1. (a) Purpose. This section only applies to a motor vehicle retail installment sales transaction under Texas Finance Code, Chapter 348 where a charge for insurance or debt cancellation agreement is included in the balance due under the retail installment sales contract. This section does not apply to insurance sold outside of the retail installment sales transaction.
2. (b) Authorized credit insurance. Authorized credit insurance includes credit life, credit accident and health insurance, credit involuntary unemployment insurance, and dual-interest gap insurance. The retail seller may but is not required to offer the authorized credit insurance products described in this section.
3. (c) Decreasing term coverage for credit life, credit accident and health, and involuntary unemployment insurance. Credit life insurance, credit accident and health insurance, and involuntary unemployment insurance written in connection with a Texas Finance Code, Chapter 348 motor vehicle retail installment sales contract must be decreasing term insurance.
4. (d) Lawful rates and terms for credit life and credit accident and health insurance. Credit life insurance and credit accident and health insurance must be written in compliance with Texas Insurance Code, Chapters 1131 and 1153, and any regulations issued by the Texas Department of Insurance under the authority of those provisions.
5. (e) Lawful rates and terms for involuntary unemployment insurance. Involuntary unemployment insurance must be written in compliance with Texas Insurance Code, Chapter 3501, and any regulations issued by the Texas Department of Insurance under the authority of that chapter.
6. (f) Lawful rates and terms for dual-interest gap insurance. Dual-interest gap insurance, authorized by Texas Finance Code, §348.208(b)(4), must be written at rates and on forms set and filed in accordance with Texas Insurance Code, Chapters 2251 and 2301, and any regulations issued by the Texas Department of Insurance under the authority of those provisions.

7. (g) Authorized insurance and surplus lines insurance companies.

   1. (1) Ordinary vehicles. For retail installment sales transactions involving ordinary vehicles, credit insurance must be procured from an insurance company authorized to do business in this state. Surplus lines insurance companies are not authorized to offer credit insurance on a Chapter 348 motor vehicle retail installment sales contract.
   2. (2) Commercial vehicles. For retail installment sales transactions involving commercial vehicles, credit insurance must be procured from an insurer that is authorized to do business in this state or an eligible surplus lines insurer.

8. (h) Debt cancellation agreements. Debt cancellation agreements are not credit insurance.

   1. (1) Ordinary vehicles. For retail installment sales transactions involving ordinary vehicles, debt cancellation agreements that cancel all or part of the retail buyer's obligation to repay the retail installment sales contract based upon the occurrence of death, disability, or unemployment of the retail buyer are not authorized to be sold or written with a Chapter 348 motor vehicle retail installment sales contract. A debt cancellation agreement written in compliance with Texas Finance Code, §348.124 and §84.308 of this title (relating to Debt Cancellation Agreements for Total Loss or Theft of Ordinary Vehicle) for the total loss or theft of a motor vehicle may be offered in connection with a Chapter 348 motor vehicle retail installment sales transaction and included as a term of, or modification to, the retail installment sales contract. In order for a debt cancellation agreement fee to be considered reasonable, the debt cancellation agreement must allow the commissioner reasonable access to any documents relating to the creation, processing, or resolution of the debt cancellation agreement that are in the possession of the debt cancellation administrator or provider.
   2. (2) Commercial vehicles. For retail installment sales transactions involving commercial vehicles, a debt cancellation agreement written in compliance with Texas Finance Code, §348.0051 may only be offered in connection with a Chapter 348 motor vehicle retail installment sales contract if the debt cancellation agreement involves the cancellation of all or part of the retail buyer's obligation to repay the retail installment sales contract based upon the occurrence of one or more of the following events: death or disability of the retail buyer or the total loss or theft of the motor vehicle.

Source Note:The provisions of this §84.302 adopted to be effective July 10, 2008, 33 TexReg 5280; amended to be effective March 14, 2010, 35 TexReg 1959.