| (a) Definitions. The following words and terms, when
used in this section, shall have the following meanings, unless the
context clearly indicates otherwise:
(1) Commissioner--The banking commissioner of Texas.
(2) Official--An individual applying for or holding
a permit, or an owner, officer, or holder of more than 25 percent
of the outstanding shares of an applicant for or holder of a permit
that is an entity.
(3) Permit--The authorization issued by the commissioner
pursuant to Finance Code, Chapter 154, Subchapter C, to sell or accept
money for prepaid funeral benefits, or solicit an individual's designation
of prepaid funeral benefits to be paid out of a fund, investment,
security, or contract.
(b) Effect of criminal conviction on proposed or existing
permit. The commissioner may deny an application for a permit, or
cancel or suspend a permit if an official has been convicted of a
crime which directly relates to the duties and responsibilities of
a seller or servicer of prepaid funeral benefits contracts. Adverse
action by the commissioner in response to a conviction of a crime
specified in subsection (c) of this section is subject to mitigating
circumstances and rights of the applicant or permit holder as specified
in subsections (d) - (h) of this section.
(c) Crimes directly related to fitness for permit.
The sale and servicing of prepaid funeral benefits involves or may
involve representations to prospective plan purchasers, collection
and investment of money paid by purchasers of prepaid funeral benefits,
payment of premiums on insurance policies to fund the benefits, provision
of funeral services on matured contracts, and compliance with reporting
requirements to governmental agencies. Consequently, a crime involving
the misrepresentation of costs or benefits of a product or service,
the improper handling of money or property entrusted to the person
for the future benefit of another, or the failure to file a governmental
report or the filing of a false report is a crime directly related
to the duties and responsibilities of a permit holder, including a
crime involving:
(1) fraud, misrepresentation, deception, or forgery;
(2) breach of trust or other fiduciary duty;
(3) dishonesty or theft;
(4) violation of a statute of this or another state
governing prepaid funeral benefits plans;
(5) violation of a statute of this or another state
governing the provision of funeral services;
(6) failure to file a required report with a governmental
body, or filing of a false report; or
(7) attempt, preparation, or conspiracy to commit one
of the preceding crimes.
(d) Mitigating considerations. In determining whether
a conviction for a crime specified in subsection (d) of this section
renders an official presently unfit to be a permit holder, the commissioner
shall consider:
(1) the extent and nature of the official's past criminal
activity;
(2) the age of the official at the time of the commission
of the crime;
(3) the time elapsed since the official's last criminal
activity;
(4) the conduct and work activity of the official prior
to and following the criminal activity;
(5) the official's rehabilitation or rehabilitative
effort while incarcerated or following release; and
(6) the official's present fitness for a permit, evidence
of which may include letters of recommendation from prosecution, law
enforcement, and correctional officers who prosecuted, arrested, or
had custodial responsibility for the official, the sheriff and chief
of police in the community where the official resides, and other persons
in contact with the convicted official.
(e) Required documentation. The applicant must, to
the extent possible, secure and provide to the commissioner reliable
documents and/or testimony evidencing the information required to
make a determination under subsection (d) of this section, including
the recommendations of the prosecution, law enforcement, and correctional
authorities. The applicant must also furnish proof in such form as
may be required by the commissioner that the official has maintained
a record of steady employment, has supported such official's dependents,
has otherwise maintained a record of good conduct, and has paid all
outstanding court costs, supervision fees, fines, and restitution
as may have been ordered in all criminal cases in which the official
has been convicted.
(f) Notification of adverse action. If a permit application
is denied, or if a permit is canceled or suspended because of the
criminal conviction of an official, the commissioner will so notify
the applicant or permit holder in writing. The notification must include
a statement of the reasons for the action and a description of the
procedure for administrative or judicial review of the action.
(g) Administrative hearing. An applicant whose permit
application is denied, or a permit holder whose permit is suspended
or canceled may request a hearing. A hearing on an order of suspension
or cancellation must be requested not later than the 15th day after
the date the order is mailed. A hearing is subject to the provisions
of the Administrative Procedure Act, Chapter 2001, Government Code
and the provisions of Chapter 9, Subchapter B of this title (relating
to Contested Case Hearings).
(h) Judicial review. An applicant whose permit application
has been denied, or a permit holder whose permit has been suspended
or canceled because of the criminal conviction of an official may
appeal a final order as set forth in Government Code, Chapter 2001,
Subchapter G.
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