HB 1902

83(R) - 2013

Vote Recommendation

  • Neutral
  • Positive
  • Neutral
  • Neutral
  • Positive


Craig Eiland

Bill Caption

Relating to the refund of unearned premium for a personal automobile or residential property insurance policy.

Fiscal Notes

No significant fiscal implication to the State is anticipated.

Bill Analysis


Under the current Texas Insurance code, Insurance companies are required to maintain a reserve for unearned premiums. These reserves must equal the portion of the policy that is unused or unexpired. If the policy is cancelled, the code requires that the insurance company "promptly" refund the money to the policyholder. No more specific time limit is given.

HB 1902 adds a subsection that would require the insurer to refund the money within 15 business days, effictively defining the word "promptly" in this chapter. 


Because insurers are already required to refund the unused premium in a "prompt" manner, it is important that the code clarifies the period of time the companies are given to send the refund to the policyholder. Insurance is a heavily regulated industry but this requirement does not interfere with the free market actions of the companies - it clarifies the term "promptly" in the Insurance Code and ensures that policyholders receive their due refunds without unnecessary delay.