(a) Upon discharge of an indebtedness by prepayment, renewal, or refinancing, any insurance, other than nonfiling insurance, written under the authority of Texas Finance Code, Chapter 342, Subchapter I, must be automatically terminated. At the option of the borrower, dual-interest motor vehicle insurance may be retained without cancellation. If a policy of insurance is terminated prior to scheduled maturity, a credit of the unearned premium must be applied to the borrower's account or a refund of the unearned premium must be paid by the lender to the borrower.
(b) Upon termination of a personal property insurance policy prior to the scheduled maturity of a loan, other than collateral protection insurance, the licensee must provide the borrower a refund or credit calculated in accordance with the policy approved by the commissioner. The policy must provide for a pro rata method of making refunds. The pro rata method of making refunds involves computing a factor to apply to the total premium to determine the unearned portion. The factor is determined by dividing the term remaining on the loan by the total loan term.
(c) Upon termination of a collateral protection insurance policy prior to the scheduled maturity of a loan, the lender must provide the borrower a refund or credit calculated in accordance with the insurance policy approved by the Texas Department of Insurance.
(d) Upon termination of a credit life or credit accident and health insurance policy prior to the scheduled maturity of a loan, the lender must provide the borrower a refund or credit calculated in compliance with Texas Insurance Code, Chapter 1153 and regulations issued by the Texas Department of Insurance under the authority of that chapter.
(e) Upon termination of a credit involuntary unemployment insurance policy prior to the scheduled maturity of a loan, the lender must provide the borrower a refund or credit calculated in accordance with the insurance policy approved by the Texas Department of Insurance.

Source Note: The provisions of this §83.808 adopted to be effective November 9, 2006, 31 TexReg 9001; amended to be effective November 4, 2010, 35 TexReg 9698