Amend CSHB 976 by striking all below the enacting clause and
substituting the following:
SECTION 1. Article 21.28-C, Insurance Code, is amended by
adding Section 26 to read as follows:
Sec. 26. TRANSFER OF FACILITY TO ASSOCIATION. (a) The
purpose of this section is to:
(1) provide a means for the transfer of control of the
assets, liabilities, and obligations of the Texas workers'
compensation insurance facility to the Texas Property and Casualty
Insurance Guaranty Association; and
(2) ensure that the association has full authority to
enforce the rights of the facility without limitation, except as
expressly provided by this section.
(b) In addition to the definitions under Section 5 of this
Act, in this section:
(1) "Comptroller" means the Texas comptroller of
public accounts.
(2) "Facility" means the Texas workers' compensation
insurance facility.
(3) "Fund" means the Texas Workers' Compensation
Insurance Fund.
(4) "Insurer" means an insurance company licensed to
do business in this state.
(5) "Texas workers' compensation insurance facility
account" means the account maintained by the association for the
assets of the facility.
(c) The association shall take control of the facility's
assets, liabilities, and obligations and may administer all of the
remaining aspects of the facility's operation. The association has
full authority to enforce the contract or statutory rights of the
facility under any servicing company agreements. This section may
not be construed to be an assignment of the facility's rights or
obligations under those agreements.
(d) The association shall maintain the Texas workers'
compensation insurance facility account separately from the
association's accounts described by Section 6 of this Act. Each
claim, expense, or other liability related to the assets,
liabilities, and obligations of the facility shall be paid from,
and all collections and receipts shall be deposited into, the Texas
workers' compensation insurance facility account. Funds in the
Texas workers' compensation insurance facility account shall be
maintained outside the state treasury.
(e) Not later than June 1 of each year, the association
shall report its operating results for the Texas workers'
compensation insurance facility account to the commissioner on a
calendar year premium and an accident year loss basis.
(f) For a claim in which the compensable injury occurred
before January 1, 1992, the association shall compute at least
annually its results for incurred losses in the Texas workers'
compensation insurance facility account, including incurred but not
reported losses, by accident year. If there is a deficit or
surplus from the operation of the Texas workers' compensation
insurance facility account for those claims, the amount of the
deficit or surplus shall be assessed or rebated to the member
insurers licensed in this state who were members of the facility
during the calendar year. Each member insurer shall pay a
proportionate share of the total assessment or receive a
proportionate share of the total rebate based on that insurer's
portion of the total voluntary workers' compensation insurance
writings during the calendar year. The fund is not liable for any
deficit incurred on a policy with an effective date before January
1, 1992.
(g) For claims with an accident date on or after January 1,
1992, the association shall compute at least annually its results
for incurred losses in the Texas workers' compensation insurance
facility account, including incurred but not reported losses, by
accident year. If there is a deficit or surplus from operation of
the Texas workers' compensation insurance facility account for
those claims, the amount of the deficit or surplus shall be
assessed or rebated to the member insurers licensed in this state
who were members of the facility during the calendar year and to
the fund. Each member insurer and the fund shall pay a
proportionate share of the total assessment or receive a
proportionate share of the total rebate based on its portion of the
total voluntary workers' compensation insurance writings during the
calendar year.
(h) The association may provide for the redistribution of
all or part of an assessment that would otherwise be levied on a
member insurer under Subsection (f) or (g) of this section if the
member insurer is unable to pay the full assessment because the
member insurer is in liquidation at the time of the assessment.
(i) The association may authorize the deferment of the
payment of an assessment made under Subsection (f) or (g) of this
section. A deferment may be allowed only if the cash flow of the
Texas workers' compensation insurance facility account is adequate
to meet all needs.
(j) If a member insurer or the fund elects to defer any
portion of an assessment as provided by this section, the entire
unpaid portion of the assessment and any accrued interest must be
shown as a liability on each financial and annual statement of that
insurer.
(k) A member insurer may not be allowed a credit against any
tax levied by this state as a result of an assessment paid under
this section.
(l) The association may invest Texas workers' compensation
insurance facility account funds only in investments authorized for
the investment of state funds as provided by Chapter 404,
Government Code. The association shall develop an investment
policy for the Texas workers' compensation insurance facility
account and shall submit that policy to the comptroller for review
and approval.
