SB 778 is a new bill that was enacted in the State of Texas regarding identity recovery services. The new bill sets financial stipulations for providers of identity recovery service contracts, requiring a compensation insurance policy and a funded reserve account, including financial security in the form of a surety bond, a cash deposit, securities, a letter of credit or another variety of satisfactory security. The financial security must be in a quantity that is no less than $25,000 or 5% of the gross consideration the provider received from consumers resulting from the sale of all identity recovery service contracts issued and outstanding in the State, less any claims paid whichever quantity is larger. In place of such financial instruments, the provider or its parent company have the option to sustain a net worth or stockholder’s equity of a minimum of $100 million.
Eric is the Webmaster of JW Surety Bonds. With years of experience in the surety industry, he is also a contributing author to the surety bond blog.