Texas Finance Code Title 3, Chapter 154 - Prepaid Funeral Services

SUBCHAPTER A GENERAL PROVISIONS

• Texas Section 154.001 - Purpose
  The purposes of this chapter are to: (1) limit the manner in which a person may accept funds in prepayment of funeral services to be...
• Texas Section 154.002 - Definitions
  In this chapter: (1) "Cash advance item" has the meaning assigned by 16 C.F.R. Section 453.1. (1-a) "Commission" means the Finance Commission of Texas. (2)...
• Texas Section 154.003 - Effect On Insurance Laws
  Except as provided by Section 154.004, this chapter does not affect the Insurance Code. Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1,

SUBCHAPTER B POWERS AND DUTIES OF DEPARTMENT

• Texas Section 154.004 - Group Insurance Contracts
  (a) A life insurance company authorized to engage in the business of life insurance in this state may issue a group contract of decreasing term...
• Texas Section 154.051 - Administration Of Chapter; Fees
  (a) The department shall administer this chapter. (b) The commission may adopt reasonable rules concerning: (1) fees to defray the cost of administering this chapter;...
• Texas Section 154.052 - Annual Report
  (a) The department may require a permit holder that has outstanding contracts for prepaid funeral benefits to submit an annual report in the form required...
• Texas Section 154.053 - Records; Examination
  (a) A permit holder that has outstanding contracts for prepaid funeral benefits shall maintain records as required by rule of the commission. (b) The department...
• Texas Section 154.054 - Examination Fee
  (a) For each examination conducted under Section 154.053, the commissioner or the commissioner's agent shall impose on the seller a fee in an amount set...
• Texas Section 154.055 - Disclosure Of Certain Information; Confidentiality
  (a) Information relating to the financial condition of a seller obtained by the department directly or indirectly, through examination or otherwise, other than published statements,...

SUBCHAPTER C PERMITS

• Texas Section 154.056 - Payment Of Restitution Money
  The department shall pay money received under a restitution order to the injured party as ordered. Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff....
• Texas Section 154.101 - Permit Requirement
  A person must hold a permit issued under this subchapter to: (1) sell prepaid funeral benefits, or accept money for prepaid funeral benefits, in this...
• Texas Section 154.102 - Permit Application; Fee
  To obtain a permit to sell or continue to sell prepaid funeral benefits, a person must: (1) be one of the following, if the person...
• Texas Section 154.103 - Issuance Of Permit
  (a) The commissioner may investigate an applicant before issuing an initial permit. (b) The commissioner shall approve the application and issue a permit to the...
• Texas Section 154.104 - Term Of Permit
  (a) A permit is issued for a one-year term. (b) The commission by rule may adopt a system under which permits expire on various dates...
• Texas Section 154.105 - Prohibition On Transfer Of Permit
  A permit is not transferable. Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
• Texas Section 154.106 - Transfer Of Business Ownership
  (a) A permit holder shall notify the department and either the depository of the money held under Subchapter F or the issuer of insurance policy...
• Texas Section 154.107 - Required Renewal For Sellers
  (a) A seller that has outstanding contracts shall renew the seller's permit until the contracts are fully discharged. (b) A seller may renew the seller's...
• Texas Section 154.108 - Renewal Fee
  The commission shall set the renewal fee under Section 154.051. Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997. Amended by Acts...
• Texas Section 154.109 - Grounds For Cancellation Or Suspension Of Or Refusal To Renew Permit
  (a) The commissioner by order may cancel or suspend a permit if the commissioner finds, by examination or other credible evidence, that the permit holder:...
• Texas Section 154.110 - Order To Cancel, Suspend, Or Refuse To Renew Permit
  (a) An order issued under Section 154.109 must state: (1) with reasonable certainty the grounds for the order; and (2) the effective date, which may...

