During the 81st Legislative Session, lawmakers passed House Bill 3762 ("HB 3762"), which amended Section 154.102 of the Finance Code to add a provision which provides that to obtain a permit to sell or continue to sell prepaid funeral benefits contracts issued under Chapter 154 of the Finance Code, a person may be an insurance company or the insurance holding company for an insurance company, if the insurance company does not have the authority under its domiciliary law to directly hold a permit issued under Chapter 154 of the Finance Code.
Texas insurance laws govern the formation and licensing of insurance companies and entities engaged in the business of insurance. These entities are regulated by the Texas Department of Insurance. Insurance laws limit the activities of these insurance companies and entities engaging in the business of insurance solely to engaging in the business of insurance, as more specifically set forth in the laws governing the formation and licensing of each type of entity under the Insurance Code. Texas laws which govern the formation and licensing of insurance companies and entities engaged in the business of insurance do not extend to non insurance holding companies affiliated with insurance companies or entities engaged in the business of insurance.
- Insurance companies and entities engaged in the business of insurance which are domiciled in Texas and obtain a certificate of authority from the Department of Insurance are not permitted to offer or sell prepaid funeral benefits or engage in the business of offering or selling prepaid funeral benefits.
- Non insurance companies within an insurance company holding system company and affiliated with an insurance company or entity engaged in the business of insurance and domiciled in Texas may obtain and hold a permit issued under Chapter 154 of the Finance Code to offer or sell prepaid funeral benefits under HB 3762 and may engage in offering and selling prepaid funeral benefits after obtaining a permit under Chapter 154 of the Finance Code.
Any Texas domiciled insurance company or entity engaged in the business of insurance which obtained a certificate of authority from the Department of Insurance and was issued a permit to offer or sell prepaid funeral benefits issued under Chapter 154 of the Finance Code prior to the enactment of HB 3762 was not permitted to offer or sell prepaid funeral benefits under Texas insurance laws or the certificate of authority issued to these insurance companies and entities engaged in the business of insurance. These entities will be required to surrender and cancel their permits to sell prepaid funeral benefits at the time the permit is to be renewed under the provisions of Chapter 154 of the Finance Code and refrain from offering, selling, or continuing to sell prepaid funeral benefits after the surrender of their permit.
Contact for questions: Godwin Ohaechesi, Director of Company Licensing & Registration, 512-322-5076 or Godwin.Ohaechesi@tdi.state.tx.us.
Mike Geeslin
Commissioner of Insurance