Texas Register, Volume 38, Number 31, Pages 4821-4956, August 2, 2013 Page: 4,841
4821-4956 p. ; 28 cm.View a full description of this periodical.
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The Texas Department of Licensing and Regulation (Depart-
ment) proposes a new rule at 16 Texas Administrative Code
(TAC) Chapter 77, 77.24, and amendments to existing rules
77.70 and 77.80, regarding the Service Contract Providers
and Administrators program.
Senate Bill 1388 (S.B. 1388), 83rd Legislature, Regular Session
(2013), changed the statutory structure for regulating identity re-
covery service contracts that are financed under Texas Finance
Code, Chapters 348 or 353. S.B. 1388 repealed the stand-alone
regulation under Texas Occupations Code, Chapter 1306, relat-
ing to the regulation of providers, administrators and sellers of
identity recovery service contracts, and consolidated the regu-
lation of these identity recovery service contracts under Texas
Occupations Code, Chapter 1304, relating to the regulation of
providers, administrators and sellers of service contracts. The
proposed rules under Chapter 77 are necessary to implement
the changes made by S.B. 1388 to Texas Occupations Code,
Chapter 1304.
The proposed repeal of the rules for the Identity Recovery Ser-
vice Contract Provider and Administrator program is published
separately in this issue of the Texas Register.
S.B. 1388 made the following changes to Texas Occupation
Code, Chapter 1304: (1) added the definition of "identity re-
covery" as it was defined under Chapter 1306; (2) amended
the current definition of "service contract" to include service
contracts that only provide for identity recovery services and
that are financed under Texas Finance Code, Chapters 348 or
353 ("identity recovery service contracts" that were regulated
under Chapter 1306); (3) added the quarterly reporting and fee
requirements for identity recovery service contracts, which were
included in Chapter 1306; and (4) added a provision to protect
information regarding the number of contracts sold or issued
by a provider that is submitted as part of the quarterly reporting
and fee requirements, which was included in Chapter 1306.
The proposed rules add new 16 TAC 77.24 to implement new
Texas Occupation Code 1304.1035, as added by S.B. 1388, re-
lated to identity recovery service contract quarterly reports and
fees. New proposed 77.24 incorporates the provisions under
existing rule 16 TAC 90.22 into the Chapter 77 rules. Section
90.22 is being repealed as part of a separate rulemaking pub-
lished in this issue of the Texas Register.
The proposed rules also amend 16 TAC 77.70, Responsibil-
ities of Providers and Administrators, to add a new subsection
(e) to incorporate the disclosures specific to identity recovery
service contracts that are located under existing rule 16 TAC
90.70(d)(1) - (4). The provisions under 16 TAC 90.70(d)(1)
- (4) were adopted to implement Texas Occupations Code
1306.106, Form of Identity Recovery Service Contract and Re-
quired Disclosures. Among the required disclosures, 1306.106
required an identity recovery service contract provider to identify
the contract holder, to disclose the terms under which the con-
tract is sold, and to specify the services to be provided under the
contract and any limitations, exceptions or exclusions. Section
90.70(d)(1) - (4) identified specific terms and conditions that
must be addressed as part of these disclosures.
As stated above, S.B. 1388 consolidated the regulation of iden-
tity recovery service contracts into Texas Occupations Code,
Chapter 1304. While S.B. 1388 repealed Texas Occupations
Code, Chapter 1306, the same statutory provisions regarding
disclosures are found in Chapter 1304 under 1304.156, Form
of Service Contract and Required Disclosures. The proposeddisclosures specific to identity recovery service contracts, which
are being added as 16 TAC 77.70(e), are the same as the dis-
closures required under existing rule 16 TAC 90.70(d)(1) - (4).
Section 90.70 is being repealed as part of a separate rulemaking
published in this issue of the Texas Register.
The proposed rules also amend 16 TAC 77.80 related to fees to
reflect the quarterly fees required under new Texas Occupations
Code 1304.1035, as added by S.B. 1388.
William H. Kuntz, Jr., Executive Director, has determined that for
the first five-year period the proposed rules are in effect there will
be an increase in revenue to the state as a result of implement-
ing and administering the new statutory provisions under Texas
Occupations Code, Chapter 1304, and the proposed rules under
16 TAC Chapter 77, related to the quarterly fee requirements for
identity recovery service contracts. This increase, however, is
expected to be offset by the decrease in revenues from the re-
peal of Texas Occupations Code, Chapter 1306, and the repeal
of rules under 16 TAC Chapter 90 (published in the Proposed
Rules section of this issue of the Texas Register). It is anticipated
that there will be a de minimus decrease in revenue to the state
related to the registration and renewal fees due to: (a) the differ-
ences in fee structures under Texas Occupations Code, Chap-
ter 1304, and 16 TAC Chapter 77 and under Texas Occupations
Code, Chapter 1306, and 16 TAC Chapter 90; and (b) the re-
vised definition of "service contract" under Chapter 1304, which
would allow a provider or administrator that formerly needed two
registrations - one under Chapter 1304 and one under Chapter
1306 - to only need one registration under the consolidated reg-
ulation under Chapter 1304.
Mr. Kuntz also has determined that for each year of the first
five-year period the proposed rules are in effect, the public ben-
efit will be streamlined regulation from consolidating the reg-
ulation of service contracts and identity recovery service con-
tracts into one set of rules under 16 TAC Chapter 77. S.B. 1388
eliminated the stand-alone regulation under Texas Occupations
Code, Chapter 1306, relating to the regulation of providers, ad-
ministrators and sellers of identity recovery service contracts,
and consolidated the regulation of these identity recovery ser-
vice contracts under Texas Occupations Code, Chapter 1304,
relating to the regulation of providers, administrators and sellers
of service contracts. The proposed rules herein implement the
statutory changes made to Chapter 1304.
The proposed repeal of the rules for the Identity Recovery Ser-
vice Contract Provider and Administrator program is published
separately in this issue of the Texas Register.
There will be no adverse economic effect on small or micro-busi-
nesses or to persons who are required to comply with the rules as
proposed. For providers and administrators currently regulated
under Chapter 1304, registration and renewal fees remain the
same. For providers and administrators formerly regulated un-
der Chapter 1306, the registration and renewal fees under Chap-
ter 1304 will be the same as or less than the fees formerly re-
quired under Chapter 1306. Also, any provider or administrator
that needed two registrations - one under Chapter 1304 and one
under Chapter 1306 - will only need one registration under the
consolidated regulation under Chaptr 1304. For providers for-
merly regulated under Chapter 1306, the statutory quarterly fees
under Chapter 1304 will be the same as the statutory quarterly
fees formerly required under Chapter 1306. The statutory quar-
terly fees only apply to providers of service contracts described
under 1304.003(a)(2)(B) ("identity recovery service contracts").PROPOSED RULES August 2, 2013 38 TexReg 4841
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Texas. Secretary of State. Texas Register, Volume 38, Number 31, Pages 4821-4956, August 2, 2013, periodical, August 2, 2013; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth326805/m1/21/: accessed April 26, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.