SUBCHAPTER C-1 PRESALE DISCLOSURES

• Texas Section 154.111 - Successor Permit Holder
  (a) The commission shall adopt rules governing the selection of a successor permit holder. (b) A successor permit holder to whom the commissioner transfers a...
• Texas Section 154.131 - Brochure
  (a) A seller, directly or through the seller's designated agent, shall provide an informational brochure to each potential purchaser of a prepaid funeral benefits contract....
• Texas Section 154.132 - Website
  (a) The department shall establish and maintain an Internet website that provides information to enable consumers to make informed decisions relating to the purchase of...

SUBCHAPTER D GENERAL PROVISIONS FOR SALES CONTRACTS

• Texas Section 154.133 - Reference Or Link To Website
  Any sales literature or a website that offers or promotes the sale of prepaid funeral benefits contracts to the public must include a reference or...
• Texas Section 154.151 - Form Of Contract
  (a) The department must approve a sales contract form for prepaid funeral benefits before the form is used. (b) A sales contract for prepaid funeral...
• Texas Section 154.1511 - Cash Advance Items: Non-guaranteed Merchandise And Services
  (a) A purchaser of a prepaid funeral benefits contract may agree to advance funds for all or any portion of the estimated cost of cash...
• Texas Section 154.152 - Representations Regarding Approval Of Permit Holder
  A permit holder may represent that the department has approved or otherwise chosen a prepaid funeral vendor only with the following language: "The Texas Banking...
• Texas Section 154.153 - Allocation Of Sales Price
  A seller may not increase the sales price of an item not covered by this chapter to allocate a lesser sales price to an item...
• Texas Section 154.154 - Agreement To Pay Finance Charge
  A purchaser of a prepaid funeral benefits contract may agree in writing to pay the seller a finance charge in accordance with Chapter 345 on...
• Texas Section 154.155 - Cancellation Of Contract
  (a) A purchaser of a prepaid funeral benefits contract may cancel the contract before maturity by giving written notice of cancellation to the seller on...
• Texas Section 154.1551 - Modification At Time Of Funeral
  (a) The funeral merchandise, funeral services, and cash advance items selected in a fully paid prepaid funeral benefits contract may be modified after the death...
• Texas Section 154.156 - Waiver Of Right Of Cancellation
  (a) The purchaser of a prepaid funeral benefits contract may irrevocably waive the purchaser's right to cancel the contract under Section 154.155. The waiver must...
• Texas Section 154.157 - Performance Of Contract
  Delivery of funeral merchandise before death is not performance, in whole or in part, of a prepaid funeral benefits contract entered into after July 15,...
• Texas Section 154.158 - Enforcement Of Contract
  A seller that violates Section 154.101 may not enforce a prepaid funeral benefits contract, but the purchaser or an heir or legal representative of the...
• Texas Section 154.159 - Administration Of Money Received
  Money received for prepaid funeral benefits shall be administered as prescribed by Section 154.155 and Subchapters E and F, as applicable. Acts 1997, 75th Leg.,...
• Texas Section 154.160 - Agent; Deposit Of Money
  (a) A seller shall designate one or more agents by name or title. (b) The seller shall notify the department of: (1) the designation not...

