Current through Reg. 49, No. 38; September 20, 2024
(a) Notice. Within
30 days of cancellation of a permit to sell prepaid funeral benefits, the
department shall notify the parties to the contracts sold by the cancelled
permit holder of the cancellation. The notice shall provide information
regarding the purchaser's options, the Prepaid Funeral Guaranty Fund, and the
process for seeking a successor permit holder.
(b) Bid list. The department shall maintain a
bid list of entities that wish to:
(1) bid
for the right to assume a cancelled trust-funded permit holder's obligations
under prepaid funeral contracts and the right to receive the balance of prepaid
funeral funds paid or to be paid under those contracts; or
(2) bid for the right to assume a cancelled
insurance-funded permit holder's obligations under prepaid funeral contracts;
or
(3) bid to provide
administrative and record keeping services related to a cancelled permit
holder's outstanding prepaid funeral contracts.
(c) Solicitation of bids. On or before the
60th day after the date of cancellation of a permit to sell prepaid funeral
benefits, the department shall notify those on the bid list and all permit
holders in the vicinity of the cancelled permit holder of the cancellation. If
the cancelled permit is trust-funded, the department shall additionally notify
all funeral providers in the vicinity of the canceled permit holder of the
cancellation. The commissioner shall have the discretion to combine or group
contracts for bidding and sale purposes. The notice must include:
(1) the name and address of the cancelled
permit holder;
(2) the number and
aggregate dollar amount of unperformed prepaid funeral contracts;
(3) the balance of unearned prepaid funeral
funds in trust or the value of insurance policies related to unperformed
prepaid funeral contracts;
(4) the
date by which sealed bid proposals must be submitted to the department to be
considered for the bid award;
(5)
instructions as to how eligible potential bidders may inspect the cancelled
permit holder's prepaid funeral contract records; and
(6) a statement that, with the exception of
bids to provide administrative and record keeping services, all successful
bidders must have or obtain an appropriate permit to sell prepaid funeral
contracts in Texas.
(d)
Selection considerations. After the deadline has expired for submitting sealed
bids, the commissioner may select a successor to the cancelled permit holder or
may select a provider of administration and record keeping services in a
situation where no acceptable successor permit holder is found.
(1) If the bidder is a permit holder, the
commissioner shall consider:
(A) whether the
bidder has demonstrated an ability to properly manage, maintain, and account
for its own prepaid funeral funds;
(B) whether the bidder has properly remedied
violations of law cited by the department in its examination reports;
(C) whether the bidder has a history of
repeated or continuous violations;
(D) whether the bidder has the ability to
fulfill the terms of the prepaid funeral contract;
(E) whether the bidder poses any other
significant regulatory concern;
(F)
the current or potential claim against the Prepaid Funeral Guaranty Fund;
and
(G) any other relevant
information.
(2) If the
bidder is a non-permit holder funeral provider, the commissioner shall
consider, to the extent applicable, all of the factors listed in paragraph (1)
of this subsection, as applicable, and the following:
(A) the bidder's general reputation in the
community where it is located;
(B)
whether the bidder's business ability, experience, character, and general
fitness warrant the confidence of the public;
(C) any state or federal law enforcement,
administrative, or other action taken against the bidder; and
(D) the bidder's willingness to obtain a
permit from the commissioner to sell prepaid funeral benefits in the State of
Texas and to abide by the statutes and rules governing such permits.
(3) If the bidder is a provider of
administration and record keeping services, the commissioner shall consider the
following:
(A) the bidder's business
experience and knowledge of Chapter 154 of the Finance Code;
(B) the bidder's financial
capacity;
(C) the bidder's fee
structure and its effect on the Prepaid Funeral Guaranty Fund;
(D) the bidder's general
reputation;
(E) whether the
bidder's business ability, experience, character, and general fitness warrant
the confidence of the public;
(F)
any state or federal regulatory or law enforcement, administrative, or other
action taken against the bidder; and
(G) any other relevant information.
(e) Selection of
successor. The commissioner alone shall be responsible for the selection of a
successor permit holder or service provider under this section. However, the
commissioner shall make no contract that obligates the Prepaid Funeral Guaranty
Fund unless approved by the Guaranty Fund Advisory Council.
(f) Rejection of bids. The commissioner may
reject all bid proposals received pursuant to this section.
(1) If all bids for a cancelled trust-funded
permit are rejected, a new bid proposal may be solicited or, alternatively, the
balance of trust-funded prepaid funeral funds paid or to be paid under the
contracts of the cancelled permit holder shall be placed in the Prepaid Funeral
Guaranty Fund for management by the Guaranty Fund Advisory Council. The
department shall manage the prepaid funeral contracts; provided, however, that
the commissioner may thereafter solicit additional bid proposals under
subsection (d) of this section.
(2)
If all bids for a cancelled insurance-funded permit are rejected, a new bid
proposal may be solicited or, alternatively, the department shall manage the
prepaid funeral contracts; provided, however, that the commissioner may
thereafter solicit additional bid proposals under subsection (d) of this
section.
(g) Additional
solicitation of bids. The department may from time to time solicit bids on
prepaid funeral contracts from a cancelled permit for which no bids were
accepted or received as a result of the original or any subsequent bid
solicitations.
(h) Employment of
persons to assist. The department may, with the approval of the Guaranty Fund
Advisory Council, employ persons to assist with the bid solicitation and
selection process as needed.
