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A BILL TO BE ENTITLED
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AN ACT
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relating to regulation of residential service contract providers, |
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sellers, and administrators. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter A, Chapter 1304, Occupations Code, is |
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amended by adding Section 1304.0051 to read as follows: |
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Sec. 1304.0051. CONFIDENTIALITY OF CERTAIN INFORMATION. |
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(a) The following information submitted to or maintained by the |
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department under this chapter that pertains to a license applicant |
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or a seller, provider, or administrator is confidential and not |
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subject to disclosure under Chapter 552, Government Code: |
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(1) the financial condition of the applicant, seller, |
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provider, or administrator; or |
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(2) the identity or number of service contract |
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holders. |
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(b) The department may withhold the information described |
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by Subsection (a) without requesting a decision from the attorney |
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general under Subchapter G, Chapter 552, Government Code. |
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SECTION 2. Section 1304.151(b), Occupations Code, is |
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amended to read as follows: |
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(b) If the provider ensures its obligations under |
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Subsection (a)(2), the amount maintained in the reserve account may |
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not be less than an amount equal to 40 percent of the difference |
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between the gross consideration the provider received from |
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consumers from the sale of all service contracts issued and |
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outstanding in this state, and [minus] any claims paid during the |
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preceding twelve-month period. The executive director may review |
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and examine the reserve account. Except as provided by Subsections |
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(b-1) and (b-4), the amount of the security deposit may not be less |
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than $250,000. The provider must submit to the executive director |
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on request a copy of the provider's financial statements that must |
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be prepared in accordance with generally accepted accounting |
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principles, be without qualification as to the going concern status |
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of the provider, and be audited by an independent certified public |
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accountant. The commission by rule may require the provider to |
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submit additional financial reports. |
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SECTION 3. Section 1304.157(c), Occupations Code, is |
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amended to read as follows: |
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(c) Notwithstanding Section 1304.151(a)(1), a provider of a |
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residential service contract may use a reimbursement insurance |
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policy issued by a captive insurance company as defined by Section |
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964.001, Insurance Code, to insure the provider's residential |
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service contracts if the provider maintains a funded reserve equal |
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to not less than 25 percent of the difference between the gross |
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consideration the provider received from consumers from the sale of |
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all the provider's service contracts issued and outstanding in this |
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state, and [minus] any claims paid during the preceding |
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twelve-month period. A reimbursement insurance policy issued to a |
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residential service contract provider in accordance with this |
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subsection: |
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(1) is not subject to Section 1304.152; and |
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(2) is considered to satisfy the requirements of |
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Sections 1304.1025 and 1304.151(a)(1) for purposes of this chapter. |
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SECTION 4. Notwithstanding Section 4.13(b), Chapter 663 |
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(H.B. 1560), Acts of the 87th Legislature, Regular Session, 2021, a |
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license issued by the Texas Real Estate Commission under former |
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Chapter 1303, Occupations Code, before September 1, 2021, is |
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continued in effect until January 1, 2024, as a provider or |
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administrator registration issued by the Texas Department of |
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Licensing and Regulation under Chapter 1304, Occupations Code. |
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SECTION 5. Any information designated as confidential for |
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competitive purposes under former Chapter 1303, Occupations Code, |
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by an applicant, seller, provider, or administrator before the |
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effective date of this Act is confidential and not subject to |
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disclosure under Chapter 552, Government Code. The Texas |
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Department of Licensing and Regulation may withhold the information |
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without requesting a decision from the attorney general under |
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Subchapter G, Chapter 552, Government Code. |
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SECTION 6. This Act takes effect September 1, 2023. |