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Texas Administrative Code
Chapter 25. Prepaid Funeral Contracts

Subchapter B. Regulation of Licenses
§25.17. Guaranty Fund.

(a) Fund established. Pursuant to Finance Code Chapter 154, Subchapter H, guaranty fund is established to guarantee performance by sellers and providers of prepaid funeral services. The fund is named the Prepaid Funeral Guaranty Fund, and is supervised by an advisory council composed of members as set out in Finance Code §154.355. The fund is composed of two separate accounts, one for trust-funded contracts and one for insurance-funded contracts.

(b) Advisory Council. The advisory council is named the Guaranty Fund Advisory Council. The consumer representative and the insurance-funded industry representative serve a two-year term beginning on January 1 of an even-numbered year and ending December 31 of the following odd-numbered year. The trust-funded industry representative serves a two-year term beginning on January 1 of an odd-numbered year and ending December 31 of the following even-numbered year. The banking commissioner or the commissioner's official designee serves as the chairperson of the council.

(c) Assessments. The department shall make and collect assessments from all sellers of prepaid funeral benefits pursuant to Finance Code Chapter 154, Subchapter H. Each seller shall remit the amount of its calculated assessment to the department each year with its Renewal or Annual Report filing.

(d) Expenses. The commissioner may use any earnings from the Prepaid Funeral Guaranty Fund for reimbursement of travel expenses incurred by the industry and the consumer representatives of the Guaranty Fund Advisory Council pursuant to the travel guidelines applicable to state employees, and for the expenses of providing any other legislatively mandated action with respect to the Prepaid Funeral Guaranty Fund, including but not limited to audits.

(e) Meetings. The Guaranty Fund Advisory Council shall meet on a periodic basis as determined by the commissioner in order to fulfill the requirements of supervising the operation and maintenance of the Prepaid Funeral Guaranty Fund.

Source: The provisions of this §25.17 adopted to be effective November 5, 2009, 34 TexReg 7597; amended to be effective November 10, 2011, 36 TexReg 7505.

§25.19. Guaranty Fund Claims.

(a) Claims not eligible. In addition to claims excluded under Finance Code §154.359, the following claims are not eligible for payment from the Prepaid Funeral Guaranty Fund:

(1) a claim based on a trust-funded prepaid funeral benefits contract that was purchased prior to August 31, 1987;

(2) a claim based on a prepaid funeral benefits contract purchased from a contract seller that did not hold a permit to sell prepaid funeral benefits at the time of sale;

(3) a claim based on a prepaid funeral benefits contract purchased under a plan that does not pay assessments to the guaranty fund, such as the plan litigated in Sexton v. Mount Olivet Cemetery Association, 720 S.W. 2d 129 (Tex. App.-Austin 1986, no writ) (specifically including, but not limited to, any prepaid funeral benefits purchased from Mount Olivet Cemetery Association);

(4) a claim under an insurance-funded prepaid funeral contract for a loss arising from or relating to the occurrence of one of the following events:

(A) default of a funeral provider under a contract written prior to June 19, 2011;

(B) contract default of a permit holder that occurred prior to September 1, 2009;

(C) the suspension, revocation, or refusal to renew a permit under Chapter 154 of the Finance Code prior to September 1, 2009; or

(D) the bankruptcy, receivership, seizure, or other failure of the permit holder prior to September 1, 2009.

(b) Claimant's filings. A claimant shall file with the department a completed claim form prescribed by the department together with the following documents and information:

(1) a copy of the prepaid funeral contract and any amendments thereto;

(2) evidence of the amount paid on the prepaid funeral contract;

(3) a copy of a certified copy of the death certificate for the contract beneficiary, if applicable;

(4) if the claimant is not the purchaser of the contract, evidence of the claimant’s authority to file a claim and receive any funds awarded;

(5) if claimant is acting for the benefit of a group of purchasers as part of a plan to arrange for a successor permit holder, a copy of the plan, and information required by Finance Code §154.3595(c);

(6) a statement setting forth any special circumstances that may bear on the claim; and

(7) other information that may be pertinent to the claim that is requested by the department.

(1) The Guaranty Fund Advisory Council may delegate to the commissioner the authority to settle and determine claims against the Prepaid Funeral Guaranty Fund up to such amount and with such restrictions as the council may from time to time determine.

(2) A claimant may request that the Guaranty Fund Advisory Council review a determination by the commissioner regarding a claim against the Prepaid Funeral Guaranty Fund by submitting a request for review of the action to the Guaranty Fund Advisory Council within 30 days of receipt of notice of the commissioner's action. Such request shall be addressed to the Guaranty Fund Advisory Council in care of the commissioner and filed with the commissioner on or before the close of business on the last day of the 30-day period. The Guaranty Fund Advisory Council shall review and may revise the commissioner’s determination.

Source: The provisions of this §25.19 adopted to be effective November 5, 2009, 34 TexReg 7597; amended to be effective November 10, 2011, 36 TexReg 7505.

§25.24. What fees must I pay for an examination?

(a) Definitions.

(1) Examination–the process of evaluating the books and records of a permit holder relating to its sale of prepaid funeral benefit contracts to provide all safeguards to protect the prepaid funds and to assure that the funds will be available to pay for prearranged funeral services.

(2) Fiscal year--the 12-month period from September 1st to August 31st.

(3) You, Your or I--a person having a valid permit to sell prepaid funeral benefit contracts issued by the department under Section 154.101 of the Finance Code.

(b) As a prepaid funeral benefits seller, what fees must I pay for department examinations?

