Texas Administrative Code
Title 16 - ECONOMIC REGULATION
Part 4 - TEXAS DEPARTMENT OF LICENSING AND REGULATION
Chapter 77 - SERVICE CONTRACT PROVIDERS AND ADMINISTRATORS
Section 77.10 - Definitions

Universal Citation: 16 TX Admin Code § 77.10

Current through Reg. 50, No. 13; March 28, 2025

The following words and terms, as used in this chapter and Texas Occupations Code, Chapter 1304, have the following meanings:

(1) "Buyer" means a "service contract holder" as it relates to a "depreciation benefit optional member program."

(2) "Dealer" means a motor vehicle dealer licensed under Texas Occupations Code, Chapter 2301.

(3) "Depreciation benefit optional member program" means a service contract financed under Chapter 348 or 353, Finance Code, that pays to the buyer, as a credit toward the purchase of a replacement vehicle at a participating dealer, an amount less than or equal to the difference between the purchase price and actual cash value for a total constructive loss.

(4) "Identity recovery" means a process, through a limited power of attorney and the assistance of an identity recovery expert, that returns the identity of an identity theft victim to pre-identity theft event status.

(5) "Qualified financial institution" means a financial institution organized and licensed under the laws of the United States, a state of the United States, or the District of Columbia.

(6) "Service contract" means an agreement that is entered into for a separately stated consideration and for a specified term under which a provider agrees to:

(A) repair, replace, or maintain a product, or provide indemnification for the repair, replacement, or maintenance of a product, for operational or structural failure or damage caused by a defect in materials or workmanship or by normal wear;

(B) provide identity recovery, if the service contract is financed under Chapter 348 or 353, Finance Code;

(C) provide compensation to the lessee or buyer of a vehicle on the total constructive loss under a depreciation benefit optional member program; or

(D) provide a service, reimbursement, or payment under a residential service contact as defined in Texas Occupation Code §1304.003(4)(A)-(C) and (b)(1)-(4).

(7) "Service contract holder" means a person who purchases or otherwise holds a service contract.

(8) "Third-party administration of a service contract" includes any of the following activities performed on behalf of a service contract provider:

(A) performing or arranging the collection, maintenance, or disbursement of money to compensate any party for claims or repairs pursuant to a service contract;

(B) participating in the processing or adjustment of claims arising under a service contract;

(C) maintaining records required by Texas Occupations Code, Chapter 1304; or

(D) complying with provider requirements, other than financial security requirements, of Texas Occupations Code, Chapter 1304.

(9) The term "third party administration of a service contract" does not include the performance of repairs, or clerical functions ancillary to the performance of repairs, by a repair facility that performs no other activities with respect to a service contract.

(10) "Total constructive loss" means a loss of such significance that the cost of restoring damaged property would exceed its value after restoration.

Disclaimer: These regulations may not be the most recent version. Texas may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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