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
2-1 of each odd-numbered year. A member of the board whose term has
2-2 expired shall continue to serve until the member's replacement is
2-3 appointed by the governor.
2-4 (m) The board shall hold meetings at least once each
2-5 calendar quarter [month] and at other times at the call of the
2-6 chairman and at times established by board rule. Special meetings
2-7 may be called by any two members of the board on two days notice.
2-8 SECTION 3. Section 7(c), Article 5.76-3, Insurance Code, is
2-9 amended to read as follows:
2-10 (c) If the premium is financed by the fund as provided by
2-11 Subsection (b) of this section, the payment deferred earns interest
2-12 payable to the fund at a rate annually determined by the board
2-13 [based on the auction rate quoted on a discount basis for 52-week
2-14 treasury bills issued by the United States government, as published
2-15 by the Federal Reserve Board on the date nearest to the date on
2-16 which the interest rate is determined].
2-17 SECTION 4. Section 13, Article 5.76-3, Insurance Code, is
2-18 amended to read as follows:
2-19 Sec. 13. FINANCIAL ADMINISTRATION. (a) Revenues of the
2-20 fund consist of:
2-21 (1) premiums paid by employers for workers'
2-22 compensation insurance from the fund;
2-23 (2) investments and money earned from investments of
2-24 the fund;
2-25 (3) money received from the issuance and sale of bonds
3-1 under Article 5.76-5 of this code; and
3-2 (4) any other money received by the fund.
3-3 (b) Administrative expenses of the fund shall be paid from
3-4 the fund at the direction of the board.
3-5 (c) Money in the fund shall be paid from the fund, without
3-6 legislative appropriation, on vouchers approved by the board. That
3-7 money shall be held exclusively for the purposes stated in this
3-8 article and may not be used or appropriated for any other purpose.
3-9 (d) Money in the fund shall be invested, subject to a policy
3-10 approved by the comptroller [state treasurer], in the types of
3-11 investments authorized by law for an insurer authorized to write
3-12 workers' compensation insurance coverage in this state.
3-13 (e) The fund shall establish and maintain reserves for
3-14 losses on an actuarially sound basis in accordance with Article
3-15 5.61 of this code.
3-16 (f) The fund must maintain a ratio of net written premiums
3-17 on policies written after reinsurance to surplus of not more than:
3-18 (1) [3.3 to one, for the period beginning on September
3-19 1, 1993 and extending through August 31, 1996;]
3-20 [(2) 3.2 to one, for the period beginning on September
3-21 1, 1996 and extending through August 31, 1997;]
3-22 [(3)] 3.1 to one, for the period beginning on
3-23 September 1, 1997 and extending through August 31, 1998; and
3-24 (2) [(4)] 3.0 to one on and after September 1, 1998.
3-25 (g) Not more than once in any calendar year, the board may
4-1 use up to 20 percent of any surplus that exceeds the ratio
4-2 specified in Subsection (f) of this section to assist in prepaying
4-3 or retiring before maturity the bonds issued pursuant to Article
4-4 5.76-5, Insurance Code.
4-5 (h) The fund may pay cash dividends or allow a credit on
4-6 renewal premium for each policyholder insured with the fund other
4-7 than a policyholder insured under Article 5.76-4 of this code. A
4-8 dividend or credit requires prior approval of the department [Texas
4-9 Department of Insurance].
4-10 (i) [(h)] The fund shall file annual statements with the
4-11 department [Texas Department of Insurance] and the commission in
4-12 the same manner as required of other workers' compensation
4-13 insurance carriers, and the commissioner [State Board of Insurance]
4-14 shall include a report on the fund's condition in the
4-15 commissioner's [that board's] annual report under Article 1.25 of
4-16 this code.
4-17 (j) [(i)] If the fund incurs a deficit for any reason, no
4-18 other insurer is liable for or subject to an assessment for that
4-19 deficit.
4-20 SECTION 5. This Act takes effect September 1, 1997.
4-21 SECTION 6. The importance of this legislation and the
4-22 crowded condition of the calendars in both houses create an
4-23 emergency and an imperative public necessity that the
4-24 constitutional rule requiring bills to be read on three several
4-25 days in each house be suspended, and this rule is hereby suspended,
5-1 and that this Act take effect and be in force from and after its
5-2 passage, and it is so enacted.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 3354 was passed by the House on April
29, 1997, by a non-record vote.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 3354 was passed by the Senate on May
14, 1997, by the following vote: Yeas 30, Nays 0.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor