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Subcommittee advances bill allowing insurers to accept electronic payments for premium-finance loans
Summary
House Bill 772 was approved unanimously in committee; the bill updates how insurance premium-finance loan payments may be made electronically and clarifies allowable processing fees.
The Banking & Consumer Affairs Subcommittee voted unanimously to advance House Bill 772 to the Commerce Committee. The bill updates current law to address electronic payments for insurance premium-finance loans and allows Tennessee insurers to expedite payment of loan installments by preferred electronic methods.
Sponsor Representative (Chair) explained that the measure replicates provisions from other state acts to authorize payment by credit card and other electronic means and to allow collection of insufficiency or handling charges tied to the actual processing fee. “Insurance premium financing is currently regulated by Tennessee Department of Financial Services and subject to the statutory provisions of the Premium Finance Company Act of 1980,” the sponsor said; he added the bill “replicates the provisions from the Industrial Loan and Thrift Company Act related to payment of loan installments by credit card and other electronic means.”
Representative Hale asked whether the bill would permit providers to charge only the actual processing cost. The sponsor affirmed the bill allows charging no more than the processor’s fee and does not create a separate convenience fee.
The clerk reported the vote: “Mr Chairman, you have 7 ayes and 0 nos.” House Bill 772 will move to the Commerce Committee.
