By Counts H.B. No. 2784
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the authority of the Texas Workers' Compensation
1-3 Insurance Facility to contract for servicing companies.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 4.08, Article 5.76-2, Insurance Code, is
1-6 amended to read as follows:
1-7 (a) The executive director shall prepare a solicitation for
1-8 proposals from members and other entities to act as servicing
1-9 companies. The solicitation must be approved by the board and
1-10 published in the Texas Register. The executive director shall
1-11 evaluate each proposal and may negotiate contracts with the
1-12 proposers. The governing committee shall award servicing contracts
1-13 to an appropriate number of proposers whose proposals conform to
1-14 the solicitation and whose final negotiated contractual terms, in
1-15 the judgment of the governing committee, are most advantageous to
1-16 the facility. In determining which contractual terms are most
1-17 advantageous to the facility, in addition to price, the governing
1-18 committee shall consider the required specifications and the
1-19 members' or entities' ability to provide the services described in
1-20 subsection (b) of this section. The facility also may consider
1-21 economies of scale to be achieved by limiting the number of
1-22 servicing companies and the following:
1-23 (1) the number and scope of any conditions attached to
2-1 the proposal;
2-2 (2) whether the proposer can perform the contract and
2-3 provide the required services promptly, or within the time
2-4 required, without delay or interference;
2-5 (3) the character, responsibility, integrity,
2-6 reputation, and experience of the proposer;
2-7 (4) the quality of performance of previous contracts
2-8 or services; and
2-9 (5) the sufficiency of the financial resources and
2-10 ability of the proposer to perform the contract or provide the
2-11 services.
2-12 The governing committee may reject any or all proposals from
2-13 proposers, and may solicit proposals, negotiate terms and award new
2-14 servicing company contracts in accordance with this section. Any
2-15 servicing company contracts awarded by the governing committee
2-16 shall be subject to approval by the board and are not effective
2-17 until such approval is granted. The proposal, negotiation and
2-18 contracting process is not subject to the State Purchasing and
2-19 General Services Act (Article 601b, Vernon's Texas Civil Statutes).
2-20 All contracts are public records for purposes of the Open Records
2-21 Act (Article 6252-17a, Vernon's Texas Civil Statutes). <The board
2-22 shall establish standards, qualifications, requirements, and all
2-23 other particulars regarding servicing companies necessary to
2-24 service the fund adequately. The board shall establish practices,
2-25 policies, and procedures for the selection of servicing companies
3-1 on a competitive basis. The board shall solicit proposals for an
3-2 appropriate number of servicing contracts, as determined by the
3-3 board, from members and other eligible entities to act as servicing
3-4 companies. Proposals shall be publicly opened by the board. The
3-5 board shall evaluate each proposal and award a servicing contract
3-6 to the appropriate number of member or entities whose proposals
3-7 conform with the solicitation and, in the judgment of the board,
3-8 are most advantageous to the fund; provided that the board gives
3-9 full consideration to economies of scale to be achieved by limiting
3-10 the number of servicing companies. The board shall consider the
3-11 fee bid by each member for entity, as well as other factors, in
3-12 making the contract awards. Each servicing company selected shall
3-13 receive the fee that it bid.>
3-14 (b) Any entity desiring to be a servicing company shall
3-15 submit a proposal to the facility <board> pursuant to the
3-16 solicitation process described by Subsection (a) of this section.
3-17 Among the other requirements specified by the facility <board>, the
3-18 proposal shall provide satisfactory evidence that such proposer
3-19 <applicant> possesses the demonstrated records of competence,
3-20 financial stability, and resource sufficient to assure the facility
3-21 <board> that it is able to provide all services required by the
3-22 facility <board>, including the following:
3-23 (1) investigating, reporting, and paying claims;
3-24 (2) complying with requirements of the Texas Workers'
3-25 Compensation Commission;
4-1 (3) conducting safety inspections and presenting loss
4-2 prevention programs or courses of instruction at the insured's
4-3 office or work locations;
4-4 (4) inspecting risks for classification purposes;
4-5 (5) promptly issuing policies, endorsements, and
4-6 certificates of insurance;
4-7 (6) making and preparing final payroll audits;
4-8 (7) preparing for litigation, litigating, and
4-9 conducting legal support required under the policy contract;
4-10 (8) preparation and timely submission of all
4-11 appropriate financial and statistical reports; and
4-12 (9) all other services required for servicing workers'
4-13 compensation policies in all particulars throughout this state.
4-14 (c) An entity that is not a member but that desires to be a
4-15 servicing company shall submit a proposal to the facility <board>
4-16 to be a servicing company pursuant to the solicitation process
4-17 described in <prescribed by> subsection <Subsections> (a) and (b)
4-18 of this section. An entity that is not an insurer is not required
4-19 to hold a license under this code to perform the functions of a
4-20 servicing company. If an unlicensed entity is selected by the
4-21 facility <board> to be a servicing company <carrier>, the facility
4-22 <board> may require a fidelity bond, surety bond, and/or other
4-23 financial security of such an entity. An entity appointed under
4-24 this subsection shall be subject to the provisions of Articles
4-25 21.21 and 21.21-2 of this code.
5-1 (d) <The performance of servicing companies shall be subject
5-2 to the continuing jurisdiction of the board.>
5-3 <(e) The board shall develop a fair and nondiscriminatory
5-4 plan for assignments to servicing companies.>
5-5 <(f)> The board shall promulgate and adopt rules governing the
5-6 solicitation and contracting process to be followed by the facility
5-7 <to implement this section. Such rules shall be distributed to
5-8 all member companies, and to other entities upon request>.
5-9 SECTION 2. This Act takes effect September 1, 1993.
5-10 SECTION 3. The importance of this legislation and the
5-11 crowded condition of the calendars in both houses create an
5-12 emergency and an imperative public necessity that the
5-13 constitutional rule requiring bills to be read on three several
5-14 days in each house be suspended, and this rule is hereby suspended.