The following words and terms, as used in this chapter and
Texas Occupations Code, Chapter 1304, have the following meanings:
(1) "Buyer" means a "service contract holder" as it
relates to a "depreciation benefit optional member program."
(2) "Dealer" means a motor vehicle dealer licensed
under Texas Occupations Code, Chapter 2301.
(3) "Depreciation benefit optional member program"
means a service contract financed under Chapter 348 or 353, Finance
Code, that pays to the buyer, as a credit toward the purchase of a
replacement vehicle at a participating dealer, an amount less than
or equal to the difference between the purchase price and actual cash
value for a total constructive loss.
(4) "Identity recovery" means a process, through a
limited power of attorney and the assistance of an identity recovery
expert, that returns the identity of an identity theft victim to pre-identity
theft event status.
(5) "Qualified financial institution" means a financial
institution organized and licensed under the laws of the United States,
a state of the United States, or the District of Columbia.
(6) "Service contract" means an agreement that is entered
into for a separately stated consideration and for a specified term
under which a provider agrees to:
(A) repair, replace, or maintain a product, or provide
indemnification for the repair, replacement, or maintenance of a product,
for operational or structural failure or damage caused by a defect
in materials or workmanship or by normal wear;
(B) provide identity recovery, if the service contract
is financed under Chapter 348 or 353, Finance Code;
(C) provide compensation to the lessee or buyer of
a vehicle on the total constructive loss under a depreciation benefit
optional member program; or
(D) provide a service, reimbursement, or payment under
a residential service contact as defined in Texas Occupation Code §1304.003(4)(A)
- (C) and (b)(1) - (4).
(7) "Service contract holder" means a person who purchases
or otherwise holds a service contract.
(8) "Third-party administration of a service contract"
includes any of the following activities performed on behalf of a
service contract provider:
(A) performing or arranging the collection, maintenance,
or disbursement of money to compensate any party for claims or repairs
pursuant to a service contract;
(B) participating in the processing or adjustment of
claims arising under a service contract;
(C) maintaining records required by Texas Occupations
Code, Chapter 1304; or
(D) complying with provider requirements, other than
financial security requirements, of Texas Occupations Code, Chapter
1304.
(9) The term "third party administration of a service
contract" does not include the performance of repairs, or clerical
functions ancillary to the performance of repairs, by a repair facility
that performs no other activities with respect to a service contract.
(10) "Total constructive loss" means a loss of such
significance that the cost of restoring damaged property would exceed
its value after restoration.
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| Source Note: The provisions of this §77.10 adopted to be effective November 16, 2009, 34 TexReg 7791; amended to be effective March 1, 2012, 37 TexReg 1319; amended to be effective July 1, 2018, 43 TexReg 3873; amended to be effective June 15, 2022, 47 TexReg 3455 |
