Texas Insurance Code Title 5, Chapter 651 - Financing Of Insurance Premiums

SUBCHAPTER A GENERAL PROVISIONS

• Texas Section 651.001 - Definitions
  In this chapter: (1) "Annual percentage rate" means the annual percentage rate of finance charge determined under the Consumer Credit Protection Act and Regulation Z....
• Texas Section 651.002 - Certain Conduct Not Engaging In Business As Insurance Premium Finance Company
  (a) The preparation or delivery by an insurance agent of a premium finance agreement or disclosure statement required by Section 651.155 on behalf of the...
• Texas Section 651.003 - Rules
  (a) The commissioner may adopt and enforce rules necessary to administer this chapter. (b) The rules may contain classifications, differentiations, or other provisions and provide...
• Texas Section 651.004 - Employment Of Examiners And Investigators; Payment Of Expenses
  The department may: (1) employ persons as necessary to examine or investigate and make reports on alleged violations of this chapter and compliance with any...
• Texas Section 651.005 - Deposit And Use Of Fees
  (a) Except as provided by Subsection (b), each fee collected under this chapter: (1) shall be deposited to the credit of the Texas Department of...
• Texas Section 651.006 - Assessments
  (a) A license holder shall pay to the department: (1) an amount imposed by the department to cover the direct and indirect cost of examinations...
• Texas Section 651.007 - Applicability Of Consumer Credit Protection Act And Regulation Z
  A transaction that is subject to this chapter is also subject to: (1) the Consumer Credit Protection Act; and (2) the applicable provisions of Regulation...

SUBCHAPTER B AUTHORITY TO ENGAGE IN BUSINESS

• Texas Section 651.008 - Authority Of Certain Property And Casualty Agents To Charge Interest To Certain Persons
  (a) Notwithstanding any other law, a general property and casualty agent or a personal lines property and casualty agent who holds a license under Chapter...
• Texas Section 651.051 - License Required
  (a) Unless the person is a license holder, a person may not: (1) negotiate, transact, or engage in the business of insurance premium financing in...
• Texas Section 651.052 - License Fee
  (a) The department shall establish the fee for a license under this subchapter in an amount not to exceed $200. (b) The fee for a...
• Texas Section 651.053 - Entitlement Of Banks And Savings And Loan Associations To License
  (a) A bank or a savings and loan association is entitled to receive a license under this subchapter if the bank or savings and loan...
• Texas Section 651.054 - Application For License; Investigation Fee; Exemption
  (a) An application for a license to engage in the business of insurance premium financing must: (1) be in writing on a form prescribed by...
• Texas Section 651.055 - Refusal To Issue License
  The department may refuse to issue a license to an applicant if the department determines that: (1) the financial responsibility, experience, character, or general fitness...
• Texas Section 651.056 - Notice Of Action On Application
  Not later than the 90th day after the date the department receives an application under Section 651.054, the department shall notify the applicant that: (1)...
• Texas Section 651.057 - Issuance Of License
  After approval of an application and on receipt of the required license fee, the department shall: (1) issue a license authorizing the license holder to...
• Texas Section 651.058 - Reciprocal License
  The department may waive any license requirement for an applicant who holds a valid license from another state that has license requirements substantially equivalent to...
• Texas Section 651.059 - Issuance Of Multiple Licenses
  The department may issue a person more than one license under this subchapter but may not issue one person more than 60 of those licenses....
• Texas Section 651.060 - Single Business Location Authorized By License
  A license authorizes the license holder to maintain only one location where the business of insurance premium financing may be conducted. Added by Acts 2003,...
• Texas Section 651.061 - Appearance Of License; Posting
  (a) A license must state the name and address of the license holder. (b) The license must be conspicuously posted at the location where the...
• Texas Section 651.062 - Transfer Or Assignment Of License Prohibited
  A license may not be transferred or assigned. Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1, 2005.
• Texas Section 651.063 - Term Of License
  Unless a staggered renewal system is adopted under Section 651.065, a license is issued for the calendar year and remains valid until December 31 of...
• Texas Section 651.064 - Procedure For License Renewal
  (a) A license holder may renew an unexpired license by paying the required renewal fee to the department. (b) A person whose license has been...

