By Ellis S.B. No. 334
74R4133 MWV-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the authority of the Texas Workers' Compensation
1-3 Insurance Fund to provide general liability and commercial property
1-4 insurance coverage.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 1, Article 5.76-3, Insurance Code, is
1-7 amended by adding Subdivisions (5) and (6) to read as follows:
1-8 (5) "Small premium general liability insurance policy"
1-9 means a general liability insurance policy issued under the
1-10 authority of the Texas Workers' Compensation Insurance Fund to a
1-11 business in this state for which the annual premium is less than
1-12 $5,000.
1-13 (6) "Small premium commercial property insurance
1-14 policy" means a commercial property insurance policy issued under
1-15 the authority of the Texas Workers' Compensation Insurance Fund to
1-16 a business in this state for which the annual premium is less than
1-17 $5,000.
1-18 SECTION 2. Section 4, Article 5.76-3, Insurance Code, is
1-19 amended to read as follows:
1-20 Sec. 4. Authority and purpose. (a) According to this
1-21 article and the plan of operation, the board shall, on behalf of
1-22 the fund:
1-23 (1) provide for the acceptance of applications and
1-24 delivery or issuance for delivery in this state of workers'
2-1 compensation insurance and for the transaction of workers'
2-2 compensation insurance business to the same extent as any other
2-3 insurance carrier transacting workers' compensation insurance
2-4 business in this state;
2-5 (2) provide for the acceptance of applications and
2-6 delivery or issuance for delivery in this state of small premium
2-7 general liability and small premium commercial property insurance
2-8 and for the transaction of small premium general liability and
2-9 small premium commercial property insurance to the same extent as
2-10 any other insurance carrier transacting general liability and
2-11 commercial property insurance in this state;
2-12 (3) <(2)> enter into and approve contracts;
2-13 (4) <(3)> propose rates for workers' compensation
2-14 insurance issued by the fund;
2-15 (5) <(4)> appoint and supervise the activities of the
2-16 president of the fund and other officers and employees;
2-17 (6) <(5)> adopt necessary bylaws and rules for the
2-18 operation of the fund;
2-19 (7) <(6)> delegate specific responsibilities to the
2-20 president of the fund;
2-21 (8) <(7)> develop a general plan of operation, in
2-22 accordance with Section 5 of this article, to assure the orderly
2-23 management and operation of the fund; and
2-24 (9) <(8)> exercise any other authority necessary to
2-25 conduct a workers' compensation insurance business for the fund.
2-26 (b) The fund may not have affiliates, interlocking boards of
2-27 directors, spinoffs, or subsidiaries that write lines of insurance
3-1 other than workers' compensation, general liability, or commercial
3-2 property insurance.
3-3 SECTION 3. Sections 6(d) and (e), Article 5.76-3, Insurance
3-4 Code, are amended to read as follows:
3-5 (d) In addition to any other duties provided by this article
3-6 or by the board, the president shall:
3-7 (1) hire employees as necessary to conduct the
3-8 business and carry out the provisions of this article or to perform
3-9 the duties imposed on the president by this article;
3-10 (2) receive and approve applications for workers'
3-11 compensation and small premium general liability and small premium
3-12 commercial property policies of insurance and issue policies to
3-13 applicants who are eligible for workers' compensation and small
3-14 premium general liability and small premium commercial property
3-15 policies of insurance provided by the fund;
3-16 (3) negotiate contracts on behalf of the fund;
3-17 (4) issue renewals of workers' compensation and small
3-18 premium general liability and small premium commercial property
3-19 policies of insurance for those who qualify for renewal;
3-20 (5) process and pay valid claims according to the
3-21 rules of the board and the appropriate workers' compensation and
3-22 general liability and commercial property insurance laws;
3-23 (6) collect premiums for workers' compensation and
3-24 small premium general liability and small premium commercial
3-25 property policies of insurance issued or renewed by the fund; and
3-26 (7) collect and compile statistical information
3-27 relating to the fund and provide this information to the board.
4-1 (e) In addition to any other authority provided by this
4-2 article or by the board, the president shall have full power and
4-3 authority, in the name of the fund, to:
4-4 (1) sue and be sued in all of the courts of the state
4-5 in all actions arising out of any act, deed, matter, or things
4-6 made, omitted, entered into, done, or suffered in connection with
4-7 the fund and its administration, management, or conduct of its
4-8 business and affairs;
4-9 (2) delegate to any officer of the fund, subject to
4-10 any conditions prescribed by the president, any of the powers,
4-11 functions, or duties conferred or imposed on the president under
4-12 this article in connection with the fund, its administration,
4-13 management, and conduct of business or related affairs; an officer
4-14 to whom such a delegation is made may exercise the delegated powers
4-15 with the same force and effect as the president, subject to
4-16 approval by the president;
4-17 (3) inspect and audit employers who apply to the fund
4-18 for issuance of workers' compensation and small premium general
4-19 liability and small premium commercial property policies of
4-20 insurance or who seek renewal of that insurance;
4-21 (4) purchase reinsurance from insurance carriers
4-22 admitted or accredited to reinsure risks in this state;
4-23 (5) cancel or refuse to renew workers' compensation
4-24 and small premium general liability and small premium commercial
4-25 property policies of insurance if a risk does not comply with a
4-26 board-approved plan or any provision of this article;
4-27 (6) with the approval of the board, enter into
5-1 contracts on behalf of the fund;
5-2 (7) draft guidelines for approval of the board
5-3 relating to the settlement of claims against the fund; and
5-4 (8) perform any other acts authorized by the board to
5-5 carry out this article and the rules of the board.
5-6 SECTION 4. Section 7(b), Article 5.76-3, Insurance Code, is
5-7 amended to read as follows:
5-8 (b) The fund shall adopt such rules as required to provide
5-9 for the financing of all or part of the premiums by the fund or a
5-10 person licensed under Chapter 24 of this code. Those rules shall
5-11 require that the fund receive a minimum initial premium sufficient
5-12 to cover the administrative costs of issuing and booking the policy
5-13 in the event of cancellation. Those rules shall not unfairly
5-14 discriminate against applicants based upon the amount of premium to
5-15 be paid by the applicant for workers' compensation, general
5-16 liability, or commercial property coverage. Notwithstanding the
5-17 foregoing, the premium financing rules adopted by the fund may
5-18 provide that premium financing shall not be offered to any
5-19 applicant who appears to present an unacceptable credit risk.
5-20 SECTION 5. Section 9(a), Article 5.76-3, Insurance Code, is
5-21 amended to read as follows:
5-22 (a) Except as otherwise provided by this subsection, the
5-23 board shall have full power and authority to propose rates to be
5-24 charged by the fund for insurance. The board shall engage the
5-25 services of an independent actuary who is a member in good standing
5-26 with the Casualty Actuarial Society or the American Academy of
5-27 Actuaries to develop and recommend actuarially sound rates. The
6-1 fund is subject to the requirements of Articles <Article> 5.55 and
6-2 5.13-2 of this code, as applicable, and shall include the
6-3 recommendations of its independent actuary as part of its filing
6-4 under those articles <that article>.
6-5 SECTION 6. Section 12(c), Article 5.76-3, Insurance Code, is
6-6 amended to read as follows:
6-7 (c) The fund shall pay all other taxes and fees or any
6-8 payments due in lieu of taxes in the same manner as an insurance
6-9 carrier authorized and admitted by the Texas Department of
6-10 Insurance to do insurance business in this state under a
6-11 certificate of authority that includes authorization to write
6-12 workers' compensation, general liability, and commercial property
6-13 insurance.
6-14 SECTION 7. Sections 13(a) and (d), Article 5.76-3, Insurance
6-15 Code, are amended to read as follows:
6-16 (a) Revenues of the fund consist of:
6-17 (1) premiums paid by employers for workers'
6-18 compensation, general liability, and commercial property insurance
6-19 from the fund;
6-20 (2) investments and money earned from investments of
6-21 the fund;
6-22 (3) money received from the issuance and sale of bonds
6-23 under Article 5.76-5 of this code; and
6-24 (4) any other money received by the fund.
6-25 (d) Money in the fund shall be invested, subject to a policy
6-26 approved by the state treasurer, in the types of investments
6-27 authorized by law for an insurer authorized to write workers'
7-1 compensation, general liability, and commercial property insurance
7-2 coverage in this state.
7-3 SECTION 8. Section 17(b), Article 5.76-3, Insurance Code, is
7-4 amended to read as follows:
7-5 (b) The fund shall file with the State Board of Insurance
7-6 and the commission all reports required of other workers'
7-7 compensation, general liability, and commercial property insurers.
7-8 SECTION 9. Section 21, Article 5.76-3, Insurance Code, is
7-9 amended by adding Subsection (d) to read as follows:
7-10 (d) The fund may not insure a person eligible for insurance
7-11 under Article 21.49 of this code.
7-12 SECTION 10. Not later than December 31, 1995, the board of
7-13 directors of the Texas Workers' Compensation Insurance Fund shall
7-14 adopt an amended plan of operation of the Texas Workers'
7-15 Compensation Insurance Fund to provide for the amendments made by
7-16 this Act and shall have submitted the plan to the commissioner of
7-17 insurance for approval.
7-18 SECTION 11. This Act takes effect September 1, 1995, and
7-19 applies only to an insurance policy delivered, issued for delivery,
7-20 or renewed on or after March 1, 1996. A policy delivered, issued
7-21 for delivery, or renewed before March 1, 1996, is governed by the
7-22 law as it existed immediately before the effective date of this
7-23 Act, and that law is continued in effect for that purpose.
7-24 SECTION 12. The importance of this legislation and the
7-25 crowded condition of the calendars in both houses create an
7-26 emergency and an imperative public necessity that the
7-27 constitutional rule requiring bills to be read on three several
8-1 days in each house be suspended, and this rule is hereby suspended.