Regulation of Credit Insurance

 

Policy Forms

 

Credit insurers must file policy forms with the Texas Department of Insurance. The policy forms must include, among other things, 1) a description of the coverage, 2) exceptions, limitations to, or restrictions on the coverage, and 3) a statement that the creditor will receive benefits to reduce or satisfy the unpaid amount first and then any remaining benefits will be paid to the beneficiary (Texas Insurance Code § 1153.052).  The policy form is considered approved 60 days after the insurer files the form unless the commissioner approves or disapproves the form earlier (Texas Insurance Code § 1153.053). 

 

Rates

 

The commissioner of insurance must adopt presumptive premium rates (Texas Insurance Code § 1153.103).  Insurers must file a schedule of premium rates for each credit policy form filed  (Texas Insurance Code § 1153.101).  The rate schedule must be within 30 percent of the presumptive rates (Texas Insurance Code § 1153.105).  If an insurer wants to use a rate that is greater than 30 percent higher or lower than the presumptive rate, it must file the rate with the commissioner and the commissioner may disapprove the rate if it is not actuarially justified. (Texas Insurance Code § 1153.106(a)&(b)).  The rate is considered approved if the commissioner does not disapprove the rate within 60 days after the rate is filed (Texas Insurance Code § 1153.106(c)).