1-1 By: Dukes, Brimer (Senate Sponsor - Armbrister) H.B. No. 3354
1-2 (In the Senate - Received from the House April 30, 1997;
1-3 May 1, 1997, read first time and referred to Committee on Economic
1-4 Development; May 12, 1997, reported favorably by the following
1-5 vote: Yeas 10, Nays 0; May 12, 1997, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to the operation of the Texas Workers' Compensation
1-9 Insurance Fund.
1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11 SECTION 1. Section 2(a), Article 5.76-3, Insurance Code, is
1-12 amended to read as follows:
1-13 (a) The Texas Workers' Compensation Insurance Fund is
1-14 created as a corporate body with the powers provided by this
1-15 subchapter [in this article] and with all general corporate powers
1-16 incident to its operation as a corporate body. The fund shall:
1-17 (1) serve as a competitive force in the marketplace;
1-18 (2) guarantee the availability of workers'
1-19 compensation insurance in this state; and
1-20 (3) serve as an insurer of last resort as provided
1-21 under Article 5.76-4 of this code.
1-22 SECTION 2. Sections 3(a) and (m), Article 5.76-3, Insurance
1-23 Code, are amended to read as follows:
1-24 (a) The fund is governed by a board of directors composed of
1-25 nine members, all of whom shall be citizens of this state. The
1-26 members shall be appointed by the governor with the advice and
1-27 consent of the senate, and vacancies shall be filled in the same
1-28 manner. The members of the board of directors serve staggered
1-29 six-year terms, with the terms of three members expiring February 1
1-30 of each odd-numbered year. A member of the board whose term has
1-31 expired shall continue to serve until the member's replacement is
1-32 appointed by the governor.
1-33 (m) The board shall hold meetings at least once each
1-34 calendar quarter [month] and at other times at the call of the
1-35 chairman and at times established by board rule. Special meetings
1-36 may be called by any two members of the board on two days notice.
1-37 SECTION 3. Section 7(c), Article 5.76-3, Insurance Code, is
1-38 amended to read as follows:
1-39 (c) If the premium is financed by the fund as provided by
1-40 Subsection (b) of this section, the payment deferred earns interest
1-41 payable to the fund at a rate annually determined by the board
1-42 [based on the auction rate quoted on a discount basis for 52-week
1-43 treasury bills issued by the United States government, as published
1-44 by the Federal Reserve Board on the date nearest to the date on
1-45 which the interest rate is determined].
1-46 SECTION 4. Section 13, Article 5.76-3, Insurance Code, is
1-47 amended to read as follows:
1-48 Sec. 13. FINANCIAL ADMINISTRATION. (a) Revenues of the
1-49 fund consist of:
1-50 (1) premiums paid by employers for workers'
1-51 compensation insurance from the fund;
1-52 (2) investments and money earned from investments of
1-53 the fund;
1-54 (3) money received from the issuance and sale of bonds
1-55 under Article 5.76-5 of this code; and
1-56 (4) any other money received by the fund.
1-57 (b) Administrative expenses of the fund shall be paid from
1-58 the fund at the direction of the board.
1-59 (c) Money in the fund shall be paid from the fund, without
1-60 legislative appropriation, on vouchers approved by the board. That
1-61 money shall be held exclusively for the purposes stated in this
1-62 article and may not be used or appropriated for any other purpose.
1-63 (d) Money in the fund shall be invested, subject to a policy
1-64 approved by the comptroller [state treasurer], in the types of
2-1 investments authorized by law for an insurer authorized to write
2-2 workers' compensation insurance coverage in this state.
2-3 (e) The fund shall establish and maintain reserves for
2-4 losses on an actuarially sound basis in accordance with Article
2-5 5.61 of this code.
2-6 (f) The fund must maintain a ratio of net written premiums
2-7 on policies written after reinsurance to surplus of not more than:
2-8 (1) [3.3 to one, for the period beginning on September
2-9 1, 1993 and extending through August 31, 1996;]
2-10 [(2) 3.2 to one, for the period beginning on September
2-11 1, 1996 and extending through August 31, 1997;]
2-12 [(3)] 3.1 to one, for the period beginning on
2-13 September 1, 1997 and extending through August 31, 1998; and
2-14 (2) [(4)] 3.0 to one on and after September 1, 1998.
2-15 (g) Not more than once in any calendar year, the board may
2-16 use up to 20 percent of any surplus that exceeds the ratio
2-17 specified in Subsection (f) of this section to assist in prepaying
2-18 or retiring before maturity the bonds issued pursuant to Article
2-19 5.76-5, Insurance Code.
2-20 (h) The fund may pay cash dividends or allow a credit on
2-21 renewal premium for each policyholder insured with the fund other
2-22 than a policyholder insured under Article 5.76-4 of this code. A
2-23 dividend or credit requires prior approval of the department [Texas
2-24 Department of Insurance].
2-25 (i) [(h)] The fund shall file annual statements with the
2-26 department [Texas Department of Insurance] and the commission in
2-27 the same manner as required of other workers' compensation
2-28 insurance carriers, and the commissioner [State Board of Insurance]
2-29 shall include a report on the fund's condition in the
2-30 commissioner's [that board's] annual report under Article 1.25 of
2-31 this code.
2-32 (j) [(i)] If the fund incurs a deficit for any reason, no
2-33 other insurer is liable for or subject to an assessment for that
2-34 deficit.
2-35 SECTION 5. This Act takes effect September 1, 1997.
2-36 SECTION 6. The importance of this legislation and the
2-37 crowded condition of the calendars in both houses create an
2-38 emergency and an imperative public necessity that the
2-39 constitutional rule requiring bills to be read on three several
2-40 days in each house be suspended, and this rule is hereby suspended,
2-41 and that this Act take effect and be in force from and after its
2-42 passage, and it is so enacted.
2-43 * * * * *