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 84.301 - Definitions

Current through Reg. 49, No. 28; July 12, 2024
(a) Debt
				  Cancellation Agreement for Death of Retail Buyer--The agreement between the
				  retail buyer and the retail seller or the holder of a retail installment sales
				  contract in which a holder agrees to waive all or part of the amount owed under
				  the retail installment sales contract in the event of the death of the retail
				  buyer. The fee amount of the debt cancellation agreement may be paid to the
				  retail seller, holder, or any other party designated by the retail seller or
				  holder.
(b) Debt Cancellation
				  Agreement for Disability of Retail Buyer--The agreement between the retail
				  buyer and the retail seller or the holder of a retail installment sales
				  contract in which a holder agrees to waive one or more payments owed under the
				  retail installment sales contract in the event of the disability of the retail
				  buyer. The fee amount of the debt cancellation agreement may be paid to the
				  retail seller, holder, or any other party designated by the retail seller or
				  holder.
(c) Debt Cancellation
				  Agreement for Total Loss or Theft of Motor Vehicle. For a retail installment
				  sales transaction involving an ordinary vehicle, a debt cancellation agreement
				  for total loss or theft of a motor vehicle is a retail installment sales
				  contract term or a contractual arrangement modifying a retail installment sales
				  contract term under which a retail seller or holder agrees to cancel all or
				  part of an obligation of the retail buyer to repay an extension of credit from
				  the retail seller or holder on the occurrence of the total loss or theft of the
				  motor vehicle that is the subject of the retail installment sales contract but
				  does not include an offer to pay a specified amount on the total loss or theft
				  of the motor vehicle. The fee amount of the debt cancellation agreement may be
				  paid to the retail seller, holder, or any other party designated by the retail
				  seller or holder.
(d) Prepaid
				  Maintenance Agreement--A maintenance agreement as defined in Texas Occupations
				  Code, §
										RSA
				  1304.004.
(e) Primary Insurance Carrier--The retail
				  buyer's physical damage insurance company or a liability insurance policy of a
				  person that has caused a total loss to the motor vehicle.
(f) Service Contract--A service contract as
				  defined in Texas Occupations Code, §
										RSA
				  1304.003. Pursuant to Texas Occupations Code,
				  §
										RSA
				  1304.004, a prepaid maintenance agreement is
				  a type of service contract.
(g)
				  Total Loss or Theft for Debt Cancellation Agreement Not Requiring Insurance.
(1) Holder bears complete responsibility for
				  canceling the debt. Under §
											RSA
				  84.308(e)(1) of this title
				  (relating to Debt Cancellation Agreements Not Requiring Insurance), a total
				  loss means direct or accidental physical damage loss of or damage to the motor
				  vehicle subject to the debt cancellation agreement which results in a
				  determination by the holder of the retail installment sales contract that the
				  total cost of the repair is greater than or equal to the retail value of the
				  motor vehicle. The value of the motor vehicle subject to the debt cancellation
				  agreement must be determined by an established retail value guide as of the
				  date immediately prior to loss. Under §
											RSA
				  84.308(e)(1) of this title,
				  theft means the motor vehicle subject to the debt cancellation agreement is
				  stolen and deemed to be not recoverable.
(2) Debt cancellation agreement for total
				  loss or theft of used ordinary vehicle with a cash price of $15,000 or less in
				  which the retail seller does not assign the retail installment sales contract
				  to any party other than a related finance company as defined by Texas Tax Code,
				  §
											RSA
				  152.0475(a), and in which
				  the retail seller bears complete responsibility for canceling the debt after
				  total loss or theft whether the retail buyer elects to obtain property
				  insurance. Under §
											RSA
				  84.308(e)(2) of this title,
				  a total loss means direct or accidental physical damage loss of or damage to
				  the motor vehicle subject to the debt cancellation agreement which results in a
				  determination by the holder of the retail installment sales contract that the
				  total cost of the repair is greater than or equal to the retail value of the
				  motor vehicle. The value of the motor vehicle subject to the debt cancellation
				  agreement must be determined by an established retail value guide as of the
				  date immediately prior to loss. Under §
											RSA
				  84.308(e)(2) of this title,
				  theft means the motor vehicle subject to the debt cancellation agreement is
				  stolen and deemed to be not recoverable.