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RULE §19.1503Procedures for Charging Fees

(a) A local recording agent may charge a client a service fee to reimburse the agent for actual costs as specifically enumerated in and in accordance with the Insurance Code, Article 21.35A(b). A local recording agent may also charge a client a reasonable service fee for those items listed in Insurance Code, Article 21.35A(c). A local recording agent may not charge a service fee unless the agent notifies the client of the service fee (including for reimbursement of actual costs) and obtains the client's written consent for each item charged under the service fee prior to the local recording agent incurring an expense on behalf of the client.

(b) Local recording agents may, aside from service fees, charge a client policy fees, agent fees, inspection fees and membership dues in accordance with Insurance Code, Article 21.35B.

(c) The local recording agent must follow the procedures for disclosure set out in this subsection when charging a client for these fees. The local recording agent must obtain the client's signature on a disclosure form. The local recording agent must disclose, to a client, the following information in the written disclosure form signed by the client:

  (1) that the agent has notified the client of the agent's reimbursement or fee requirement prior to incurring the expense or providing the service;

  (2) the agent fee, service fee or inspection fee, if any, charged by the agent on the transaction. If a policy fee is charged which is not separately disclosed on the declarations page of the policy or endorsed onto the policy, the agent must disclose the policy fee;

  (3) the toll-free telephone number (1-800-252-3439) of the Texas Department of Insurance and a statement in boldface type advising the client that the client may call that number to obtain information on how to file a complaint if the client has a complaint regarding such fees; and

  (4) a complete, itemized listing of the fees being charged and, if a service fee is charged, a complete itemized listing of the services provided and the corresponding charge for each item under the service fee.

(d) All files relating to fees, including written records of disclosure of fees, must be maintained for a period of five years and must be made available to the Texas Department of Insurance for inspection or copying upon request to insure compliance with this subchapter and Texas Insurance Code, Articles 21.35A and 21.35B.

Source Note: The provisions of this §19.1503 adopted to be effective February 21, 1997, 22 TexReg 1643.

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