| (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, §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, §1304.003. Pursuant to Texas Occupations
Code, §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 §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 §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, §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 §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 §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.
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| Source Note: The provisions of this §84.301 adopted to be effective August 31, 2006, 31 TexReg 6670; amended to be effective March 14, 2010, 35 TexReg 1959; amended to be effective November 4, 2010, 35 TexReg 9708; amended to be effective September 8, 2011, 36 TexReg 5671; amended to be effective November 8, 2012, 37 TexReg 8780 |