(1) An annual assessment must be paid as an examination fee to the department to defray the cost of administering §154.054 of the Finance Code. The amount of your annual assessment is based on the number of outstanding contracts as reflected on your most recent annual report filed with the department. You must pay the annual assessment specified in the following table:

**Annual Assessment Schedule:**
If your number of outstanding contracts is:		Then your annual assessment is:
Over --	But not over --	Then your annual assessment is:
----------	99	$150 plus the amount of your number of outstanding contracts over 0 multiplied by a factor of $3.50
100	499	$500 plus the amount of your number of outstanding contracts over 100 multiplied by a factor of $3.00
500	999	$1,700 plus the amount of your number of outstanding contracts over 500 multiplied by a factor of $2.70
1,000	1,999	$3,100 plus the amount of your number of outstanding contracts over 1,000 multiplied by a factor of $2.50
2,000	2,999	$5,600 plus the amount of your number of outstanding contracts over 2,000 multiplied by a factor of $2.00
3,000	4,999	$7,600 plus the amount of your number of outstanding contracts over 3,000 multiplied by a factor of $0.75
5,000	14,999	$9,100 plus the amount of your number of outstanding contracts over 5,000 multiplied by a factor of $0.25
15,000	----------	$11,600 plus the amount of your number of outstanding contracts over 15,000 multiplied by a factor of $0.15

If the annual assessment is greater than $15,000, your annual assessment is $15,000.

(2) If more than one examination is required in the same fiscal year as a result of your failure to comply with the Finance Code, Chapter 154, this chapter, or a request by the department, you must pay for each additional examination at a rate of $75 per hour for each examiner required to conduct the additional examination and all associated travel expenses.

(3) If you are a new permit holder and have not yet filed your first annual report required by Section 154.052 of the Finance Code, you must pay an examination fee of $75 per hour for each examiner and all associated travel expenses. Your subsequent annual assessment will be calculated in accordance with paragraph (1) of this subsection.

(1) Your annual examination fee (annual assessment) may be billed in quarterly or fewer installments each fiscal year. You must pay a billed installment by ACH debit or by another method if directed to do so by the department. At least 15 days prior to the scheduled ACH transfer, the department will send you a notice specifying the amount of the payment due and the date the department will initiate payment by ACH debit. The commissioner may decrease your annual assessment if it is determined that a lesser amount than would otherwise be collected is adequate to administer the Act.

(2) You will be billed for additional examinations described in subsection (b)(2) of this section with the delivery of the examination report. You must pay this fee upon receipt of the examination report.

Source: The provisions of this §25.24 adopted to be effective March 6, 2003, 28 TexReg 1835; amended to be effective November 10, 2005, 30 TexReg 7210; amended to be effective November 8, 2007, 32 TexReg 7904; amended to be effective November 10, 2011, 36 TexReg 7505.

§25.41. How Do I Provide Information to Consumers on How to File a Complaint and What Action Must I Take When I Receive a Complaint?

(a) Definitions

(1) “Consumer” means an individual who obtains or has obtained a product or service from you that is to be used primarily for personal, family, or household purposes.

(2) "Consumer complaint" means a written complaint you receive from a consumer regarding the manner in which you operate your business selling prepaid funeral benefits or perform your obligations under a prepaid funeral benefits contract or Finance Code, Chapter 154. The term includes a written complaint you receive either directly from the consumer or through the Department. The term does not include an oral complaint.

(3) "Department" means the Texas Department of Banking.

(4) “Privacy notice” means any notice which you give regarding a consumer’s right to privacy as required by a specific state or federal law.

(5) “Required notice” means a notice in a form set forth or provided for in subsection (b) (1) of this section.

(6) “You” or “I” means a prepaid funeral benefits contract seller that is licensed or permitted by the Texas Department of Banking under the Finance Code.

(b) How do I provide notice of how to file complaints?

(1) You must use the following notice in order to let your consumers know how to file complaints: Inquiries should be directed as below. All complaints must be in writing. Concerning the Prepaid Contract: Texas Department of Banking, 2601 North Lamar Boulevard, Austin, Texas 78705; 1-877/276-5554 (toll free); www.dob.texas.gov.

(2) You must provide the required notice in the language in which a transaction is conducted.

(3) You must include the required notice with each privacy notice that you send out. The language and form of the notice must substantially conform to the required notice set out in paragraph (1) of this subsection.

(4) Regardless of whether you are required by any state or federal law to give privacy notices, you must take appropriate steps to let your consumers know how to file complaints by giving them the required notice in compliance with paragraph (1) of this subsection.

(5) You must use the following measures to give the required notice:

(A) You must give the required notice when the consumer first obtains a product or service from you. This may be accomplished by including the required notice in all prepaid funeral benefits contract forms in compliance with §25.3(j) of this title (relating to What Requirements Apply to a Non-Model Contract or Waiver).

(B) Those portions of your website that offer consumer goods and services must contain access to the required notice. The language and form of the notice must substantially conform to the required notice set out in paragraph (1) of this subsection.

(1) You must respond to the consumer complaint in writing on or before the 30th day after the date you receive the consumer complaint.

(2) In your written response, you must:

(A) set out the actions you have taken or plan to take, with a corresponding timeline, to resolve or otherwise dispose of the consumer complaint; or

(B) if you dispute the consumer complaint or do not believe any corrective or other action is required, explain your conclusion and refer to any supporting legal authority.

(3) If the consumer complaint was forwarded to you by the Department, you must send the Department a copy of your response on or before the 5th day after the date you mail the response to the consumer.

(d) Must I keep records of the consumer complaints I receive? Yes. You must keep the records regarding consumer complaints.

Source: The provisions of this §25.41 adopted to be effective January 3, 2002, 26 TexReg 10851; amended to be effective May 21, 2002, 27 TexReg 4325; amended to be effective November 4, 2010, 35 TexReg 9696; amended to be effective November 10, 2011, 36 TexReg 7505.