Title LA, Labor Code

Sec. 407A.005. CERTIFICATE OF APPROVAL REQUIRED. An association of employers may not act as a workers' compensation self-insurance group unless it has been issued a certificate of approval by the commissioner under this chapter. Added by Acts 2003, 78th Leg., ch. 275, Sec. 1, eff…

Sec. 407A.006. SERVICE OF PROCESS. (a) Each group shall be deemed to have appointed the commissioner as its attorney to receive service of legal process issued against the group in this state. (b) The appointment of the commissioner is irrevocable, binds any successor in interest…

Sec. 407A.007. HEARINGS. A hearing required under this chapter shall be conducted by the State Office of Administrative Hearings in the manner provided for a contested case under Chapter 2001, Government Code. Added by Acts 2003, 78th Leg., ch. 275, Sec. 1, eff. Sept. 1, 2003.

Sec. 407A.008. RULES. The commissioner shall adopt rules as necessary to implement this chapter. Added by Acts 2003, 78th Leg., ch. 275, Sec. 1, eff. Sept. 1, 2003.

Sec. 407A.009. CERTIFICATE OF AUTHORITY REQUIRED FOR CERTAIN ADMINISTRATORS AND SERVICE COMPANIES. (a) An administrator or service company under this chapter that performs the acts of an administrator as defined in Chapter 4151, Insurance Code, must hold a certificate of authorit…

Sec. 407A.051. APPLICATION FOR INITIAL CERTIFICATE OF APPROVAL; APPROVAL REQUIREMENTS. (a) An association of employers that proposes to organize as a workers' compensation self-insurance group shall file with the department an application for a certificate of approval. (b) The ap…

Sec. 407A.052. ISSUANCE OF CERTIFICATE OF APPROVAL; REFUSAL. (a) The commissioner shall issue a certificate of approval to a proposed group on finding that the group has met the requirements of this subchapter. (b) If the commissioner determines that a proposed group has not sati…

Sec. 407A.0521. NEW CERTIFICATES OF APPROVAL PROHIBITED. (a) Notwithstanding Section 407A.052, the commissioner may not issue a certificate of approval to a proposed group on or after September 1, 2025. (b) The commissioner may amend a certificate of approval issued to a group be…

Sec. 407A.053. FINANCIAL REQUIREMENTS. (a) To obtain a certificate of approval, each group shall comply with the financial requirements adopted under this section. (b) The combined net worth of all employers who are members of the group must be at least $2 million. A member of th…

Sec. 407A.054. EXCESS INSURANCE REQUIREMENTS. (a) To obtain an initial certificate of approval and to be eligible to renew its certificate of approval, each group must comply with the excess insurance requirements adopted under this section. (b) Each group shall obtain specific e…

Sec. 407A.055. PREMIUM REQUIREMENTS. Each group must have an estimated premium subject to experience modifier of at least $250,000 during the group's first year of operation. Thereafter, the annual standard premium must be at least $500,000. Added by Acts 2003, 78th Leg., ch. 275…

Sec. 407A.056. INDEMNITY AGREEMENT REQUIREMENTS. (a) An indemnity agreement filed under Section 407A.051 must jointly and severally bind the group and each employer who is a member of the group to meet the workers' compensation obligations of each member. (b) The indemnity agreem…

Sec. 407A.057. ADDITIONAL PERFORMANCE BOND REQUIREMENTS. (a) In addition to the requirements under Section 407A.051, the commissioner may require a service company providing claim services to furnish a performance bond of $250,000 in the form prescribed by the commissioner. (b) I…

Sec. 407A.101. CERTIFICATE OF APPROVAL; TERMINATION. (a) A certificate of approval remains in effect until terminated at the request of the group or revoked by the commissioner. (b) The commissioner may not grant the request of any group to terminate its certificate of approval u…

Sec. 407A.151. BOARD MEMBERSHIP. (a) Each group shall be operated by a board of trustees composed of at least five persons whom the members of the group elect for stated terms of office. The trustees must be employees, officers, or directors of employers who are members of the gr…

