Service Contract Providers

NEW - Change your contact information online!

Here are the public comments on general topics received during the 2012 Strategic Planning process. The comments are grouped as answers to the four questions we based our discussions on.

1. What are we doing well?
2. What can we do better?
3. If you could change one service that we provide or eliminate or amend any provision of TDLR’s statutes or rules, what would it be?
4. What major changes will occur over the next five years that will impact the way you do business and the services we provide?

Read the comments (13 kb PDF) To see the comments for each individual license program, go to that program's section on the web site.

A Service Contract Provider provides extended warranties to consumers for a specified period of time and for an additional cost beyond the price of the product.

New Financial Security requirements for SCPs passed by Texas Legislature, SB-1169, effective 9/1/2011. NEW service contract provider (SCP) applicants must provide financial security using one of the following three options:

• Reimbursement insurance policy with Texas endorsement form
• $100 million net worth of SCP applicant or its parent company
• Funded reserve account, security deposit and audited financial reports
• Funded Reserve Account – Maintain an amount of at least 40% of gross consideration the provider received from the sale of all service contracts issued and outstanding in Texas minus any claims paid
• Security Deposit – Maintain a minimum amount of $250,000. There are 3 acceptable forms for the security deposit:  Letter of Credit (LOC), Certificate of Deposit (CD), and cash deposit with TDLR. No surety bonds or securities accepted.
• Audited Financial Reports – Submit a copy of provider’s financial statements that must be prepared in accordance with generally accepted accounting principles, be without qualification as to the going concern status of the provider, and be audited by an independent certified public account.

Renewal of Existing Service Contract Provider’s registration:

• SCP‘s using reimbursement insurance or the SCPs or parent companies having a net worth of at least a $100 million as their method of financial security may renew without changes.
• By September 1, 2012, SCP’s using the current Funded Reserve method of financial security will “transition” to the new financial security requirements.
• More information regarding renewals will be coming soon.

TDLR is now accepting online payment for administrative penalties.

For more information about the Service Contract Providers program, e-mail TDLR at CS.Service.Contract.Providers@tdlr.texas.gov.