88R23869 SRA-F
 
  By: Goldman H.B. No. 4316
 
  Substitute the following for H.B. No. 4316:
 
  By:  Vasut C.S.H.B. No. 4316
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to regulation of residential service contract providers,
  sellers, and administrators.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subchapter A, Chapter 1304, Occupations Code, is
  amended by adding Section 1304.0051 to read as follows:
         Sec. 1304.0051.  CONFIDENTIALITY OF CERTAIN INFORMATION.
  (a)  The following information submitted to or maintained by the
  department under this chapter that pertains to an applicant for
  registration or a seller, provider, or administrator is
  confidential and not subject to disclosure under Chapter 552,
  Government Code:
               (1)  the financial condition of the applicant, seller,
  provider, or administrator;
               (2)  the identity or number of service contract
  holders; or
               (3)  documents that are claimed, in a manner determined
  by the department, proprietary or confidential for competitive
  purposes.
         (b)  The department may withhold the information described
  by Subsection (a) without requesting a decision from the attorney
  general under Subchapter G, Chapter 552, Government Code.
         SECTION 2.  Section 1304.151(b), Occupations Code, is
  amended to read as follows:
         (b)  If the provider ensures its obligations under
  Subsection (a)(2), the amount maintained in the reserve account may
  not be less than an amount computed by subtracting the amount of any
  claims paid from the product of [equal to] 40 percent and [of] the
  gross consideration the provider received from consumers from the
  sale of all service contracts issued and outstanding in this state
  [, minus any claims paid].  The department shall prescribe a
  calculation form to be used by a provider to calculate the minimum
  amount required to be maintained in the provider's reserve account
  under this subsection. The executive director may review and
  examine the reserve account.  Except as provided by Subsections
  (b-1) and (b-4), the amount of the security deposit may not be less
  than $250,000.  The provider must submit to the executive director
  on request a copy of the provider's financial statements that must
  be prepared in accordance with generally accepted accounting
  principles, be without qualification as to the going concern status
  of the provider, and be audited by an independent certified public
  accountant.  The commission by rule may require the provider to
  submit additional financial reports.
         SECTION 3.  Section 1304.157(c), Occupations Code, is
  amended to read as follows:
         (c)  Notwithstanding Section 1304.151(a)(1), a provider of a
  residential service contract may use a reimbursement insurance
  policy issued by a captive insurance company as defined by Section
  964.001, Insurance Code, to insure the provider's residential
  service contracts if the provider maintains a funded reserve equal
  to not less than an amount computed by subtracting the amount of any
  claims paid from the product of 25 percent and [of] the gross
  consideration the provider received from consumers from the sale of
  all the provider's service contracts issued and outstanding in this
  state [, minus any claims paid].  The department shall prescribe a
  calculation form to be used by a provider to calculate the minimum
  amount required to be maintained in the provider's reserve account
  under this subsection. A reimbursement insurance policy issued to
  a residential service contract provider in accordance with this
  subsection:
               (1)  is not subject to Section 1304.152; and
               (2)  is considered to satisfy the requirements of
  Sections 1304.1025 and 1304.151(a)(1) for purposes of this chapter.
         SECTION 4.  Notwithstanding Section 4.13(b), Chapter 663
  (H.B. 1560), Acts of the 87th Legislature, Regular Session, 2021, a
  license issued by the Texas Real Estate Commission under former
  Chapter 1303, Occupations Code, before September 1, 2021, is
  continued in effect until January 1, 2024, as a provider or
  administrator registration issued by the Texas Department of
  Licensing and Regulation under Chapter 1304, Occupations Code.
         SECTION 5.  Any information designated as confidential for
  competitive purposes under former Chapter 1303, Occupations Code,
  by an applicant, seller, provider, or administrator before the
  effective date of this Act is confidential and not subject to
  disclosure under Chapter 552, Government Code.  The Texas
  Department of Licensing and Regulation may withhold the information
  without requesting a decision from the attorney general under
  Subchapter G, Chapter 552, Government Code.
         SECTION 6.  This Act takes effect September 1, 2023.