SUBCHAPTER C REGULATION OF INSURANCE PREMIUM

• Texas Section 651.065 - Staggered Renewal System
  (a) The commissioner by rule may adopt a system under which licenses expire on various dates during the year. (b) For a year in which...
• Texas Section 651.101 - Books, Accounts, And Records
  (a) A license holder shall maintain books, accounts, and records in sufficient detail to enable a representative of the department to determine whether the license...
• Texas Section 651.102 - Annual Report
  On or before April 1 of each year, a license holder shall file with the department a report containing information required by the department concerning...
• Texas Section 651.103 - Business Name
  A license holder may not engage in the business of insurance premium financing under any name other than the name stated on the license. Added...
• Texas Section 651.104 - Business Location
  A license holder may not engage in the business of insurance premium financing at any location other than the address stated on the license. Added...
• Texas Section 651.105 - Relocation Of Place Of Business
  (a) A license holder who proposes to relocate the place where the holder engages in the business of insurance premium financing shall give written notice...
• Texas Section 651.106 - Business Premises
  (a) Except as provided by Subsection (b), a license holder may engage in the business of insurance premium financing: (1) in any office, suite, room,...
• Texas Section 651.107 - Engaging In Business By Mail Or Outside The Community
  This chapter does not prohibit a license holder from engaging in the business of insurance premium financing: (1) by mail; or (2) with persons who...
• Texas Section 651.108 - Certain Charges Prohibited
  In connection with a premium finance agreement entered into under this chapter, an insurance charge or any other charge or fee may not be imposed...
• Texas Section 651.109 - Limitations On Rates And Charges
  (a) An insurance premium finance company may not take or receive from an insured a greater rate or charge than is authorized by Chapter 342,...
• Texas Section 651.110 - Limitations On Certain Inducements Or Sharing Of Profits And Fees
  (a) This section applies to: (1) an insurance premium finance company; (2) an insurance agent; (3) a premium finance agreement servicer; or (4) an affiliate,...

