By Brimer H.B. No. 1203
77R434 PB-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the purchase of certain insurance coverage by state
1-3 agencies.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 412.001(4), Labor Code, is amended to read
1-6 as follows:
1-7 (4) "State agency" means:
1-8 (A) a board, commission, department, office, or
1-9 other agency in the executive, judicial, or legislative branch of
1-10 state government that has five or more employees, was created by
1-11 the constitution or a statute of this state, and has authority not
1-12 limited to a specific geographical portion of the state; and
1-13 (B) an institution of higher education as
1-14 defined by Section 61.003, Education Code.
1-15 SECTION 2. Section 412.011, Labor Code, is amended to read as
1-16 follows:
1-17 Sec. 412.011. POWERS AND DUTIES OF OFFICE. (a) The State
1-18 Office of Risk Management shall [is created to] administer
1-19 insurance services obtained by state agencies, including the
1-20 government employees workers' compensation insurance program and
1-21 the state risk management programs.
1-22 (b) The office shall:
1-23 (1) operate as a full-service insurance and risk
1-24 manager for state agencies as provided by Subsection (c);
2-1 (2) maintain and review records of property, casualty,
2-2 or liability insurance coverages purchased by or for a state
2-3 agency;
2-4 (3) administer guidelines adopted by the board for a
2-5 comprehensive risk management program applicable to all state
2-6 agencies to reduce property and liability losses, including
2-7 workers' compensation losses;
2-8 (4) [(2)] review, verify, monitor, and approve risk
2-9 management programs adopted by state agencies;
2-10 (5) [(3)] assist a state agency that has not
2-11 implemented an effective risk management program to implement a
2-12 comprehensive program that meets the guidelines established by the
2-13 board; and
2-14 (6) [(4)] administer the workers' compensation
2-15 insurance program for state employees established under Chapter
2-16 501.
2-17 (c) In acting as a full-service insurance and risk manager
2-18 for state agencies, the office may:
2-19 (1) purchase insurance coverage for a state agency
2-20 under any line of insurance other than health or life insurance,
2-21 including liability insurance authorized under Chapter 612,
2-22 Government Code; or
2-23 (2) advise the state agency on available coverages and
2-24 the premium costs associated with those coverages and otherwise
2-25 assist the agency in the purchase of coverage.
2-26 Sec. 412.0115. AFFILIATION WITH OFFICE OF ATTORNEY GENERAL.
2-27 The office is administratively attached to the office of the
3-1 attorney general and the office of the attorney general shall
3-2 provide the facilities for the office, but the office shall be
3-3 independent of the office of the attorney general's direction.
3-4 SECTION 3. Section 412.012, Labor Code, is amended to read as
3-5 follows:
3-6 Sec. 412.012. FUNDING. [(a)] The office shall be
3-7 administered through money appropriated by the legislature and
3-8 through:
3-9 (1) interagency contracts for purchase of insurance
3-10 coverage and the operation of the risk management program; and
3-11 (2) the allocation program for the financing of state
3-12 workers' compensation benefits.
3-13 Sec. 412.0121. INTERAGENCY CONTRACTS. (a) [(b) Interagency
3-14 Contracts. (1)] Each state agency shall enter into an interagency
3-15 contract with the office under Chapter 771, Government Code, to pay
3-16 the costs incurred by the office in administering this chapter for
3-17 the benefit of that state agency.
3-18 (b) Costs payable under the contract include the cost of:
3-19 (1) [(A)] services of office employees;
3-20 (2) [(B)] materials; and
3-21 (3) [(C)] equipment, including computer hardware and
3-22 software.
3-23 (c) [(2)] The amount of the costs to be paid by a state
3-24 agency under the interagency contract is based on:
3-25 (1) [(A)] the number of employees of the agency
3-26 compared with the total number of employees of all state agencies
3-27 to which this chapter applies;
4-1 (2) [(B)] the dollar value of the agency's property
4-2 and asset and liability exposure compared to that of all state
4-3 agencies to which this chapter applies; and
4-4 (3) [(C)] the number and aggregate cost of claims and
4-5 losses incurred by the state agency compared to those incurred by
4-6 all state agencies to which this chapter applies.
4-7 Sec. 412.0122. STATE SELF-INSURING FOR WORKERS'
4-8 COMPENSATION. (a) [(c)] The state is self-insuring with respect
4-9 to an employee's compensable injury.
4-10 (b) The legislature shall appropriate the amount designated
4-11 by the appropriation structure for the payment of state workers'
4-12 compensation claims costs to the office. This section does not
4-13 affect the reimbursement of claims costs by funds other than
4-14 general revenue funds, as provided by the General Appropriations
4-15 Act.
