Texas Insurance Code 651.001 – Definitions
Terms Used In Texas Insurance Code 651.001
- Annual percentage rate: The cost of credit at a yearly rate. It is calculated in a standard way, taking the average compound interest rate over the term of the loan so borrowers can compare loans. Lenders are required by law to disclose a card account's APR. Source: FDIC
- Contract: A legal written agreement that becomes binding when signed.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Finance charge: The total cost of credit a customer must pay on a consumer loan, including interest. The Truth in Lending Act requires disclosure of the finance charge. Source: OCC
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Person: includes corporation, organization, government or governmental subdivision or agency, business trust, estate, trust, partnership, association, and any other legal entity. See Texas Government Code 311.005
In this chapter:
(1) “Annual percentage rate” means the annual percentage rate of finance charge determined under the Consumer Credit Protection Act and Regulation Z.
(2) “Consumer Credit Protection Act” means the Consumer Credit Protection Act of 1970 (15 U.S.C. § 1601 et seq.; 18 U.S.C. § 891 et seq.).
(2-a) “Insurance agent” means a person licensed under Subchapter E, Chapter 981 or Chapter 4051, 4052, 4053, 4054, 4055, 4056, or 4153.
(3) “Insurance premium finance company” means:
(A) a person engaged in the business of making loans under this chapter by entering into premium finance agreements with insureds or prospective insureds;
(B) a person engaged in the business of acquiring premium finance agreements from insurance agents or brokers or from other insurance premium finance companies; or
(C) an insurance agent or broker making loans under this chapter who holds premium finance agreements made and delivered by insureds that are payable to the agent or broker or to the agent’s or broker’s order.
(4) “Insured” means a person who enters into a premium finance agreement with an insurance premium finance company.
(5) “Insurer” means an entity organized or authorized to engage in the business of insurance under this code as a capital stock insurance company, title insurance company, reciprocal or interinsurance exchange, Lloyd’s plan, fraternal benefit society, mutual or mutual assessment company of any kind, statewide mutual assessment company, local mutual aid association, burial association, county or farm mutual insurance company, fidelity, guaranty, or surety company, or trust company.
(6) “License holder” means an insurance premium finance company that holds a license issued under Subchapter B.
(7) “Person” means an individual, partnership, corporation, joint venture, trust, association, or other legal entity, regardless of organization.
(8) “Premium finance agreement” means an agreement by which an insured or prospective insured promises to pay to an insurance premium finance company the amount advanced or to be advanced under the agreement to an insurer or to an insurance agent in payment of the premiums on an insurance contract.
(8-a) “Premium finance agreement servicer” means a person who provides a premium finance company with collection, billing, or other services related to the administration of premium finance agreements.
(9) “Regulation Z” means the federal regulations adopted under the Consumer Credit Protection Act as 12 C.F.R. § 226.1 et seq.