(a) Personal property insurance. If a loan is prepaid in full from the proceeds of a personal property insurance policy following a personal property loss, the refund should be computed as follows:
(1) Total personal property loss, other than motor vehicle.
(2) Partial personal property loss, other than motor vehicle.
(3) Total or partial motor vehicle insurance loss.
(b) Credit life insurance. If a loan is prepaid in full or in part by the proceeds of a credit life insurance claim, the refund should be computed as follows:
(1) Complete prepayment. An interest refund, credit accident and health insurance premium refund, credit involuntary unemployment insurance premium refund, collateral protection insurance premium refund, and personal property insurance premium refund must be computed as of the date of death. A dual-interest motor vehicle insurance premium refund must be computed as prescribed by the Automobile Rules and Rating Manual in the event cancellation is requested by the proper representative of the estate.
(2) Partial prepayment. If a loan is prepaid in part by the proceeds of a credit life insurance claim following the death of the primary borrower, any other credit insurance associated with the primary borrower, such as credit accident and health insurance and credit involuntary unemployment insurance, must be canceled. The refunds of the unearned credit insurance premiums must be computed as of the date of death.
(c) Credit accident and health insurance. If an insurance carrier has classified a disability as permanent and elected to prepay a loan in full, the interest refund, credit life insurance premium refund, credit involuntary unemployment insurance premium refund, or personal property insurance premium refund must be computed as of the day the settlement check is received by the licensee. If cancellation is requested by the borrower, any dual-interest motor vehicle insurance premium refund must be computed as prescribed by the Automobile Rules and Rating Manual.
Source Note: The provisions of this §83.809 adopted to be effective November 9, 2006, 31 TexReg 9001; amended to be effective November 4, 2010, 35 TexReg 9698; amended to be effective July 10, 2014, 39 TexReg 5142