS › Section 84.302 - Authorized Credit Insurance and Debt Cancellation Agreements

Current through Reg. 49, No. 28; July 12, 2024
(a) Purpose. This
				  section only applies to a motor vehicle retail installment sales transaction
				  under Texas Finance Code, Chapter 348 where a charge for insurance or debt
				  cancellation agreement is included in the balance due under the retail
				  installment sales contract. This section does not apply to insurance sold
				  outside of the retail installment sales transaction.
(b) Authorized credit insurance. Authorized
				  credit insurance includes credit life, credit accident and health insurance,
				  credit involuntary unemployment insurance, and dual-interest gap insurance. The
				  retail seller may but is not required to offer the authorized credit insurance
				  products described in this section.
(c) Decreasing term coverage for credit life,
				  credit accident and health, and involuntary unemployment insurance. Credit life
				  insurance, credit accident and health insurance, and involuntary unemployment
				  insurance written in connection with a Texas Finance Code, Chapter 348 motor
				  vehicle retail installment sales contract must be decreasing term
				  insurance.
(d) Lawful rates and
				  terms for credit life and credit accident and health insurance. Credit life
				  insurance and credit accident and health insurance must be written in
				  compliance with Texas Insurance Code, Chapters 1131 and 1153, and any
				  regulations issued by the Texas Department of Insurance under the authority of
				  those provisions.
(e) Lawful rates
				  and terms for involuntary unemployment insurance. Involuntary unemployment
				  insurance must be written in compliance with Texas Insurance Code, Chapter
				  3501, and any regulations issued by the Texas Department of Insurance under the
				  authority of that chapter.
(f)
				  Lawful rates and terms for dual-interest gap insurance. Dual-interest gap
				  insurance, authorized by Texas Finance Code, §
										RSA
				  348.208(b)(4), must be
				  written at rates and on forms set and filed in accordance with Texas Insurance
				  Code, Chapters 2251 and 2301, and any regulations issued by the Texas
				  Department of Insurance under the authority of those provisions.
(g) Authorized insurance and surplus lines
				  insurance companies. For retail installment sales transactions involving
				  ordinary vehicles, credit insurance must be procured from an insurance company
				  authorized to do business in this state. Surplus lines insurance companies are
				  not authorized to offer credit insurance on a Chapter 348 motor vehicle retail
				  installment sales contract.
(h)
				  Debt cancellation agreements. Debt cancellation agreements are not credit
				  insurance. For retail installment sales transactions involving ordinary
				  vehicles, debt cancellation agreements that cancel all or part of the retail
				  buyer's obligation to repay the retail installment sales contract based upon
				  the occurrence of death, disability, or unemployment of the retail buyer are
				  not authorized to be sold or written with a Chapter 348 motor vehicle retail
				  installment sales contract. A debt cancellation agreement may be offered in
				  connection with a Chapter 348 motor vehicle retail installment sales
				  transaction and included as a term of, or modification to, the retail
				  installment sales contract if the debt cancellation agreement is written in
				  compliance with:
(1) Texas Finance Code,
				  § 348.124 and §
											RSA
				  84.308 of this title; or
(2) Texas Finance Code, Chapter
				  354.