Enrolled Bill Summary

            House Bill 2095 creates a new chapter in the Labor Code relating to the provision of workers' compensation insurance coverage through a certified self-insurance group. The bill authorizes five or more private employers to establish a workers' compensation self-insurance group if the employers are engaged in the same or a similar type of business and are members of a trade or professional association that has been in existence for at least five years. The bill requires an association of employers seeking to self-insure to obtain a certificate of approval from the commissioner of insurance and sets forth the application requirements, including financial requirements, to obtain approval. It prohibits the commissioner from granting the request of any group to terminate its certificate of approval unless the group has insured or reinsured all incurred workers' compensation obligations with an authorized insurer. The bill requires each self-insurance group to be operated by a board of trustees and establishes the general powers and duties and prohibited activities of the board. It provides that a member who elects to terminate membership or whose membership is canceled by the group remains jointly and severally liable for the workers' compensation obligations of the group during the member's period of membership. The bill requires the group to submit certain independently audited financial statements, including an actuarial opinion of the adequacy of its loss reserves, to the commissioner, and it requires the commissioner periodically to examine the financial condition of each group. Each group is required to pay a self-insurance group maintenance tax for administration of the Texas Workers' Compensation Commission and the Research and Oversight Council on Workers' Compensation and for administrative costs incurred by the Texas Department of Insurance. The bill also requires each group to pay a premium tax on gross premiums for the group's retention to the comptroller. The bill establishes procedures for determining premium rates and specifies requirements relating to refunds, premium payments, reserves, and deficits, depending on the group's assets. The bill requires the establishment of the Texas Group Self-Insurance Guaranty Association by January 1, 2006, to provide for the payment of workers' compensation insurance benefits and expenses related to the injured employee of an insolvent group; the bill also provides for the appointment of a guaranty association advisory committee to make recommendations regarding establishment of that association. Finally, the bill authorizes the commissioner of insurance to levy fines of up to $1,000 per violation, with a maximum aggregate amount of $10,000; issue cease and desist orders to stop an act or practice found to be in violation; and revoke a certificate of approval if a group is found to be insolvent, fails to pay a tax, or fails to comply in a timely manner with the requirements of this act.