Sec. 407A.152. BOARD GENERAL POWERS AND DUTIES. The board of trustees shall: (1) maintain minutes of its meetings and make the minutes available to the commissioner; (2) designate an administrator and delineate in the written minutes of its meetings the areas of authority it dele…

Sec. 407A.153. PROHIBITED ACTIVITIES. The board of trustees may not: (1) extend credit to individual members for payment of a premium, except under payment plans approved by the commissioner; or (2) without first advising the commissioner of the nature and purpose of the loan and…

Sec. 407A.154. GROUP FUNDS. The board of trustees shall maintain responsibility for all money collected or disbursed from the group. Added by Acts 2003, 78th Leg., ch. 275, Sec. 1, eff. Sept. 1, 2003. SUBCHAPTER E. GROUP MEMBERSHIP; TERMINATION; LIABILITY

Sec. 407A.201. ADMISSION OF EMPLOYER AS MEMBER. (a) An employer who joins an approved workers' compensation self-insurance group shall: (1) submit an application for membership to the board of trustees or its administrator; and (2) enter into the indemnity agreement as required b…

Sec. 407A.251. FINANCIAL STATEMENT. (a) Each group shall submit to the commissioner financial statements audited by an independent certified public accountant on or before the last day of the sixth month following the end of the group's fiscal year. (b) The financial statement mu…

Sec. 407A.252. EXAMINATION. (a) The commissioner shall examine the financial condition of each group to determine the group's ability to meet the group's obligations under this subtitle. An examination under this section is subject to Article 1.15, Insurance Code, except that, to…

Sec. 407A.301. SURCHARGE FOR DIVISION AND RESEARCH FUNCTIONS OF DEPARTMENT. (a) Each group shall pay a self-insurance group surcharge under this section for: (1) the administration of the division of workers' compensation of the department; (2) the prosecution of workers' compens…

Sec. 407A.302. SURCHARGE FOR DEPARTMENT. (a) Subject to Subsection (b), each group shall pay the surcharge imposed under Chapter 255, Insurance Code, for the administrative costs incurred by the department in implementing this chapter. (b) The surcharge owed by a group under this…

Sec. 407A.303. COLLECTION AND PAYMENT OF SURCHARGES. (a) The group shall remit the surcharges for deposit in the Texas Department of Insurance operating account to the credit of the division. (b) A group commits an administrative violation if the group does not pay the surcharges…

Sec. 407A.304. PREMIUM TAX. (a) Each group shall pay to the comptroller a premium tax on gross premiums for the group's retention. The premium tax assessed under this subsection does not apply to premium collected for excess insurance. (b) The rate for the premium tax under this …

Sec. 407A.351. RATES. (a) Except as provided by Subsection (b), each group shall use the uniform classification system and experience rating plan of the department. (b) A group may file rates with the department, including any reasonable and supporting information required by the…

Sec. 407A.352. AUDITS. Each member of a group shall be audited annually by the administrator or by an auditor acceptable to the commissioner to verify proper classifications, experience rating, payroll, and rates. The group shall maintain a record of the audit as part of the grou…

Sec. 407A.353. REFUNDS. (a) The board of trustees may declare refundable any money for a fund year in excess of the amount necessary to fund all obligations. (b) The board of trustees shall give each member a written description of the group's refund plan at the time of applicati…

Sec. 407A.354. PREMIUM PAYMENT PLAN; RESERVES. (a) Until the assets of a group reach a level sufficient to cover the group's liabilities, each group shall establish to the satisfaction of the commissioner a premium payment plan. (b) As long as the assets of the group remain suffi…

Sec. 407A.355. DEFICITS; INSOLVENCIES. (a) For purposes of this section, "insolvent" means: (1) the inability of a group to pay the group's outstanding lawful obligations as they mature in the regular course of business; or (2) that the group's liabilities exceed the group's asse…

Sec. 407A.401. PROHIBITED SOLICITATION. In connection with the solicitation of membership in a group, a person may not make an untrue statement of a material fact, or omit to state a material fact necessary to make the statement made, in light of the circumstances under which it …

