INSURANCE CODE

CHAPTER 550. PROHIBITED PRACTICES RELATING TO PAYMENTS


	§ 550.001.  SOLICITATION OR COLLECTION OF CERTAIN 
PAYMENTS.  (a)  An insurer or an insurer's agent or sponsoring 
organization may not solicit or collect, in connection with an 
application for insurance or the issuance of a policy, a payment 
other than:
		(1)  a premium;                                                               
		(2)  a tax;                                                                   
		(3)  a finance charge;                                                        
		(4)  a policy fee;                                                            
		(5)  an agent fee;                                                            
		(6)  a service fee, including a charge for costs 
described by Section 4005.003;
		(7)  an inspection fee;  or                                                   
		(8)  membership dues in a sponsoring organization.                            
	(b)  The commissioner by rule shall permit a sponsoring 
organization to solicit a voluntary contribution with a membership 
renewal solicitation if the membership renewal solicitation is 
separate from an insurance billing.
	(c)  Except as otherwise provided by statute, an insurer may 
require that membership dues in its sponsoring organization be paid 
as a condition for issuance or renewal of an insurance policy.
	(d)  Criminal penalties for a violation of this section are 
the same as criminal penalties provided for a violation under 
Subchapter K, Chapter 823.

Added by Acts 2003, 78th Leg., ch. 1274, § 2, eff. April 1, 2005.          


	§ 550.002.  INCREASE IN CERTAIN PREMIUM 
PAYMENTS.  (a)  In this section:  
		(1)  "Account" means a person's account in a financial 
institution.         
		(2)  "Financial institution" means a state or national 
bank, a state or federal savings and loan association or 
corporation, or a state or federal credit union.
		(3)  "Insurer" means a person or entity engaged in the 
business of insurance in this state as described by Chapter 101.  
The term includes a person or entity engaged in the business of 
surplus lines insurance in this state.
		(4)  "Person" means an insured, a policy or certificate 
holder, or an owner of an insurance policy or certificate.
	(b)  An insurer receiving automatic premium payments through 
withdrawal of funds from a person's account, including an escrow 
account, as authorized by that person to pay premiums on insurance 
coverage provided through that insurer, may not increase the amount 
of funds to be withdrawn from the account to pay premiums on that 
coverage unless:
		(1)  the insurer, not later than the 30th day before the 
effective date of the increase in the premium payment amount, 
notifies the person of the increase and provides the person a 
postage prepaid form that may be used to object to the increase;  
and
		(2)  neither the insurer nor the financial institution 
receives written objection to the increase on or before the fifth 
day before the date on which the increase takes effect.
	(c)  This section does not require an insurer to notify a 
person of an increase in a premium payment amount if:
		(1)  the insurance contract or certificate:                                   
			(A)  when issued contains a schedule of increasing 
premiums;               
			(B)  expressly specifies the exact amount of each 
premium;  and            
			(C)  specifies the period for which each premium 
is payable;  or           
		(2)  the increase is the result of a change ordered by 
the insured.         
	(d)  This section does not apply to an increase in a premium 
payment that is less than $10 or 10 percent of the previous amount 
per month.

Added by Acts 2003, 78th Leg., ch. 1274, § 2, eff. April 1, 2005.