16 Tex. Admin. Code § 77.40 - Financial Security-General Requirements
(a)
A provider must maintain financial security to ensure the faithful performance
of a provider's obligations to its service contract holders and for the benefit
of those service contract holders who suffer actual financial loss due to the
provider's failure to perform those obligations.
(b) A provider must submit in a manner
prescribed by the department proof of one of the forms of financial security
that meets the requirements of Texas Occupations Code §
1304.151 and/or
§1304.152:
(1) a reimbursement insurance
policy;
(2) a funded reserve
account and a security deposit; or
(3) net worth of at least $100
million.
(c) A provider
of a residential service contract electing to provide financial security with a
reimbursement insurance policy may use a policy issued by a captive insurance
company in accordance with Texas Occupations Code §
1304.157(c).
A provider so electing must also maintain the funded reserve required by that
section.
(d) Whichever form of
financial security the provider uses must be maintained by the provider during
the entire time the provider continues to do business in this state or is
registered to do business in this state and until the provider has performed or
otherwise satisfied all liabilities and obligations to its service contract
holders in this state.
(e) If any
form of financial security is canceled or lapses during the term of the
provider's registration, the provider may not sell or issue a new service
contract after the effective date of the cancellation or lapse, unless and
until the provider files with the executive director a new form of financial
security that meets the financial security requirements provided by Texas
Occupations Code, Chapter 1304 and this chapter.
(f) Cancellation or lapse of the financial
security does not affect the provider's liability for a service contract sold
or issued by the provider before or after the effective date of the
cancellation or lapse.
Notes
State regulations are updated quarterly; we currently have two versions available. Below is a comparison between our most recent version and the prior quarterly release. More comparison features will be added as we have more versions to compare.
No prior version found.