By Dukes, Brimer H.B. No. 3354
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the operation of the Texas Workers' Compensation
1-3 Insurance Fund.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 2(a), Article 5.76-3, Insurance Code, is
1-6 amended to read as follows:
1-7 (a) The Texas Workers' Compensation Insurance Fund is
1-8 created as a corporate body with the powers provided by this
1-9 subchapter [in this article] and with all general corporate powers
1-10 incident to its operation as a corporate body. The fund shall:
1-11 (1) serve as a competitive force in the marketplace;
1-12 (2) guarantee the availability of workers'
1-13 compensation insurance in this state; and
1-14 (3) serve as an insurer of last resort as provided
1-15 under Article 5.76-4 of this code.
1-16 SECTION 2. Sections 3(a) and (m), Article 5.76-3, Insurance
1-17 Code, are amended to read as follows:
1-18 (a) The fund is governed by a board of directors composed of
1-19 nine members, all of whom shall be citizens of this state. The
1-20 members shall be appointed by the governor with the advice and
1-21 consent of the senate, and vacancies shall be filled in the same
1-22 manner. The members of the board of directors serve staggered
1-23 six-year terms, with the terms of three members expiring February 1
1-24 of each odd-numbered year. A member of the board whose term has
2-1 expired shall continue to serve until the member's replacement is
2-2 appointed by the governor.
2-3 (m) The board shall hold meetings at least once each
2-4 calendar quarter [month] and at other times at the call of the
2-5 chairman and at times established by board rule. Special meetings
2-6 may be called by any two members of the board on two days notice.
2-7 SECTION 3. Section 7(c), Article 5.76-3, Insurance Code, is
2-8 amended to read as follows:
2-9 (c) If the premium is financed by the fund as provided by
2-10 Subsection (b) of this section, the payment deferred earns interest
2-11 payable to the fund at a rate annually determined by the board
2-12 [based on the auction rate quoted on a discount basis for 52-week
2-13 treasury bills issued by the United States government, as published
2-14 by the Federal Reserve Board on the date nearest to the date on
2-15 which the interest rate is determined].
2-16 SECTION 4. Section 13, Article 5.76-3, Insurance Code, is
2-17 amended to read as follows:
2-18 Sec. 13. FINANCIAL ADMINISTRATION. (a) Revenues of the
2-19 fund consist of:
2-20 (1) premiums paid by employers for workers'
2-21 compensation insurance from the fund;
2-22 (2) investments and money earned from investments of
2-23 the fund;
2-24 (3) money received from the issuance and sale of bonds
2-25 under Article 5.76-5 of this code; and
2-26 (4) any other money received by the fund.
2-27 (b) Administrative expenses of the fund shall be paid from
3-1 the fund at the direction of the board.
3-2 (c) Money in the fund shall be paid from the fund, without
3-3 legislative appropriation, on vouchers approved by the board. That
3-4 money shall be held exclusively for the purposes stated in this
3-5 article and may not be used or appropriated for any other purpose.
3-6 (d) Money in the fund shall be invested, subject to a policy
3-7 approved by the comptroller [state treasurer], in the types of
3-8 investments authorized by law for an insurer authorized to write
3-9 workers' compensation insurance coverage in this state.
3-10 (e) The fund shall establish and maintain reserves for
3-11 losses on an actuarially sound basis in accordance with Article
3-12 5.61 of this code.
3-13 (f) The fund must maintain a ratio of net written premiums
3-14 on policies written after reinsurance to surplus of not more than:
3-15 (1) [3.3 to one, for the period beginning on September
3-16 1, 1993 and extending through August 31, 1996;]
3-17 [(2) 3.2 to one, for the period beginning on September
3-18 1, 1996 and extending through August 31, 1997;]
3-19 [(3)] 3.1 to one, for the period beginning on
3-20 September 1, 1997 and extending through August 31, 1998; and
3-21 (2) [(4)] 3.0 to one on and after September 1, 1998.
3-22 (g) Not more than once in any calendar year, the board may
3-23 use up to 20 percent of any surplus that exceeds the ratio
3-24 specified in Subsection (f) of this section to assist in prepaying
3-25 or retiring before maturity the bonds issued pursuant to Article
3-26 5.76-5, Insurance Code.
3-27 (h) The fund may pay cash dividends or allow a credit on
4-1 renewal premium for each policyholder insured with the fund other
4-2 than a policyholder insured under Article 5.76-4 of this code. A
4-3 dividend or credit requires prior approval of the department [Texas
4-4 Department of Insurance].
4-5 (i) [(h)] The fund shall file annual statements with the
4-6 department [Texas Department of Insurance] and the commission in
4-7 the same manner as required of other workers' compensation
4-8 insurance carriers, and the commissioner [State Board of Insurance]
4-9 shall include a report on the fund's condition in the
4-10 commissioner's [that board's] annual report under Article 1.25 of
4-11 this code.
4-12 (j) [(i)] If the fund incurs a deficit for any reason, no
4-13 other insurer is liable for or subject to an assessment for that
4-14 deficit.
4-15 SECTION 5. This Act takes effect September 1, 1997.
4-16 SECTION 6. The importance of this legislation and the
4-17 crowded condition of the calendars in both houses create an
4-18 emergency and an imperative public necessity that the
4-19 constitutional rule requiring bills to be read on three several
4-20 days in each house be suspended, and this rule is hereby suspended,
4-21 and that this Act take effect and be in force from and after its
4-22 passage, and it is so enacted.