1. (a) The provider must clearly and conspicuously identify itself on all written service contracts and, effective February 1, 2010, on all written advertising materials that are used by the provider, its administrator(s), or its seller(s).

2. (b) The provider and/or any administrator appointed by the provider must provide service contract holders with a notification that meets all of the following requirements.

   1. (1) The notification must provide the name, mailing address, and telephone number of the department.
   2. (2) The notification must contain a statement that unresolved complaints concerning a registrant or questions concerning the regulation of service contract providers and administrators may be addressed to the department.
   3. (3) The notification must be included on all written service contacts. The notification may be stamped on the contract or printed on a separate sheet and stapled to the contract.
3. (c) The provider and/or any administrator appointed by the provider must provide service contract holders with the provider's complaint resolution procedures.

4. (d) The provider and/or any administrator appointed by the provider must disclose the following information to service contract holders:

   1. (1) the procedures and timeframes for returning a service contract in accordance with Texas Occupations Code §1304.157;
   2. (2) the procedures and timeframes for voiding a service contract in accordance with Texas Occupations Code §1304.158;
   3. (3) the procedures and timeframes for refunding the purchase price of the service contract to the service contract holder in accordance with Texas Occupations Code §1304.158; and
   4. (4) the conditions in which the provider and/or administrator may cancel a service contract in accordance with Texas Occupations Code §1304.159.
5. (e) The provider and/or any administrator appointed by the provider must provide a copy of the service contract to the service contract holder within 45 days from the date of purchase.
6. (f) The provider and/or any administrator appointed by the provider must provide a receipt for or other written evidence of the purchase of a service contract to the service contract holder within 45 days from the date of purchase.

7. (g) Responsibility for Marketing and Sales Activities.

   1. (1) The provider is responsible for the seller's marketing and sales activities as they relate to the marketing and sale of the provider's service contracts pursuant to Texas Occupations Code, Chapter 1304 and this chapter.

   2. (2) The provider is not responsible for the seller's marketing and sales activities as they relate to the marketing and sale of the provider's service contracts if:

      1. (A) the provider has a written contract with a seller;
      2. (B) the contract requires the seller to follow Texas Occupations Code, Chapter 1304 and this chapter;
      3. (C) the provider provides training to the seller about the product and the law;
      4. (D) the provider immediately instructs a seller to correct its practices if the provider obtains knowledge that the seller is violating Texas Occupations Code, Chapter 1304 or this chapter;
      5. (E) the provider terminates its use of a particular seller who fails to correct its practices within 14 days after being instructed by the provider to make corrections; and
      6. (F) the provider notifies the department within 10 days of terminating a seller pursuant to subparagraph (E).
8. (h) A provider shall report to the department within 30 days any change in information required by §77.20 and §77.21.
9. (i) An administrator shall report to the department within 30 days any change in information required by §77.22 and §77.23.
10. (j) Upon notification by the department, the provider and/or any administrator appointed by the provider shall allow the department to audit records required to be maintained by Texas Occupations Code, Chapter 1304. These records include copies of the service contracts marketed, sold, administered or issued in this state.
11. (k) A provider must notify the department no later than 60 days prior to the provider ceasing operations in this state. A provider must notify the department as soon as possible after the provider files for bankruptcy or is placed into receivership and must provide the contact information for the bankruptcy trustee or receiver and the court handling these proceedings.

12. (l) Within 10 days after notifying the department in accordance with subsection (k), a provider must submit to the department:

    1. (1) the names of the service contracts sold or issued by the provider in this state and the number of active service contracts under each service contract name;
    2. (2) the names and addresses of the service contract holders with active service contracts in this state and the remaining amount of time left on these active service contracts; and
    3. (3) any other information determined necessary by the department relating to the provider ceasing operations in this state.
13. (m) A provider must notify service contract holders with active service contracts in this state no later than 30 days prior to the provider ceasing operations in this state. The provider remains financially responsible to service contract holders with active service contracts in this state.

Source Note:The provisions of this §77.70 adopted to be effective November 16, 2009, 34 TexReg 7791.