Sec. 1303.154. AMOUNT OF SECURITY. (a) Except as provided by Subsection (d), an applicant for a new license must provide security in the amount of $25,000. The amount of the security may not be reduced before the residential service company files a second report under Section 1303.202.

(b) After a residential service company files the second report, the company must maintain security in one of the following minimum amounts based on the amount of claims paid in this state during the preceding calendar year:

(1) $10,000, if the amount of claims paid is less than $50,000;

(2) $25,000, if the amount of claims paid is $50,000 or more but less than $200,000;

(3) $50,000, if the amount of claims paid is $200,000 or more but less than $500,000; and

(4) $100,000, if the amount of claims paid is $500,000 or more.

(c) A revision to the amount of security must be based on the figures a residential service company provides in its report under Section 1303.202. The company shall revise the amount of security as required by the commission not later than the 30th day after the date the company is notified by the commission of the revised amount.

(d) This section does not apply to a residential service company that uses a reimbursement insurance policy to insure its outstanding residential service contracts written in this state in accordance with Section 1303.151(b).

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 3, eff. June 1, 2003.

Amended by:

Acts 2017, 85th Leg., R.S., Ch. 845 (H.B. 2279), Sec. 9, eff. January 1, 2018.