Sec. 407A.402. FINES. After notice and an opportunity for a hearing, the commissioner may impose a fine on any person or group found to be in violation of this chapter or a rule adopted under this chapter. A fine assessed under this section may not exceed $1,000 for each act or v…

Sec. 407A.403. CEASE AND DESIST ORDERS. (a) After notice and an opportunity for a hearing, the commissioner may issue an order requiring a person or group to cease and desist from engaging in an act or practice found to be in violation of this chapter or a rule adopted under this…

Sec. 407A.404. REVOCATION OF CERTIFICATE OF APPROVAL. (a) After notice and an opportunity for a hearing, the commissioner may revoke a group's certificate of approval if the group: (1) is found to be insolvent; (2) fails to pay a tax, assessment, or special fund contribution impo…

Sec. 407A.451. DEFINITIONS. In this subchapter: (1) "Board" means the board of directors of the guaranty fund. (2) "Guaranty fund" means the Texas self-insurance group guaranty fund. (3) "Trust fund" means the trust fund established under Section 407A.457. Added by Acts 2005, 79t…

Sec. 407A.452. GUARANTY FUND. (a) The Texas self-insurance group guaranty fund is a nonprofit association established to provide for the payment of workers' compensation insurance benefits for injured employees covered by a group declared insolvent under Section 407A.355. (b) Eac…

Sec. 407A.453. BOARD OF DIRECTORS. (a) The guaranty fund is managed by a board of directors. (b) The board is composed of the following voting members: (1) three members elected as provided by Subsection (c), each of whom represents a different group certified under this chapter;…

Sec. 407A.454. IMMUNITY. A board member or a member of the staff of the board is not liable in a civil action for an act performed in good faith in the execution of that person's powers or duties. Added by Acts 2005, 79th Leg., Ch. 1055 (H.B. 1353), Sec. 1, eff. September 1, 2005…

Sec. 407A.455. BOARD GENERAL POWERS AND DUTIES. (a) The board shall: (1) create and maintain a trust fund for payment of the workers' compensation liabilities of an insolvent group; (2) hire staff as necessary; (3) provide recommendations to the commissioner regarding rules or gu…

Sec. 407A.456. PLAN OF OPERATION. (a) The board shall adopt a plan of operation governing the board's activities and the operation of the guaranty fund and the trust fund. (b) The plan of operation adopted by the board is subject to approval by the commissioner. Added by Acts 200…

Sec. 407A.4561. REVISED PLAN OF OPERATION: WIND DOWN. (a) In this section, "qualified group" means a group that: (1) holds a current certificate of approval under this chapter; and (2) has not been determined by the commissioner to be insolvent under Section 407A.355. (b) The boa…

Sec. 407A.457. TRUST FUND; SCHEDULE. (a) Each group shall contribute an amount, based on the total amount of income benefit payments made in this state for the preceding reported calendar year, to create, over a period of 10 years beginning January 1, 2006, a trust fund of at lea…

Sec. 407A.458. EFFECT OF INSOLVENCY OF GROUP. (a) On determining that a group has become insolvent, the commissioner shall secure release of the surety bond or security deposit required under Section 407A.053 and shall promptly estimate: (1) the amount of additional funds needed …

Sec. 407A.459. COLLECTION OF ASSESSMENTS FROM GROUP MEMBERS; CONTINUATION OF JOINT AND SEVERAL LIABILITY. (a) Each member of an insolvent group shall pay the amount of its assessment under this chapter to the commissioner not later than the 30th day after the date on which the co…

Sec. 407A.460. PAYMENT OF BENEFITS THROUGH GUARANTY FUND. (a) If the commissioner determines that the payment of benefits and claims administration shall be made through the guaranty fund, the guaranty fund assumes the workers' compensation obligations on behalf of the insolvent …

Sec. 407A.461. POSSESSION OF SECURITY BY GUARANTY FUND. On the assumption of obligations on behalf of an insolvent group by the guaranty fund under the commissioner's determination, the guaranty fund is entitled to immediate possession of any assets of the insolvent group and any…