Texas Administrative Code
Title 7 - BANKING AND SECURITIES
Part 5 - OFFICE OF CONSUMER CREDIT COMMISSIONER
Chapter 85 - PAWNSHOPS AND CRAFTED PRECIOUS METAL DEALERS
Subchapter A - RULES OF OPERATION FOR PAWNSHOPS
Division 4 - OPERATION OF PAWNSHOPS
Section 85.403 - Insurance

Universal Citation: 7 TX Admin Code § 85.403

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

(a) Insurance provisions. General liability and fire insurance must be maintained in an amount sufficient to protect pledged goods as provided in Texas Finance Code, § 371.154. The insurance policy must specifically cover the loss of pledged goods, including jewelry.

(1) General liability.
(A) At a minimum, the amount of general liability insurance coverage must be $100,000 per occurrence from an insurance company with an A.M. Best rating of B+ or better.

(B) In addition, pawnshops operating more than one licensed location must purchase an additional $10,000 of general liability insurance coverage per each operating location, excluding the first location.

(2) Fire insurance. Fire insurance coverage must be purchased from an insurance company with an A.M. Best rating of B+ or better as follows:
(A) for pawnshops not operating as part of a chain, fire insurance must be purchased in an amount not less than the lesser of:
(i) the amount of pawn loans receivable due the pawnshop at the close of business on December 31st of the preceding year; or

(ii) $100,000;

(B) for pawnshop chains that operate more than one licensed location, fire insurance must be purchased in an amount not less than the lesser of:
(i) one-half the outstanding amount of the total pawnshop chain's pawn loans receivable due on December 31st of the preceding year; or

(ii) $5 million.

(b) Variance. If a pawnshop's unique circumstances create a justifiable reason for not complying with subsection (a) of this section, the pawnshop may submit a written request for variance from this section. The request should explain in sufficient detail why compliance with the section is not feasible and the alternative measures that are proposed to manage the associated risk and protect pledged goods.

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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