SUBCHAPTER D PREMIUM FINANCE AGREEMENTS

• Texas Section 651.111 - Deceptive Advertising Prohibited
  (a) A license holder may not advertise or cause to be advertised in any manner any false, misleading, or deceptive statement or representation with regard...
• Texas Section 651.151 - Required Form And Contents Of Premium Finance Agreement
  (a) A premium finance agreement must be in writing on a form approved by the commissioner. (b) A premium finance agreement must be dated and...
• Texas Section 651.152 - Other Required Contents
  In addition to the items required by Section 651.151, a premium finance agreement must contain the following, as applicable: (1) the finance charge expressed as...
• Texas Section 651.153 - Form Of Disclosures
  (a) The disclosures required by Sections 651.151 and 651.152 must be made clearly, conspicuously, and in meaningful sequence. (b) If the term "finance charge" or...
• Texas Section 651.154 - Consolidation Of Increase Attributable To Amendment Of Rate Classification
  (a) If, in a premium finance agreement, a change in an insured's policy that is caused by an amendment of the rate classification by endorsement...
• Texas Section 651.155 - Responsibilities Of Insurance Agent
  An insurance agent shall: (1) prepare a premium finance agreement; and (2) deliver to the insured each disclosure statement required by law. Added by Acts...
• Texas Section 651.156 - Taking Of Incomplete Premium Finance Agreement Prohibited
  A license holder may not take a premium finance agreement that has not been fully completed and executed at the time the agreement is executed....
• Texas Section 651.157 - Perfection Of Premium Finance Agreement As Secured Transaction: Filing Not Required
  Filing of a premium finance agreement or a financing statement is not necessary to perfect the agreement as a secured transaction against a creditor, subsequent...
• Texas Section 651.158 - Prepayment And Refund
  (a) Notwithstanding the provisions of any premium finance agreement to the contrary, an insured may pay the balance due under the agreement in full at...
• Texas Section 651.159 - Default Charge
  A premium finance agreement may provide for the payment of a default charge by the insured as provided by Section 342.203, Finance Code, this code,...
• Texas Section 651.160 - Power Of Attorney
  A premium finance agreement may contain a power of attorney that enables the insurance premium finance company to cancel any or all of the insurance...
• Texas Section 651.161 - Cancellation Of Insurance Contract
  (a) An insurance premium finance company may not cancel an insurance contract listed in a premium finance agreement except as provided by this section for...
• Texas Section 651.162 - Return Of Unearned Premiums And Commissions
  (a) This section applies only to a premium finance agreement that contains an assignment or power of attorney for the benefit of the insurance premium...
• Texas Section 651.163 - Assignment Of Premium Finance Agreement
  Unless the insured has notice of an actual or intended assignment of a premium finance agreement, payment by an insured under the agreement to the...
• Texas Section 651.164 - Restrictions On Premium Finance Agreements
  (a) A premium finance agreement may not contain any provision under which, absent default by the insured, the insurance premium finance company holding the agreement...
• Texas Section 651.165 - Required Notice Of Certain Premium Finance Agreements
  (a) An insurance premium finance company that enters into a premium finance agreement that includes an assignment or power of attorney shall notify the insurer...
• Texas Section 651.166 - Taking, Receiving, Or Charging Unauthorized Amount
  (a) Taking or receiving from an insured or the charging of an insured by an insurance premium finance company of a charge greater than authorized...

SUBCHAPTER E DISCIPLINARY PROCEDURES AND PENALTIES; OFFENSES

• Texas Section 651.167 - Effect Of License Revocation, Suspension, Or Surrender On Premium Finance Agreement
  The revocation, suspension, or surrender of a license does not affect the obligation of an insured under a lawful premium finance agreement previously acquired or...
• Texas Section 651.201 - Examinations And Investigations Of License Holders
  (a) The department may conduct an examination or investigation that is necessary to determine whether a license holder: (1) is in compliance with this chapter;...
• Texas Section 651.202 - Confidentiality Of Reports And Related Material
  (a) A report of an examination or investigation under Section 651.201 and any correspondence or memoranda concerning or arising from the examination or investigation: (1)...
• Texas Section 651.203 - Hearings And Investigations; Subpoena Power
  In conducting a hearing or investigation under this chapter, the department or a person designated by the department may: (1) administer oaths; (2) subpoena witnesses;...
• Texas Section 651.204 - Revocation Or Suspension Of License
  After notice and hearing, the department may revoke or suspend a license if: (1) the department finds: (A) that the license holder has violated this...
• Texas Section 651.205 - Issuance Of Revocation Or Suspension Order
  If the department revokes or suspends a license, the department shall: (1) immediately issue in duplicate a written order of revocation or suspension; (2) file...
• Texas Section 651.206 - Surrender Of License; Effect
  (a) A license holder may surrender a license by delivering to the department written notice that the license holder surrenders the license. (b) The surrender...
• Texas Section 651.207 - License Reinstatement
  The department may reinstate a suspended license or issue a new license to a person whose license has been revoked if no fact or condition...
• Texas Section 651.208 - Offense
  (a) A person commits an offense if the person: (1) intentionally, knowingly, recklessly, or negligently engages in the operation of an insurance premium finance company...
• Texas Section 651.209 - Sanctions; Cease And Desist Orders
  In addition to each penalty provided by Sections 651.166 and 651.208, the commissioner or a person designated by the commissioner may: (1) order a sanction...

Last modified: September 28, 2016