1. (a) Pursuant to Finance Code, Chapter 154, Subchapter H, a guaranty fund is hereby created to guarantee performance by sellers of prepaid funeral services. The fund will be named the prepaid funeral guaranty fund, and will be supervised by an advisory council composed of the following: the banking commissioner or the commissioner's official designee, who will sit as the chairperson of the council; the attorney general or the attorney general's official designee; an industry representative appointed by the Finance Commission; and a consumer representative appointed by the Finance Commission. The consumer representative will serve a two-year term beginning on January 1 of an even-numbered year and ending December 31 of the following odd-numbered year. The industry representative will serve a two-year term beginning on January 1 of an odd-numbered year and ending December 31 of the following even-numbered year. Appointments made after January 1 will be deemed to run from January 1 of the even year for the consumer representative, and of the odd year for the industry representative. Neither the industry nor the consumer representative may serve more than two terms.

2. (b) The prepaid funeral guaranty fund will be capitalized as follows.

   1. (1) The Texas Department of Banking shall assess and collect from all sellers of trust-funded prepaid funeral benefits $1.00 for each unmatured contract sold during each calendar year beginning with 1993 and will provide a schedule reflecting this rate to all such sellers for use in reporting the number of contracts each has sold. Each seller shall remit its completed schedule together with the amount of its calculated assessment directly to the department. The rate assessed under this paragraph shall remain at $1.00 for each unmatured contract sold until the fund balance reaches $1 million.
   2. (2) Pursuant to Finance Code, §154.356, the advisory council may make and administer additional assessments on behalf of the fund as needed from time to time in order to pay claims against the fund when the balance of the fund is not sufficient to pay those claims.
3. (c) The commissioner may use any earnings from the fund for the expenses of operating, maintaining, and supervising the fund, including the reimbursement of travel expenses incurred by the industry and the consumer representatives pursuant to the travel guidelines applicable to state employees, and for the expenses of providing any other legislatively mandated action with respect to the fund, including but not limited to audits.
4. (d) The advisory council shall meet on a periodic basis as determined by the commissioner in order to fulfill the requirements of supervising the operation and maintenance of the fund. However, in no event shall the advisory council fail to meet at least once annually.

Source Note:The provisions of this §25.17 adopted to be effective May 16, 1988, 13 TexReg 2079; amended to be effective May 14, 1994, 19 TexReg 3246.