Surety Bonds and Other Forms of Financial Security
A sole proprietor, partnership, corporation, or other legal entity engaged in the fitting and dispensing of hearing instruments must file with TDLR one of the following acceptable forms of financial security in the amount of $10,000:
- a surety bond;
- a deposit of cash;
- a certificate of deposit (CD); or
- an original letter of credit.
An insurance policy is not an acceptable form of financial security to file with TDLR for this license under the current statute and rules.
The detailed requirements regarding the surety bond and the other acceptable forms of financial security are found in the statute at Occupations Code §402.404, Surety Bonding and in the rules at 16 TAC §112.60, Filing Surety Bond or Other Form of Financial Security.
The surety bond must be completed using TDLR’s Surety Bond Form or it must contain the required obligations and conditions included in TDLR’s Surety Bond Form.
The applicant’s employer (the entity engaged in the fitting and dispensing of hearing instruments) may submit a surety bond or other acceptable form of financial security to TDLR directly or may provide the applicant with a surety bond or other acceptable form of financial security to be submitted with the license application.
The surety bond and the other acceptable forms of financial security are conditioned on the promise to pay all:
- taxes and contributions owed to the state and political subdivisions of the state by the entity; and
-
judgments that the entity may be required to pay for:
- negligently or improperly dispensing hearing instruments; or
- breaching a contract relating to the dispensing of hearing instruments.
The surety bond and the other acceptable forms of financial security remain in effect until canceled by action of the surety, the principal, or TDLR. Notice of cancellation must be provided to TDLR no later than thirty days prior to cancellation.
The purchaser of a hearing instrument may rescind the purchase and recover funds for certain actions of the license holder or the entity engaged in the fitting and dispensing of hearing instruments as specified in Occupations Code §402.405, Recovery on Surety Bond.