Review Requirements Checklist – Personal Credit

(including Credit Involuntary Unemployment Insurance and Dual Interest - Personal GAP)

Updated 11/16/2021 - Return to Index

Refer to Property & Casualty Filings Made Easy for required documentation.

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Forms

Filing Standards

Review requirements	Reference	Comments
Policy forms and Endorsements	§2301.001(2), Insurance Code	Policy forms and endorsements may not be unjust, unfair, inequitable, misleading or deceptive.
Prior Approval - Excluding Consumer Credit Property	Chapter 2301, Insurance Code	An insurance policy form or endorsement may not be delivered or issued for delivery in this state unless the form has been filed with and approved by the commissioner. Each filing shall be made not later than the 60th day before the date of any use or delivery for use.
Large Risk Exemption	§2301.004, Insurance Code	Policy forms for use with large risks are exempt from filing for prior approval if the forms are to be used with a "large risk". "Large Risk" is defined as an insured that has total insured property values of $5 million or more; an insured that has total annual gross revenues of $10 million or more; or an insured that has a total premium of $25,000 or more for property insurance, $25,000 or more for general liability insurance, or $50,000 or more for multiperil insurance.
Disapproval of Forms; Withdrawal of Approval	§2301.007, Insurance Code	The commissioner may disapprove a form filed under §2301.006 or withdraw approval of a form if the form (1) violates any law, including a rule adopted under the Texas Insurance Code, or (2) contains a provision or has a title or heading that is unjust or deceptive, encourages misrepresentation, or violates public policy.
Applications		Not Required to be Filed For Approval Unless the Application Becomes a Declaration Page

Arbitration

Review requirements	Reference	Comments
Arbitration	Chapter 2301, Insurance Code	Voluntary, post dispute arbitration only. May be either binding or non-binding.

Credit Involuntary Unemployment

Review requirements	Reference	Comments
Combining Credit Involuntary Unemployment with other lines	§3501.002, Insurance Code	Credit involuntary unemployment insurance may be written alone or in conjunction with credit life insurance, credit accident and health insurance, or both. Credit involuntary unemployment insurance may not be combined with lines of insurance other than credit life and credit accident health insurance.
Maximum Amount of Insurance Coverage	§342.403(b), Finance Code	At any time the total amount of the policies of credit accident and health insurance or involuntary unemployment insurance in force on one borrower on one loan contract may not exceed the total amount repayable under the loan contract, and the amount of each periodic indemnity payment may not exceed the scheduled periodic installment payment on the loan.

Cancellation & Nonrenewal

Review requirements	Reference	Comments
Elected Officials	§§551.151 & 551.152, Insurance Code	An insurer may not cancel or refuse to renew an insurance policy based solely on the fact that the policyholder is an elected official.
Insured's Right to Cancel	Chapter 2301, Insurance Code	Insurance company cannot limit or restrict the insured's right to cancel a policy.
Voiding Coverage	Chapter 705, Insurance Code	"Void Coverage" language must comply with Chapter 705, Subchapter A, and the misrepresentation must be material.

Choice of Law

Review requirements	Reference	Comments
Texas Laws Govern Policies	Article 21.42, Insurance Code	Texas must be choice if filing contains choice of law provision.

Claims Settlement

Review requirements	Reference	Comments
Prompt Payment of Claims	§§542.051 - 542.061, Insurance Code	Prompt payment of claims.
Contractual Limitations Period - Suits	§16.004, Civil Practice & Remedies	Legal action, 4 years.
Contractual Limitations Period - Suits	§16.070, Civil Practice & Remedies	Except as provided by Subsection (b), a person may not enter a stipulation, contract, or agreement that purports to limit the time in which to bring suit on the stipulation, contract, or agreement to a period shorter than two years. A stipulation, contract, or agreement that establishes a limitations period that is shorter than two years is void in this state. The Texas Third Court of Appeals issued an opinion that acknowledges that the language providing 2 years and 1 day from the date the cause of action first accrues satisfies the statutory requirement of §16.070, Civil Practices and Remedy Code. ( http://www.search.txcourts.gov/Case.aspx?cn=03-08-00408-CV) Case #03-08-00408-CV
Notice Requirements	§16.071, Civil Practice & Remedies	A contract stipulation that requires a claimant to give notice of a claim for damages as a condition precedent to the right to sue on the contract is not valid unless the stipulation is reasonable. A stipulation that requires notification within less than 90 days is void.
Appraisal	Chapter 2301, Insurance Code	Must specify a number of days, cannot be open-ended and insured must retain their right to bring legal action against insurer, but only if the insurer retains their right to deny the claim (ie., CP 01 42).
Providing Certain Claims Information On Request	§§542.101-542.104, Insurance Code; and Commissioner's Bulletin No. B-0043-05	If a policy form or endorsement contains language addressing the request or furnishing of claims information, it would need to comply with the applicable statute(s).

