Texas Register, Volume 9, Number 3, Pages 223-296, January 10, 1984 Page: 276
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or through the agent or agency writing the insurance If
the insurance premium finance company does not give
notice of the premium finance agreement to the insurer
(as provided for by the Insurance Code, Article 24.22),
then the total unearned premium refund shall be paid to
the premium finance company within 120 [receive the
unearned commission refund within a reasonable length
of time, not to exceed 601 days from the effective date
of the cancellation The canceling company shall pay the
entire amount of unearned premium, which includes the
portion of the unearned part of the agent's commission,
[including unearned agents' commissions] directly to the
insurance premium finance company It shall be the in-
surer's responsibility to collect from its agent that part
of the unearned premium retained by its agent The pre-
viously mentioned shall apply to canceled policies writ-
ten in a statutory plan or pool, except that the agent who
applied for the policy on behalf of the insured shall be
solely responsible for the payment of any unearned corn-
mission owed to the insurance premium finance company
unless the insuring company or the agent tenders t'e en-
tire unearned premium including uneai ned commission
.006 Record of ('ontacts [Contacts] A licensee or
his agent shall preserve written record of each and every
written contact made by a licensee with the insured or
any other person for the purpose of collecting late in-
surance pr-miurn finance pay ments The record shall also
include written contacs made by the insured with the ih-
censee. The written record shall include the dare, method
of contact, contacted party, person initiating the contact,
and essence of the contact Each record shall be main-
tained In a manner that is readily understood
This agency hereby certifies that the proposal has
been reviewed by legal counsel and found to be within
the agency's authority to adopt
Issued in Austin, Texas, on December 29, 1983
TRD-8311077 James W Norman
Chief Clerk
State Board of insurance
Earliest possible date of adoption
February 6, 1984
For further information, please call (512) 475-2950
Annual Reports and Examinations
059.60.08 001, .003
The State Board of Insurance proposes amendments
to Rule 059 60 08 001, concerning the filing of an
annual report by the premium finance company, and
Rule 059 60 08 003, concerning the examination
charges invoiced to the insurance premium finance
companies by the State Board of Insurance The
amendment to Rule 059 60 06 001 will delete a
clause that was written in the rules originally and no
longer applies since there is no law requiring an insur-
ance company to provide the State Board of Insurancewith a financial statement Deletion of the word
"such" is proposed since it is surplusage, and the
phrase "determine compliance with Article 24 of the
Insurance Code" more specifically states the purpose
of the annual report The amendment to Rule 059.60
06.003 establishes the expense items to be used in
calculating the rate by which finance companies will
be charged for examinations The Insurance Code, Ar-
ticle 24 06(c), permits the State Board of Insurance
to assess insurance premium finance companies the
expenses of examinations The agency's present
method of calculating examination charges does not
provide enough money to cover all expenses To ob-
tain adequate money to cover expenses and to make
the charges easier to calculate on the in-state ex-
penses, the State Board of Insurance proposes to
charge a flat hourly rate The rate for 1982-1983 ap-
pears to be approximately $75 per hour The determi-
nation of this rate is based upon an average of 2 5
hours travel time and an average of 3 0 hours for in-
house work on the examination report The average
times are from statistical data accumulated over the
last two years By charging $75 an hour times 9.5
hours average per examination, times the number of
examinations the agency normally conducts a year,
plus approximately $30,000 for the annual renewal
fees, the State Board of Insurance will have enough
income to offset next year's budget Out-of-state ex-
aminations will continue to be invoiced on a pro-rated
basis, based on the actual expenses
Brad Ellis, Insurance Premium Finance Section direc-
tor, has determined that for the first f've-year period
the rules will be in effect there will be no fiscal impli-
cations for state or local government as a result of en-
forcing or administering the rules There is an antici-
pated cost to small businesses as a result of these
amendments The cost of the examination will be
based on a flat hourly charge Since the same percent-
age of accounts must be examined for both small and
large businesses, the cost to the business with a
smaller number of accounts will be less than that
business with a large number of accounts due to the
time required for the examination
Mr. Ellis also has determined that for each year of the
first five years the rules as proposed are in effect the
public benefit anticipated as a result of enforcing the
Rule 059 60 08 001 as proposed will be assurance
that the consumer is not being rrmislead The annual
report is one document used in the examination of an
insurance premium company For Rule 059 60 08
003, the public benefit anticipated will be assurance
that insurance premium finance companies will pay
all operating expenses of the Insurance Premium FI-
nance Department at the State Board of Insurance
This will require no tax funds 1 here is no anticipated
economic cost to individuals who are required to com-
ply with Rule 059 60 08 001 as proposed, and the
only anticipated economic cost to individuals who are
required to comply with Rule 059 60 08 003 as pro-
posed will be the charge to premium finance com-
panies as provided by the ruleJa-uary 10, 1984
Texas
Register9 TexReg 276
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Texas. Secretary of State. Texas Register, Volume 9, Number 3, Pages 223-296, January 10, 1984, periodical, October 1, 1984; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth243555/m1/54/: accessed April 26, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.