DEFAULT BY FUNERAL PROVIDER.

(a) This section applies to a permit holder that administers a prepaid funeral benefits contract for which:

(1) the permit holder is not the funeral provider; and

(2) there is an actual or anticipated failure or inability of the funeral provider to perform its obligations under the contract.

(a-1) A permit holder to which this section applies shall notify each purchaser of an outstanding prepaid funeral benefits contract of any closure of the funeral provider named in the contract not later than the 90th day after the date of its receipt of notice of the closure.

(b) A permit holder to which this section applies shall make a reasonable effort to find a substitute funeral provider willing to assume the contractual obligations of the defaulting funeral provider. A reasonable effort includes:

(1) identifying and contacting at least three funeral providers within the same community or geographic service area as the defaulting funeral provider;

(2) if at least three funeral providers do not exist within the same community or geographic service area, identifying and contacting at least three funeral providers within a 50-mile radius of the defaulting funeral provider; and

(3) for both Subdivisions (1) and (2), first contacting those funeral providers that the permit holder considers have services and facilities that are comparable to the defaulting funeral provider.

(c) A permit holder that is unable to locate a substitute funeral provider as required by Subsection (b) shall submit information to the advisory council describing or identifying:

(1) all prepaid funeral benefits contracts to which the defaulting funeral provider is a party;

(2) to the extent known, the circumstances underlying the default by the original funeral provider and any attempt by the permit holder to address the default with the defaulting funeral provider;

(3) any effort by the permit holder to find a substitute funeral provider, including:

(A) the location and identity of each contacted funeral provider;

(B) the terms offered to the funeral provider; and

(C) the terms of any counteroffer or other response made by the funeral provider; and

(4) other information known to the permit holder that the permit holder believes may be relevant or useful to the advisory council.

(d) The permit holder shall cooperate with the department and the advisory council in facilitating selection of a substitute funeral provider by complying with any reasonable request for:

(1) additional information;

(2) assistance in negotiating with a potential substitute funeral provider; or

(3) assistance in communicating with a purchaser of an affected prepaid funeral benefits contract.