(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.
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Source Note: The provisions of this §85.403 adopted to be effective October 1, 2000, 25 TexReg 9435; amended to be effective June 7, 2010, 35 TexReg 3471; amended to be effective July 1, 2014, 39 TexReg 3392 |