SRC-HRD H.B. 3354 75(R) BILL ANALYSIS
Senate Research Center H.B. 3354
By: Dukes (Armbrister)
Economic Development
5-7-97
Engrossed
DIGEST
In the past, the Texas Workers' Compensation Insurance Fund's (fund) board
of directors has experienced problems conducting routine business when
board members' terms expired and no successor was appointed for a period
of time. H.B. 3354 would enable the board of directors to continue
conducting the business of the fund in the event that delays arise in the
appointment or reappointment of board members. H.B. 3354 also addresses
the fund's recommendation that its board be required to meet quarterly,
rather than monthly, now that fund operations have stabilized.
The fund is currently restricted in the amount of interest that it may
charge employers electing not to prepay workers' compensation premiums and
has requested the ability to charge more competitive rates. H.B. 3354
would enable the fund to more effectively compete in this area.
PURPOSE
As proposed, H.B. 3354 makes the following changes and clarifications with
regard to the powers and duties of the fund and its board of directors:
1) adds language to the fund's statute clarifying the legislative
purposes for the Texas Workers' Compensation Insurance Fund's (fund)
existence;
2) enables the board of directors of the fund (board) to conduct routine
business when delays arise in the appointment or reappointment of board
members;
3) allows the board to meet quarterly rather than monthly;
4) allows the fund to charge higher, more competitive rates of interest
to employers choosing not to prepay their workers' compensation insurance
premiums;
5) authorizes the fund to use 20 percent of its surplus each year for the
purpose of retiring the bonds used to start-up the fund.
RULEMAKING AUTHORITY
This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Section 2(a), Article 5.76-3, Insurance Code, to provide
that the Texas Workers' Compensation Insurance Fund (fund) is created as a
corporate body with the powers provided by this subchapter, rather than in
this article, and with all general corporate powers incident to its
operation as a corporate body. Requires the fund to serve as a
competitive force in the marketplace; guarantee the availability of
workers' compensation insurance in this state; and serve as an insurer of
last resort as provided under Article 5.76-4 of this code.
SECTION 2. Amends Sections 3(a) and (m), Article 5.76-3, Insurance Code,
to require a member of the board of directors of the fund (board) whose
term has not expired to continue to serve until the member's replacement
is appointed by the governor. Requires the board to hold meetings at
least once each calendar quarter, rather than once each month.
SECTION 3. Amends Section 7(c), Article 5.76-3, Insurance Code, to delete
text regarding a certain auction rate.
SECTION 4. Amends Section 13, Article 5.76-3, Insurance Code, to require
money in the fund to be invested, subject to a policy by the comptroller,
rather than the state treasurer, in certain investments. Deletes existing
Subdivisions (f)(1) and (f)(2). Authorizes the board, not more than once
in any calendar year, to use up to 20 percent of any surplus that exceeds
the ratio specified in Subsection (f) of this section to assist in
prepaying or retiring before maturity the bonds issued pursuant to Article
5.76-5, Insurance Code. Authorizes the fund to pay cash dividends or
allow a credit on renewal premium for each policyholder insured with the
fund other than a policyholder insured under Article 5.76-4 of this code.
Provides that a dividends or credit requires prior approval of the
department, rather than the Texas Department of Insurance. Requires the
fund to file annual statements with the Department of Insurance and the
Texas Workers' Compensation Commission in the same manner as required of
other workers' compensation insurance carriers, and requires the
commissioner, rather than the State Board of Insurance, to include a
report on the fund's condition in the commissioner's annual report under
Article 1.25 of this code. Makes conforming changes.
SECTION 5. Effective date: September 1, 1997.
SECTION 6. Emergency clause.
Effective date: upon passage.