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Senate Bill 1169 |
Senate Author: Carona |
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Effective: 9-1-11 |
House Sponsor: Hamilton |
Senate Bill 1169 amends Occupations Code provisions relating to the regulation of providers, administrators, and sellers of service contracts and identity recovery service contracts to prohibit a provider or administrator of such contracts sold or issued in Texas from contracting with or using the services of a person to perform an activity that requires registration with the Texas Department of Licensing and Regulation unless that person is appropriately registered. The bill expands the disciplinary actions available to the department, the executive director, and the Texas Commission of Licensing and Regulation for noncompliance with these regulatory provisions and expands remedies available to service contract holders and identity recovery service contract holders.
Senate Bill 1169 revises provisions relating to the funded reserve account option for meeting the financial security requirements of a provider of service contracts or identity recovery service contracts to provide that deposits to the account consist of a statutory deposit of cash, a letter of credit, or a certificate of deposit and to increase the minimum amount of the reserve account. The bill removes as options for allowable security deposits to the account a surety bond, securities, a statutory deposit of cash equivalents, and another form of security allowed under commission rule. The bill sets out procedures relating to the transition following the implementation of such financial security provisions. The bill sets out provisions relating to the distribution of provider funds held in trust in the event of a provider's bankruptcy or a similar event affecting the provider's ability to perform its obligations to its contract holders.
Senate Bill 1169 sets out provisions authorizing a provider to employ or contract for the sale or marketing of service contracts or identity recovery service contracts and relating to cancellation of a contract by a contract holder or provider. The bill prohibits false, deceptive, or misleading statements, or an omitted statement if the omission would be considered misleading, in any written material of a provider; the purchase of a service contract or identity recovery service contract as a condition of certain loans or the sale of property; and certain telemarketing calls to a consumer.