SUBCHAPTER E INSURANCE-FUNDED PREPAID FUNERAL BENEFITS

• Texas Section 154.161 - Responsibilities Of Funeral Provider
  (a) The funeral provider under a prepaid funeral benefits contract subject to this chapter shall: (1) in compliance with applicable law, protect any nonpublic personal...
• Texas Section 154.201 - Requirements For Solicitation Of Insurance-funded Benefits
  A seller may not solicit an individual's designation of prepaid funeral benefits to be paid from an insurance policy, unless the insurance policy meets the...
• Texas Section 154.202 - Execution Of Contract In Conjunction With Application For Policy
  An insurance-funded prepaid funeral benefits contract must be executed in conjunction with the application for the issuance of the insurance policy. Acts 1997, 75th Leg.,...
• Texas Section 154.2021 - Requirements For Insurance Policies
  (a) An insurance policy used to fund prepaid funeral benefits under this chapter must: (1) be written on a form approved by the Texas Department...
• Texas Section 154.203 - Payment Of Premiums
  (a) The premiums for an insurance policy that funds prepaid funeral benefits may only be collected by a licensed insurance agent appointed by the insurance...
• Texas Section 154.204 - Conversion From Trust-funded Prepaid Funeral Benefits
  (a) The department must approve a conversion from trust-funded prepaid funeral benefits to insurance-funded prepaid funeral benefits as safeguarding the rights and interests of the...
• Texas Section 154.205 - Cancellation Of Insurance-funded Contract
  (a) A purchaser of an insurance-funded prepaid funeral benefits contract may cancel the contract before maturity by giving written notice of cancellation to the permit...
• Texas Section 154.206 - Assignment Of Right To Benefits
  (a) The purchaser of an insurance-funded contract may assign the purchaser's ownership of and rights to benefits under the insurance policy to the seller, the...
• Texas Section 154.207 - Receipt Of Benefits Payable Under Policy
  (a) A seller or funeral provider that has been assigned the benefits payable under an insurance policy funding prepaid funeral benefits may not receive payment...

SUBCHAPTER F TRUST-FUNDED PREPAID FUNERAL BENEFITS

• Texas Section 154.208 - Advisory Committee
  (a) The commissioner shall appoint an advisory committee to review and make recommendations regarding the technical procedures and processes employed by the department to regulate...
• Texas Section 154.251 - Applicability
  (a) This subchapter applies only to money paid or collected on a trust-funded prepaid funeral benefits contract entered into after July 15, 1963. (b) Money...
• Texas Section 154.252 - Retention Of Money For Expenses
  The seller of a trust-funded prepaid funeral benefits contract may retain for the seller's use and benefit an amount not to exceed one-half of all...
• Texas Section 154.253 - Deposit Of Money Paid Or Collected
  (a) Not later than the 30th day after the date of collection, the money, other than money retained as provided by Section 154.252, shall be...
• Texas Section 154.254 - Amount Payable On Cancellation Of Contract
  A purchaser of a trust-funded prepaid funeral benefits contract who cancels the contract during the first year of the contract when payments required under the...
• Texas Section 154.255 - Standard Of Duty Of Depository
  A depository described by Section 154.253(a)(1) shall be held to the standard of duty of a fiduciary in holding, investing, or disbursing the money. Acts...
• Texas Section 154.256 - Standard Of Duty Of Trustee
  A trustee described by Section 154.253(a)(2) shall be held to the standard of duty of a trustee under the Texas Trust Code (Subtitle B, Title...
• Texas Section 154.257 - Investment Plan
  (a) A permit holder or trustee, if the permit holder deposits the money with a financial institution as trustee, shall: (1) adopt a written investment...
• Texas Section 154.260 - Use Of Money To Purchase, Lease, Or Invest In Asset Owned By Seller Or Funeral Provider
  (a) The depository of money under Section 154.253 must obtain the commissioner's prior written approval to use that money to purchase, lease, or invest in...
• Texas Section 154.261 - Withdrawal Of Earnings To Pay Certain Expenses
  (a) The seller of a trust-funded prepaid funeral benefits contract may withdraw money from earnings on an account described by Section 154.253 to pay: (1)...
• Texas Section 154.262 - Withdrawal Of Money On Death Of Beneficiary
  (a) The seller of a trust-funded prepaid funeral benefits contract may withdraw an amount equal to the original contract amount paid by the purchaser and...
• Texas Section 154.263 - Withdrawal Of Earnings Attributable To Contract
  On the maturity date of a trust-funded prepaid funeral benefits contract as provided by Section 154.262 and after the funeral provider has performed its obligations...
• Texas Section 154.264 - Accounting Records
  A seller shall maintain accounting records showing the amount deposited or invested under this subchapter with respect to each contract. Acts 1997, 75th Leg., ch....

