CHAPTER 558. REFUND OF UNEARNED PREMIUM - Texas Statutes

INSURANCE CODE

TITLE 5. PROTECTION OF CONSUMER INTERESTS

SUBTITLE C. DECEPTIVE, UNFAIR, AND PROHIBITED PRACTICES

CHAPTER 558. REFUND OF UNEARNED PREMIUM

Sec. 558.001. DEFINITION. In this chapter, "insurer" means an

insurance company or other entity authorized to engage in the

business of insurance in this state. The term includes:

(1) a stock life, health, or accident insurance company;

(2) a mutual life, health, or accident insurance company;

(3) a stock fire or casualty insurance company;

(4) a mutual fire or casualty insurance company;

(5) a Mexican casualty insurance company;

(6) a farm mutual insurance company;

(7) a county mutual insurance company;

(8) a Lloyd's plan;

(9) a reciprocal or insurance exchange;

(10) a fraternal benefit society;

(11) a stipulated premium company;

(12) a nonprofit legal services corporation;

(13) a statewide mutual assessment company;

(14) a local mutual aid association;

(15) a local mutual burial association;

(16) an association exempt under Section 887.102;

(17) a nonprofit hospital, medical, or dental service

corporation, including a corporation subject to Chapter 842;

(18) a risk retention group;

(19) a purchasing group;

(20) an eligible surplus lines insurer; and

(21) a guaranty association operating under Chapter 462 or 463.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

730, Sec. 2D.015, eff. April 1, 2009.

Sec. 558.002. APPLICABILITY OF CHAPTER; REFUND OF UNEARNED

PREMIUM. (a) This chapter applies to an insurer that issues an

insurance policy that requires the insurer to maintain an

unearned premium reserve for the portion of the written policy

premium applicable to the unexpired or unused part of the policy

period for which the premium has been paid.

(b) An insurer shall promptly refund the appropriate portion of

any unearned premium to the policyholder if the policy:

(1) has a remaining unearned premium reserve; and

(2) is canceled or terminated by the insured or the insurer

before the end of its term.

(c) A guaranty association shall promptly refund any unearned

premium as described by Subchapter E, Chapter 462, or Sections

463.003(9) and 463.259.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

730, Sec. 2D.016, eff. April 1, 2009.

Sec. 558.003. RULES AND GUIDELINES. The commissioner shall:

(1) adopt rules necessary to implement this chapter; and

(2) establish appropriate guidelines to determine the portion of

an unearned premium that must be refunded to a policyholder under

this chapter.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Sec. 558.004. EFFECT ON INSURANCE PREMIUM FINANCE COMPANY. This

chapter does not affect the obligation of an insurer to pay an

unearned premium to an insurance premium finance company in

accordance with Section 651.162.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.