Coverage Issues

Review requirements	Reference	Comments
Examination Under Oath	Chapter 2301, Insurance Code §151.001(a)(7), Family Code	If policy language requires examination under oath, the provision must also state that a parent or guardian may be present during any examination of a minor.
Tie-In Sales	Chapter 1806, Insurance Code & 6/1/78 Board Letter	Tie-in sales may violate state law. A Personal GAP Benefit Endorsement or similar feature that requires the borrower to return to the same dealer or lender for advancement of a down payment is considered a tie-in sale.

Disclosure of Guaranty Fund Nonparticipation

Review requirements	Reference	Comments
Disclosure of Guaranty Fund Nonparticipation	28 TAC §1.1001, Texas Administrative Code, Chapter 461, Insurance Code	Disclosure of Guaranty Fund Nonparticipation. NOTE: Texas Property and Casualty Insurance Guaranty Act does not apply to credit insurance, vendors' single-interest insurance, collateral protection insurance, or similar insurance protecting a creditor's interest arising out of a creditor-debtor transaction in accordance with §462.007(b)(4).

Consumer Bill of Rights

Review requirements	Reference	Comments
Consumer Bill of Rights	28 TAC §3.6011(a), Texas Administrative Code	The insurer must provide with each new policy and certificate of involuntary unemployment insurance a copy of the Texas Department of Insurance Consumer Bill of Rights for Credit Life, Credit Disability, and Involuntary Unemployment Insurance. The Spanish version must be provided upon request by a consumer.

Family and Medical Leave Act

Review requirements	Reference	Comments
When coverage includes "other State or Federal Laws"	Chapter 2301, Insurance Code	When Family and Medical Leave Act coverage is involved, and the coverage includes "other State or Federal Laws", a cite of the specific statutes for each of the additional acts or laws is required to be provided.

Fully Earned Premium/Retention of Minimum Earned Premium

Review requirements	Reference	Comments
Fully Earned Premium / Retention of Minimum Earned Premium	Chapter 2251 & Chapter 2301,  Insurance Code and 28 TAC §5.9320, Texas Administrative Code	TDI will consider approving fully earned premium only for risks with exposure during a period certain, such as special events and weather policies. TDI will consider approving minimum earned premium only if it is a nominal amount. The company must file appropriate rates associated with a minimum or fully earned premium.

General Change Endorsements

Review requirements	Reference	Comments
May Not Manuscript Coverage Once Approved	Chapter 2301, Insurance Code	Coverage forms are prior approval. Change endorsements may be used to change insured address, etc. but may not be used to change, alter or "clarify" coverage in any way. Company must provide verification that the endorsement will not be used to change, alter, or clarify coverage.

Rebating or Discrimination

Review requirements	Reference	Comments
Rebating or Discrimination	Chapter 1806, Insurance Code	Inducements prohibited.
Political Affiliation and Expression	Chapter 544, Subchapter M, Insurance Code	Except as provided by Section 544.603, a person may not refuse to insure or provide coverage to an individual, refuse to continue to insure or provide coverage to an individual, limit the amount, extent, or kind of coverage available for an individual, or charge an individual a rate that is different from the rate charged to other individuals for the same coverage because of the individual's political affiliation or expression.

Toll Free Information

Review requirements	Reference	Comments
Notice of Policyholder Complaint Procedures	§521.005, Insurance Code	A brief written notice of suggested procedure to be followed by the policyholder in the event of a dispute concerning a policyholder's claim or premium.
Toll-Free Information & Complaint Number	§§521.051 - 521.056, Insurance Code	Toll-Free number for the Texas Department of Insurance.
Insurer's Toll-Free Information & Complaint Number	§§521.101 - 521.103, Insurance Code	Insurer's requirement to maintain toll-free number to provide information concerning policies issued by the insurer and to accept complaints from policyholder. Article contains an exception for insurers whose gross initial premium receipts collected in this state are less than $2 million a year or to an insurer with regard to fidelity, surety, or guaranty bonds.
Notice of Toll-Free Telephone Numbers and Information & Complaint Procedures	28 TAC §1.601 & §1.602, Texas Administrative Code and Commissioner's Order 3952	To satisfy requirements for §521.005, §§521.051 - 521.056, and §§521.101 - 521.103 noted above.