(a) Pursuant to Occupations Code §651.159, the
Texas Funeral Service Commission (herein referred to as the "TFSC"),
the Texas Department of Insurance (herein referred to as the "TDI"),
and the Texas Department of Banking (herein referred to as the "DOB")
hereby adopt the following joint memorandum of understanding (JMOU)
relating to prepaid funeral benefits as defined in Finance Code Chapter
154. The TFSC, TDI, and DOB intend this memorandum of understanding
to serve as a vehicle to assist the three agencies in their regulatory
activities, and to make it as easy as possible for a consumer with
a complaint to have the complaint acted upon by all three agencies,
where appropriate. In order to accomplish this end, where not statutorily
prohibited, the three agencies will share information between the
agencies which may not be available to the public generally under
the Public Information Act, Government Code Chapter 552. Such information
will be transmitted between agencies with the understanding that it
is considered confidential, is being furnished to the other agencies
in furtherance of their joint responsibilities as state agencies in
enforcing their respective statutes, and that it may not be disseminated
to others except as required.
(b) Responsibilities of each agency in regulating prepaid
funeral benefits:
(1) The Texas Funeral Service Commission is responsible
for the following:
(A) licensing funeral directors, embalmers, provisional
funeral directors, provisional embalmers, crematory, and funeral establishments.
The TFSC may refuse to license a person or establishment which violates
Finance Code Chapter 154 under Occupations Code §651.460(b)(3);
(B) taking action under Occupations Code §651.460(b)(3)
against any licensee violating Finance Code Chapter 154; and
(C) taking action under Occupations Code §651.460(b)(3)
against any funeral director in charge, crematory owner, and/or funeral
establishment owner for violations of Finance Code Chapter 154 by
persons directly or indirectly connected to the crematory or funeral
establishment.
(2) The Texas Department of Banking is responsible
for administering Finance Code Chapter 154, and 7 Texas Administrative
Code (TAC) Chapter 25, including, but not limited to, the following:
(A) bringing enforcement actions against any person,
including licensees of TFSC and TDI, who violate Finance Code Chapter
154 and/or 7 TAC Chapter 25; and
(B) all other actions authorized by Finance Code Chapter
154 and 7 TAC Chapter 25.
(3) The Texas Department of Insurance is responsible
for the following:
(A) regulating insurers that issue or propose to issue
life insurance policies or annuity contracts which may fund prepaid
funeral contracts;
(B) regulating individuals/entities that perform the
acts of an insurance agent(s) as defined in the Insurance Code Article
21.02 and Chapter 101;
(C) regulating insurance/annuity contracts that may
fund prepaid funeral contracts;
(D) regulating unfair trade practices relating to the
insurance/annuity contracts which may fund prepaid funeral contracts
pursuant to the Insurance Code Article 21.21;
(E) regulating unfair claims settlement practices by
insurance companies pursuant to the Insurance Code Chapter 542.
(c) Procedures used by each agency in exchanging information
with or referring complaint to one of the other agencies.
(1) Exchanging information. If, upon receipt of a complaint,
or during the course of an investigation, an agency (referred to as
the receiving agency) receives any information that might be deemed
of value to another of the agencies (referred to as the reviewing
agency), the receiving agency will contact the reviewing agency and
will forward the relevant information to the reviewing agency at its
request.
(2) Referral of complaints for handling. When an agency
receiving a complaint refers the complaint to another agency for handling,
the receiving agency will contact the complainant in writing informing
him or her of the referral, provide contact information to the reviewing
agency's processing of the complaint.
(3) Complaint procedures. The three agencies will work
together to establish procedures to ensure complaints will be fully
resolved by the reviewing agency.
(d) Procedures to be used by each agency in investigating
a complaint.
(1) All agencies.
(A) Each agency will develop internal complaint procedures
for violations relating to prepaid funeral benefits. The procedures
should at a minimum provide for:
(i) identification of necessary data and documents
to be obtained from the complainant; and
(ii) such other steps deemed necessary for the agency
to perform an adequate and appropriate investigation.
(B) Each agency may assist either of the other agencies
with investigations relating to prepaid funeral benefits.
(2) The Texas Funeral Service Commission.
(A) Complaints received by the TFSC will be logged
in and investigated as required under Occupations Code Chapter 651.
A complaint about violations of Finance Code Chapter 154 and/or 7
TAC Chapter 25 will be referred to the DOB.
(B) If disciplinary action against a licensee of the
TFSC is found to be appropriate, the matter will be referred to the
Administrator of Consumer Affairs & Compliance Division of TFSC.
(C) If the complaint involves a matter handled by either
the DOB or TDI, as well as a violation of the TFSC statutes or regulations,
it will be referred to the appropriate agency for further action.
DOB will be primarily responsible for enforcing violations of Finance
Code Chapter 154 or 7 TAC Chapter 25. The agencies will coordinate
their investigations to avoid duplication of effort.
(3) Texas Department of Banking.
(A) Complaints received by the Special Audits Division
will be entered into a complaint log and assigned a reference number.
If, after agency notice to the subject of the complaint, the complaint
is not resolved, the DOB will investigate.
(B) If disciplinary action against a person who violated
Finance Code Chapter 154 or 7 TAC Chapter 25 is appropriate, the matter
will be referred to the agency's legal staff.
(C) If the complaint involves a matter handled by either
the TDI or TFSC, as well as a violation of Finance Code Chapter 154
or 7 TAC Chapter 25, the DOB will coordinate with those agencies DOB
will be primarily responsible for enforcing violations of Finance
Code Chapter 154 or 7 TAC Chapter 25.
(D) In the event that the DOB issues an order against
a person or entity who is a licensee under the jurisdiction of the
TFSC or the TDI, the DOB will send the TFSC and the TDI a copy of
the order.
(4) Texas Department of Insurance.
(A) Complaints received by the Consumer Protection
Division of TDI will be logged in and investigated, except that if
a complaint is solely violations of Finance Code Chapter 154 and/or
7 TAC Chapter 25, the complaint will be referred to the DOB. Other
areas of TDI can be called upon for assistance in the investigation
of the complaint where appropriate.
(B) If disciplinary or other regulatory action against
a licensee of the TDI is found to be appropriate, the matter will
be referred to the Compliance Intake Unit of TDI.
(C) If the complaint involves a matter handled by either
the DOB or TFSC, as well as a violation of the TDI statutes or regulations,
it will be referred to the appropriate agency for further action.
DOB will be primarily responsible for enforcing violations of Finance
Code Chapter 154 or 7 TAC Chapter 25. The agencies will coordinate
their investigations to avoid duplication of effort.
(D) In the event that the Commissioner of Insurance
issues an order against a person that also sells, funds or provides
prepaid funeral benefits or is subject to the jurisdiction of the
DOB or the TFSC, the TDI will send the DOB and the TFSC a copy of
the order.
(e) Actions the agencies regard as deceptive trade
practices.
(1) The TFSC, the DOB, and the TDI regard as deceptive
trade practices those actions found under Business and Commerce Code §17.46.
(2) With respect to trade practices within the business
of insurance, the TDI regards as deceptive trade practices those actions
found under Insurance Code Chapter 541, other chapters of the Code
and the regulations promulgated by the TDI there under.
(f) Information the agencies will provide consumers
and when that information is to be provided.
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