In an attempt to make auto insurance accessible at affordable rates to all consumers, TDI made the following rule requiring companies to offer specific monthly payment plans available to all policyholders, in the voluntary (regular company or county mutual) market:
"...a) All insurers writing private passenger automobile insurance shall make available to the applicant or policyholder, at his or her option, an installment payment plan. The insurer may make the installment payment plan available either itself, through an affiliate or through an entity approved to make loans for insurance premiums, including but not limited to lending institutions and premium finance companies. The installment payment plan must meet the following requirements:
i) a down payment may be required if the down payment is not greater than 16.66% of the total premium for twelve-month policies and no greater than 33.33% of the total premium for six-month policies.
ii) for twelve-month policies, the remaining balance must be payable in no less than ten equal monthly installments beginning with the second month of coverage.
iii) for six-month policies, the remaining balance must be payable in no less than four equal monthly installments beginning with the second month of coverage.
iv) an insurer who provides the installment plan itself or through an affiliate may charge a monthly service charge of no more than three dollars for providing the installment payment plan. The monthly service fee may be increased by $.50 for each $250 or fraction thereof by which the annual premium exceeds $500.
v) an insurer may add an installment in the last month of the policy in order to reduce the renewal down payment.
"...b) Whatever payment options an insurer offers, it shall not offer or refuse to offer a particular payment option on any basis, including whether the customer did or did not have previous automobile insurance; except that Insurers shall not be required to make available an installment payment plan to those insureds who, within the last two years, have defaulted in the payment of premiums to an insurer and caused a lapse in the policy.
"...c) Nothing in this rule prohibits an insurer from offering other payment options to an applicant in addition to those described above".
- Bomer OKs Improved Car Insurance Installment Plans (August 28, 1997)
- Commissioner's Bulletin B-0039-97, "...adoption of amendments to the Texas Automobile Rules and Rating Manual, Rule 14 (Installment Payments) and to the Texas Standard Provisions for Automobile Policies, Personal Auto Policy, Special Instructions". (Automobile Series Letter No. 710)