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Senate Bill 778 |
Senate Author: Watson |
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Effective: See below |
House Sponsor: Geren |
Senate Bill 778 amends the Occupations Code to enact the Identity Recovery Service Contract Regulatory Act, which prohibits a person from operating as a provider or administrator of identity recovery service contracts sold in Texas unless the person is registered with the Texas Department of Licensing and Regulation (TDLR), with certain exceptions. The bill establishes requirements for the registration application, renewal, and fees, and requires each provider to meet certain financial security requirements to ensure it can meet its obligations to its contract holders. The bill authorizes a provider to appoint an administrator, sets out the administrator's responsibilities and duties, and specifies that the appointment of an administrator does not affect a provider's responsibility to comply with the act. The bill establishes that marketing, selling, offering for sale, issuing, making, proposing to make, and administering such a contract are exempt from state laws regulating the business of insurance.
Senate Bill 778 prohibits a provider from selling, offering for sale, or issuing an identity recovery service contract in Texas unless the provider gives the contract holder a receipt for, or other written evidence of, the purchase and a copy of the contract within a reasonable period after the date of purchase. The bill sets out requirements for a provider's recordkeeping and for the content of contract forms and disclosures, and establishes the terms by which a contract may be returned, voided, or canceled. The bill prohibits a provider from using certain terms in its name and prohibits a provider or its representative from including certain misleading statements in its contracts or literature. The bill grants TDLR's executive director the authority to conduct investigations to ensure compliance with the act and sets out requirements for the executive director's access to a provider's records to determine such compliance. The bill provides for an administrative penalty, injunction, and civil penalty and makes laws relating to TDLR's general requirements or administrative hearings and procedures and a person's right to a hearing applicable to a disciplinary action taken under these provisions. The bill requires the Texas Commission of Licensing and Regulation, not later than November 1, 2009, to adopt rules to implement the act.
Senate Bill 778 amends the Finance Code to add identity recovery service contracts to the list of items authorized to be included as a separate charge in a retail installment contract, and amends the Occupations Code to include identity recovery as an authorized item to be included in a service contract or vehicle protection product.
Senate Bill 778 takes effect September 1, 2009, except the provisions relating to registration requirements and disciplinary actions take effect January 1, 2010. The changes made by the bill apply to an identity recovery service contract entered into on or after that date.