Relating to the regulation of transportation protection agreements.
LowStandard timeline
Low Cost
Effective:2025-09-01
Enforcing Agencies
Texas Department of Banking • Texas Department of Insurance
01
Compliance Analysis
Key implementation requirements and action items for compliance with this legislation
Implementation Timeline
Effective Date: September 1, 2025
Compliance Deadline: September 1, 2025 (You must utilize new contract forms for any TPA sold on or after this date to claim the exemption).
Agency Rulemaking: No mandatory rulemaking is specified in the bill; however, the Texas Department of Banking may issue guidance regarding how to report these non-trusted agreements on your Annual Report. Expect advisory bulletins by August 2025.
Immediate Action Plan
1.Draft the Contract: Have counsel prepare a TPA template that strictly adheres to the Finance Code 154.002 definition.
2.Audit Vendor Contracts: Confirm your third-party transport provider’s service area and response times match your new TPA promises.
3.Update Sales Scripts: Instruct staff to present the TPA as a separate, non-regulated service agreement, distinct from the prepaid funeral contract.
4.Establish Verification Protocol: Create a standard operating procedure for measuring and documenting the "place of death" mileage to prove exemption eligibility in future audits.
Operational Changes Required
Contracts
New Standalone Agreement: You must draft a proprietary TPA contract. You cannot use the standard Texas Department of Banking Model Pre-Need Contract for this service, as that form triggers trusting requirements.
Mandatory Definitions: Your contract must explicitly define the service as transportation of a body to a licensed facility/crematory only when death occurs more than 75 miles from your location.
Vendor Alignment: If you use a third-party logistics provider (e.g., Inman, MASA), ensure your consumer-facing contract mirrors the terms and exclusions of your vendor agreement to avoid coverage gaps.
Hiring/Training
Sales Protocol: Sales counselors must be trained to unbundle this service. It can no longer be a line item within a guaranteed pre-need funeral contract; it must be executed as a separate agreement.
Geographic Verification: Intake staff must be trained to verify the distance of death (75+ miles) before authorizing service under a TPA.
Reporting & Record-Keeping
Segregated Files: Maintain TPA records separately from Chapter 154 regulated pre-need files. Commingling these records exposes non-regulated funds to Department of Banking audit scrutiny.
Accounting: Update your chart of accounts. Revenue from TPAs is not a "prepaid liability" requiring trusting; it is recognized revenue upon contract execution (subject to your specific accounting method for service contracts).
Fees & Costs
Cash Flow Impact: Positive. You retain 100% of the TPA sales proceeds immediately. You are no longer required to deposit 90% into a trust or purchase an insurance policy.
Liability Insurance: Review your professional liability/E&O policy. Since these are no longer "insurance products" backed by a state guaranty fund, your business assumes full contractual liability for performance.
Strategic Ambiguities & Considerations
The "75-Mile" Cliff: The statute is rigid. It does not address "good faith" errors where a death occurs at mile 70. If you fulfill a TPA for a death occurring within 75 miles, the Department of Banking may argue you acted as an unlicensed insurer or sold an untrusted prepaid benefit.
Marketing Materials: The law exempts the *agreement*, but does not explicitly exempt the *marketing* from Deceptive Trade Practices Act scrutiny. Avoid using insurance terminology (e.g., "premium," "policy," "coverage") in your brochures to prevent TDI intervention.
Grandfathering: The law does not retroactively convert existing pre-need transport line items into TPAs. Do not attempt to withdraw funds from existing trusts for contracts written prior to September 1, 2025.
Need Help Understanding Implementation?
Our government affairs experts can walk you through this bill's specific impact on your operations.
Information presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.
The author has informed the committee that state law regarding prepaid funeral services does not provide sufficient oversight regarding transportation protection agreements, which provide for the transportation of a body from the place of death to a licensed holding facility or to a licensed crematory. These agreements can be offered by a third-party vendor, which typically falls outside of a prepaid funeral service benefit or plan. H.B. 1094 seeks to address this issue by establishing that these agreements are not regulated under the Finance Code as a prepaid funeral benefit and do not constitute the business of insurance in Texas.
CRIMINAL JUSTICE IMPACT
It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
ANALYSIS
H.B. 1094 amends the Finance Code to specify that the terms "prepaid funeral benefits" and "funeral service" or "service" do not include a transportation protection agreement or a service provided under a transportation protection agreement, respectively, for purposes of statutory provisions relating to prepaid funeral services. The bill defines "transportation protection agreement" as an agreement that primarily provides for the coordination and arrangement of all professional services related to the preparation for purposes of transportation and subsequent transportation of a deceased human body.
H.B. 1094 amends the Insurance Code to establish that a transportation protection agreement sold by a seller does not constitute the business of insurance in Texas and is otherwise exempt from the requirements of the Insurance Code. The bill defines "seller" by reference to Finance Code provisions relating to prepaid funeral services.
HB1094 creates a statutory carve-out for "Transportation Protection Agreements" (TPAs), explicitly exempting them from Texas Department of Banking prepaid trusting requirements and Texas Department of Insurance regulation. Effective September 1, 2025, licensed pre-need sellers may market death-away-from-home transport coverage as a standalone commercial contract, allowing for immediate revenue recognition rather than mandatory trusting, provided the death occurs more than 75 miles from the funeral establishment. Implementation Timeline Effective Date: September 1, 2025 Compliance Deadline: September 1, 2025 (You must utilize new contract forms for any TPA sold on or after this date to claim the exemption).
Q
Who authored HB1094?
HB1094 was authored by Texas Representative Stan Lambert during the Regular Session.
Q
When was HB1094 signed into law?
HB1094 was signed into law by Governor Greg Abbott on June 20, 2025.
Q
Which agencies enforce HB1094?
HB1094 is enforced by Texas Department of Banking and Texas Department of Insurance.
Q
How urgent is compliance with HB1094?
The compliance urgency for HB1094 is rated as "low". Businesses and organizations should review the requirements and timeline to ensure timely compliance.
Q
What is the cost impact of HB1094?
The cost impact of HB1094 is estimated as "low". This may vary based on industry and implementation requirements.
Q
What topics does HB1094 address?
HB1094 addresses topics including business & commerce, business & commerce--general, occupational regulation, occupational regulation--other trades & professions and transportation.
Legislative data provided by LegiScanLast updated: November 25, 2025
Need Strategic Guidance on This Bill?
Need help with Government Relations, Lobbying, or compliance? JD Key Consulting has the expertise you're looking for.
