Consumer credit property insurance (filed). These policies
provide property coverage for an open- or closed-end consumer credit
transaction that is a retail installment transaction. For purposes
of this section, "retail installment transaction" has the meaning
assigned in Finance Code §345.001, concerning Definitions.
(1) Policies must include coverage while in transit.
(2) Policies may extend coverage to include vendee,
mortgagor, or lessee interests.
(3) Policies may not cover a vendor's, mortgagee's,
or lessor's interest beyond the termination of that interest.
(4) All policies or certificates must include a clear
statement to the insured about how payments will be allocated to all
outstanding purchase obligations. The statement must reference the
applicable lending documents to determine how the coverage will be
applied.
(5) Premium calculations for coverage involving a closed-end
consumer credit transaction may not be based on amounts paid for services,
meals, entertainment, finance or service fees, loan interest, delivery
charges, or other insurance premiums (for example, credit life, credit
disability, credit property, or credit involuntary unemployment insurance
coverage).
(6) Offers for coverage involving a closed-end consumer
credit transaction must include, at the time of the offer, the following
prominent written disclosure in no smaller than 10-point boldface
type: "This coverage might duplicate existing coverage if you have
a residential property insurance policy. This coverage ceases when
you have fully paid the debt. This coverage is primary, so it is the
first source to be used in the event of a loss on property it covers.
You may cancel this coverage at any time by calling the insurer at
the toll-free telephone number provided to you, or by writing to the
insurer. This coverage costs {set out the total identifiable credit
property insurance charge}."
(7) Offers for coverage involving an open-end consumer
credit transaction must include, at the time of the offer, the following
prominent written disclosure in no smaller than 10-point boldface
type: "This coverage might duplicate existing coverage if you have
a residential property insurance policy. It applies to any item of
covered property on which you owe a debt. This coverage is primary,
so it is the first source to be used in the event of a loss on property
it covers. You may cancel this coverage at any time by calling the
insurer at the toll-free telephone number provided to you, or by writing
to the insurer. This coverage costs ${enter amount} per $100 of outstanding
balance on your account. The premium charged for this coverage is
based on your entire outstanding balance, but the coverage only applies
to tangible personal property purchased on an open-end credit account.
Services, meals or other consumables, entertainment, finance or service
fees, loan interest, delivery charges, or other insurance premiums,
which may be part of your outstanding balance, are not covered."
(8) Policies or certificates must be given to the insured
when the coverage is accepted by the insurer, along with written instructions
about filing claims under the coverage.
(A) The instructions must include the insurer's toll-free
telephone number. The instructions must list the essential elements
an insured must provide to perfect a claim.
(B) Policies or certificates given to insureds must
include the disclosure in either paragraph (6) or (7) of this section,
as applicable, with the same typeface and size requirements.
(9) Policies and certificates for open-end consumer
credit transactions must provide that the policyholder or certificate
holder will receive a disclosure with the account statement not less
than semiannually.
(A) The disclosure must be at least 6-point boldface
type on the face of the account statement, or at least 10-point boldface
type on a statement insert.
(B) The disclosure must state: "If you are paying a
credit property insurance premium, that premium is based on the entire
outstanding balance of this account. You may cancel this coverage
at any time by calling the insurer at the toll-free telephone number
it has provided to you, or by writing to the insurer. Any premium
charged for credit property insurance coverage is based on your entire
outstanding balance, but the coverage only applies to tangible personal
property purchased on an open-end credit account. Services, meals
or other consumables, entertainment, finance or service fees, loan
interest, delivery charges, or other insurance premiums, which may
be part of your outstanding balance, are not covered."
(10) Policies and certificates for open-end consumer
credit transactions must provide that the policyholder or certificate
holder will receive a statement each billing cycle, but not less frequently
than quarterly. The statement must include:
(A) the amount of the credit property insurance charge,
separate from any total insurance charge;
(B) the amount of debt to which the insurance charge
rate was applied;
(C) the date the rate was applied; and
(D) the period covered by the monthly charge.
|