(m) The association shall submit to the commissioner for
approval a plan of operation to ensure the fair, reasonable, and
equitable administration of the Texas workers' compensation
insurance facility account not later than October 1, 1997. The
commissioner shall approve or disapprove the association's plan of
operation of the Texas workers' compensation insurance facility
account not later than the 60th day after the date on which the
association submits the plan to the commissioner.
(n) If the commissioner does not approve the plan of
operation, the association shall submit to the commissioner an
amended plan of operation with any amendments necessary or suitable
to ensure the fair, reasonable, and equitable administration of the
Texas workers' compensation insurance facility account. The plan
of operation and any amendments take effect on approval in writing
by the commissioner. If the association fails to submit suitable
amendments to the plan, the commissioner, after notice and hearing,
shall adopt reasonable rules as necessary or advisable to implement
this section. Those rules shall continue in force until modified
by the commissioner or superseded by a plan submitted by the
association and approved by the commissioner.
(o) In addition to all immunities and protections otherwise
provided by this article, the association succeeds to all rights,
defenses, immunities, and liabilities of the facility in each cause
of action or other proceeding pending by or against the facility on
September 1, 1997, or filed after that date. The immunity
provisions of Sections 2.05(h) and 2.12, Article 5.76-2 of this
code, as those provisions existed before their repeal, continue to
apply to each act or omission that occurs before, on, or after
September 1, 1997, and that is performed by the persons or entities
covered by those provisions.
(p) If any party institutes or continues an action against
the facility, the governing committee of the facility, the
executive director of the facility, a member insurer solely in that
insurer's capacity as a member insurer, or an agent, servant,
attorney, consultant, or employee of the facility, whether or not
serving in that capacity on September 1, 1997, in connection with
or arising from either the facility's operations or the
transactions contemplated by this section, the association shall
defend, indemnify, and hold harmless that person or entity from
liability for any act or omission of that person or entity in
connection with, or arising from the performance of, the person's
or entity's powers and duties on behalf of the facility. A cause
of action or other proceeding described by this subsection shall
continue to be governed by and conducted under this section and
Article 5.76-2 of this code, as that article existed before its
repeal, and the applicable bylaws, rules, and regulations of the
facility, and those provisions are continued in effect for the
purposes of this section.
(q) The association may enter into negotiations for the
privatization to a single insurer of all the assets, liabilities,
and obligations maintained in the Texas workers' compensation
insurance facility account. If the association determines that
privatization under this subsection is in the best interest of this
state, the association shall obtain the written approval of the
commissioner before entering into a privatization agreement to
consummate the applicable transaction.
(r) Any net proceeds from the privatization of the Texas
workers' compensation insurance facility account shall be rebated
in accordance with Subsection (g) of this section.
(s) If an insurer that assumes the assets, liabilities, and
obligations maintained in the Texas workers' compensation insurance
facility account under a privatization agreement approved under
Subsection (q) of this section becomes an impaired insurer after
that privatization agreement takes effect, any remaining facility
claims shall be covered claims under this article.
(t) If a conflict exists between this section and any other
statute relating to the facility or the association, this section
controls.
SECTION 2. Except as otherwise provided by this Act, the
following laws are repealed on the effective date of this Act:
(1) Article 5.76-2, Insurance Code; and
(2) Section 18.24(b), Chapter 12, Acts of the 72nd
Legislature, 2nd Called Session, 1991, as amended by Section 8,
Chapter 885, Acts of the 73rd Legislature, Regular Session, 1993.
SECTION 3. If any provision of this Act or the application
of this Act to any person or entity or circumstance is held invalid
by a court of competent jurisdiction, that invalidity does not
affect other provisions or applications of this Act that can be
given effect without the invalid provision or application, and to
this end the provisions of this Act are declared to be severable.
SECTION 4. The repeal of Article 5.76-2, Insurance Code,
under Section 2 of this Act does not affect rights and liabilities
accruing under that article before the effective date of this Act,
and that article is continued in effect for that purpose and for
the purposes expressly provided by Section 26, Article 21.28-C,
Insurance Code, as added by this Act.
SECTION 5. The importance of this legislation and the
crowded condition of the calendars in both houses create an
emergency and an imperative public necessity that the
constitutional rule requiring bills to be read on three several
days in each house be suspended, and this rule is hereby suspended,
and that this Act take effect and be in force from and after its
passage, and it is so enacted. Start typing here.