31 May Texas Attorney General Reached Settlement Agreement with Universal Underwriters to Refund $2.4 Million to Auto Credit Insurance Policyholders
Texas Attorney General, Greg Abbott, reached a settlement last month with Universal Underwriters Life Insurance Company who unlawfully withheld insurance premiums from more than 12,000 Texans who paid off their vehicle loans early.
Under the terms of the settlement, Universal Underwriters agreed to refund insurance premiums worth $2.4 million to Texas policyholders whose loans terminated between 2002 and 2006. The company will also pay $125,000 in attorneys’ fees to the state.
Universal Underwriters, a Kansas company, sold policies that were intended to cover vehicle payments in the event the borrower died or became disabled. Customers who bought single-premium policies paid for the insurance in a lump sum, typically when they purchased their vehicles.
The full cost of the credit insurance policy was bundled into the buyer’s vehicle loan and the coverage period lasted through the term of the vehicle loan which in some instances, could be as long as six years. Under the Texas Insurance Code, Universal was required to refund the insurance premiums unearned portion to those customers who paid off their loans early.
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