SUBCHAPTER G ABANDONED CONTRACTS

• Texas Section 154.265 - Default Under Certain Contracts
  (a) Notwithstanding any other law, the purchaser of a trust-funded prepaid funeral benefits contract may not be considered in default under the contract if: (1)...
• Texas Section 154.301 - Presumption Of Abandonment
  (a) Money paid by a purchaser of a prepaid funeral benefits contract is personal property subject to presumption of abandonment and delivery to the comptroller...
• Texas Section 154.302 - Notice Of Abandoned Money
  On June 30 of each year, a seller that holds money presumed abandoned under Section 154.301(b) shall furnish the commissioner with an acknowledged written notice...
• Texas Section 154.303 - Authorization To Withdraw Money
  (a) Not later than the 15th day after the date the notice required by Section 154.302 is received, the commissioner shall give the seller written...
• Texas Section 154.304 - Delivery To Comptroller Of Abandoned Money And Report
  Not later than the first November 1 after the date the commissioner receives the notice required by Section 154.302, the seller shall deliver to the...
• Texas Section 154.305 - Discharge Of Contractual Obligations; Indemnity Of Seller
  (a) The delivery of abandoned money and reporting to the comptroller under Section 154.304: (1) relieves the seller of the obligations and liabilities under the...
• Texas Section 154.306 - Liability And Obligations Of Comptroller
  (a) The comptroller is liable to the purchaser or beneficiary of a prepaid funeral benefits contract presumed abandoned under this subchapter only to the extent...

SUBCHAPTER H GUARANTY FUND

• Texas Section 154.307 - Recourse Of Purchaser Or Beneficiary
  A purchaser's or beneficiary's sole recourse after a seller has delivered abandoned money and reported to the comptroller under Section 154.304 is to file a...
• Texas Section 154.351 - Maintenance Of Guaranty Fund
  (a) The commission by rule shall establish and the department shall maintain a fund to guarantee performance by sellers of prepaid funeral benefits contracts and...
• Texas Section 154.352 - Assessment On Sales Contracts
  (a) The department shall assess and collect from a seller not more than $1 for each unmatured prepaid funeral benefits contract sold during each calendar...
• Texas Section 154.3525 - Assessment On Insurance-funded Contracts
  (a) The department shall assess and collect from a seller not more than $1 for each insurance-funded contract sold during each calendar year and shall...
• Texas Section 154.353 - Deposit Of Fund Or Portion Of Fund
  (a) The fund or a portion of the fund may be deposited: (1) with the comptroller; (2) with a federally insured financial institution that has...
• Texas Section 154.354 - Use Of Fund Earnings
  The department may use the earnings from the fund to operate and maintain the fund. Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept....
• Texas Section 154.355 - Advisory Council
  Sec. 154.355. ADVISORY COUNCIL. (a) An advisory council composed of the following individuals shall supervise the operation and maintenance of the fund: (1) the commissioner...
• Texas Section 154.3551 - Limit On Liability
  (a) A member of the advisory council is not personally liable for damages arising from the member's official act or omission under this subchapter unless...
• Texas Section 154.356 - Assessment On Outstanding Trust-funded Contracts To Pay Claims
  (a) To pay a claim against the fund when the balance of the trust-funded contract account is insufficient to pay that claim, the advisory council...
• Texas Section 154.3565 - Assessment On Outstanding Insurance-funded Contracts To Pay Claims
  (a) To pay a claim against the fund when the balance of the insurance-funded contract account is insufficient to pay that claim, the advisory council...
• Texas Section 154.357 - Claim Against Seller, Funeral Provider, Or Depository
  The department may assert a claim against a seller, funeral provider, or depository that commits a violation of this chapter that could result in a...
• Texas Section 154.358 - Claims Against Fund
  (a) The payment of a claim or expense from the fund is a matter of privilege and not of right, and a person does not...
• Texas Section 154.359 - Permissible Uses Of Fund
  (a) In addition to uses authorized by Section 154.354, the fund may be used to pay: (1) a loss attributable to the failure or inability...
• Texas Section 154.3595 - Default By Funeral Provider
  (a) This section applies to a permit holder that administers a prepaid funeral benefits contract for which: (1) the permit holder is not the funeral...

