The fund may be used for several specified funeral-contract related expenses and losses, but it cannot be made to pay more than the contract’s written terms, and claims covered by other sources may not be approved.
Sec. 154.359. PERMISSIBLE USES OF FUND. (a) In addition to uses authorized by Section 154.354, the fund may be used to pay: (1) a loss attributable to the failure or inability of a permit holder or funeral provider to perform its obligations under a prepaid funeral benefits contract; (2) expenses of a plan to arrange for another permit holder or funeral provider to assume the obligations of the permit holder or funeral provider under a prepaid funeral benefits contract or a group of prepaid funeral benefits contracts if the commissioner finds, with the advice and consent of the advisory council, that the plan is reasonable and in the best interests of the contract beneficiaries; (3) administrative expenses related to servicing and handling outstanding prepaid funeral benefits contracts: (A) that have not been assumed by another permit holder; or (B) the obligations under which have not been assumed by another funeral provider; (4) expenses for administering the receivership of an insolvent permit holder or funeral provider if the permit holder's or funeral provider's assets are insufficient to pay those expenses; and (5) expenses to employ and compensate a consultant, an agent, legal counsel, an accountant, and any other person appropriate and consistent with the purpose of the fund, as determined by the advisory council. (b) The fund may not be required to pay any claimant an amount that exceeds the contractual obligations specified by the express written terms of the prepaid funeral benefits contract, including: (1) a claim based on marketing materials; (2) a claim based on side letters or other documents that do not comply with the requirements of this chapter; (3) a claim based on misrepresentation of the benefits conferred by the contract or a funding insurance policy; or (4) a claim for court costs, attorney's fees, penalties, or consequential or incidental damages. (c) A claim may not be approved for a loss to the extent the claim is insured, bonded, or otherwise covered, protected, or reimbursed from other sources, including coverage provided by the Texas Life and Health Insurance Guaranty Association under Chapter 463, Insurance Code. Added by Acts 2009, 81st Leg., R.S., Ch. 1190 (H.B. 3762), Sec. 29, eff. September 1, 2009. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 14 (S.B. 567), Sec. 11, eff. September 1, 2011. Acts 2011, 82nd Leg., R.S., Ch. 559 (H.B. 3004), Sec. 6, eff. June 17, 2011.