SUBCHAPTER I CRIMINAL PENALTIES AND CIVIL REMEDIES

• Texas Section 154.360 - Subrogation
  (a) A person receiving a benefit under this subchapter, including a payment of or on account of a contractual obligation or provision of substitute or...
• Texas Section 154.400 - Investigation And Subpoena Authority
  (a) If the commissioner has a reasonable suspicion of a misallocation or defalcation of prepaid funeral funds or an unauthorized sale of prepaid funeral benefits,...
• Texas Section 154.401 - Criminal Penalty For Certain Violations Of Chapter
  (a) Except as provided by Section 154.402, an officer, director, agent, or employee of a seller commits an offense if the person: (1) makes or...
• Texas Section 154.402 - Criminal Penalty Relating To Deposit Or Withdrawal Of Money
  (a) A person commits an offense if the person: (1) fails to deposit money in compliance with this chapter; or (2) withdraws money in a...
• Texas Section 154.403 - Criminal Penalty For Failure To File Report
  (a) An officer of a seller commits an offense if the officer fails or refuses to file an annual report required by Section 154.052 before...
• Texas Section 154.404 - Criminal Penalty For Failure To Deliver Money To Designated Agent
  (a) A seller or a person acting on behalf of a seller commits an offense if the seller or person: (1) collects money under a...
• Texas Section 154.405 - Criminal Penalty For Agent's Failure To Deposit Certain Money
  (a) A designated agent of a seller commits an offense if the agent fails to deposit money collected under a prepaid funeral benefits contract before...
• Texas Section 154.406 - Administrative Penalty
  (a) After notice and opportunity for hearing, the commissioner may impose an administrative penalty on a person who: (1) violates this chapter or a final...
• Texas Section 154.4061 - Pattern Of Wilful Disregard
  (a) If, after a hearing conducted as provided by Chapter 2001, Government Code, the trier of fact finds that a violation of this chapter or...
• Texas Section 154.407 - Injunctive Relief
  The commissioner may sue in a district court in Travis County or the county in which the violation occurred to enjoin a violation or threatened...
• Texas Section 154.408 - Cease And Desist Order
  (a) The commissioner may issue a cease and desist order to a person if the commissioner finds by examination or other credible evidence that the...
• Texas Section 154.4081 - Emergency Order
  (a) The commissioner may issue an emergency order that takes effect immediately if the commissioner finds that immediate and irreparable harm is threatened to the...
• Texas Section 154.409 - Suit By Attorney General
  (a) The department may notify the attorney general of a violation of this chapter. (b) The attorney general shall institute suit in the name of...
• Texas Section 154.410 - Quo Warranto Proceedings
  (a) The attorney general may institute a quo warranto proceeding in a district court of Travis County to forfeit the charter or the right to...
• Texas Section 154.411 - Restitution
  The commissioner may issue an order to a person requiring restitution if, after notice and opportunity for hearing, the commissioner finds that the person: (1)...
• Texas Section 154.412 - Seizure Of Prepaid Funeral Accounts And Records
  (a) The commissioner may issue an order to seize accounts in which prepaid funeral funds, including earnings, may be held and may issue an order...
• Texas Section 154.413 - Notification Of Purchaser
  Not later than the 30th day after the date prepaid funeral money is seized under Section 154.412, the commissioner may notify each known person who...
• Texas Section 154.414 - Liquidation Of Business And Affairs Of Person Following Seizure Of Money And Records
  After an order issued under Section 154.412(a) becomes final and unappealable, the commissioner may petition a district court in Travis County or in the county...
• Texas Section 154.415 - Prohibition Order
  (a) The commissioner may prohibit a person from participating in the business of prepaid funeral benefits sales if the commissioner determines from examination or other...
• Texas Section 154.416 - Application For Release From Prohibition Order
  (a) After the expiration of 10 years from the date of issuance, a person who is subject to a prohibition order issued under Section 154.415,...

Last modified: September 28, 2016