4-16 Sec. 412.0123. DEPOSIT OF WORKERS' COMPENSATION SUBROGATION
4-17 RECOVERIES. (a) [(d) State Workers' Compensation Account. (1)]
4-18 All money recovered by the director from a third party through
4-19 subrogation shall be deposited into the state workers' compensation
4-20 account in general revenue.
4-21 (b) [(2)] Funds deposited under this section may be used for
4-22 the payment of workers' compensation [and other] benefits to state
4-23 employees.
4-24 SECTION 4. Section 412.021(a), Labor Code, is amended to read
4-25 as follows:
4-26 (a) The office is governed by the risk management board.
4-27 Members of the board must have demonstrated experience in the
5-1 fields [field] of:
5-2 (1) insurance and insurance regulation;
5-3 (2) workers' compensation; and
5-4 (3) risk management administration.
5-5 SECTION 5. Section 412.022(b), Labor Code, is amended to read
5-6 as follows:
5-7 (b) A training program established under this section must
5-8 provide information to the member regarding:
5-9 (1) the enabling legislation that created the board;
5-10 (2) the program operated by the board;
5-11 (3) the role and functions of the board;
5-12 (4) the rules of the board, with an emphasis on the
5-13 rules that relate to disciplinary and investigatory authority;
5-14 (5) the current budget for the board;
5-15 (6) the results of the most recent formal audit of the
5-16 board;
5-17 (7) the requirements of:
5-18 (A) the open meetings law, Chapter 551,
5-19 Government Code;
5-20 (B) the public information [open records] law,
5-21 Chapter 552, Government Code; and
5-22 (C) the administrative procedure law, Chapter
5-23 2001, Government Code;
5-24 (8) the requirements of the conflict of interest laws
5-25 and other laws relating to public officials; and
5-26 (9) any applicable ethics policies adopted by the
5-27 board or the Texas Ethics Commission.
6-1 SECTION 6. Section 412.041, Labor Code, is amended to read as
6-2 follows:
6-3 Sec. 412.041. DIRECTOR DUTIES[; RESPONSIBILITIES]. (a) The
6-4 director serves as the state risk manager.
6-5 (b) The director shall supervise the development and
6-6 administration of systems to:
6-7 (1) identify the property and liability losses,
6-8 including workers' compensation losses, of each state agency;
6-9 (2) identify the administrative costs of risk
6-10 management incurred by each state agency;
6-11 (3) identify and evaluate the exposure of each state
6-12 agency to claims for property and liability losses, including
6-13 workers' compensation; and
6-14 (4) reduce the property and liability losses,
6-15 including workers' compensation, incurred by each state agency.
6-16 (c) In addition to other duties provided by this chapter, by
6-17 Chapter 501, and by the board, the director shall:
6-18 (1) keep full and accurate minutes of the transactions
6-19 and proceedings of the board;
6-20 (2) be the custodian of the files and records of the
6-21 board;
6-22 (3) prepare and recommend to the board plans and
6-23 procedures necessary to implement the purposes and objectives of
6-24 this chapter and Chapter 501, including rules and proposals for
6-25 administrative procedures consistent with this chapter and Chapter
6-26 501;
6-27 (4) hire staff as necessary to accomplish the
7-1 objectives of the board and may delegate powers and duties to
7-2 members of that staff as necessary;
7-3 (5) be responsible for the investigation of complaints
7-4 and for the presentation of formal complaints;
7-5 (6) attend all meetings of the board as a nonvoting
7-6 participant; and
7-7 (7) handle the correspondence of the board and obtain,
7-8 assemble, or prepare the reports and information that the board may
7-9 direct or authorize.
7-10 (d) If necessary to the administration of this chapter and
7-11 Chapter 501, the director, with the approval of the board, may
7-12 secure and provide for services that are necessary and may employ
7-13 and compensate within available appropriations professional
7-14 consultants, technical assistants, and employees on a full-time or
7-15 part-time basis.
7-16 (e) The director also serves as the administrator of the
7-17 government employees workers' compensation insurance program.
7-18 (f) In administering and enforcing Chapter 501 as regards a
7-19 compensable injury with a date of injury before September 1, 1995,
7-20 the director shall act in the capacity of employer and insurer. In
7-21 administering and enforcing Chapter 501 as regards a compensable
7-22 injury with a date of injury on or after September 1, 1995, the
7-23 director shall act in the capacity of insurer. [(effective for
7-24 dates of injury before September 1, 1995.)]
7-25 (g) [(1)] The director shall act as an adversary before the
7-26 commission and courts and present the legal defenses and positions
7-27 of the state as an employer and insurer, as appropriate.
8-1 (h) [(2)] For the purposes of Subsection (f) [this
8-2 subsection] and Chapter 501, the director is entitled to the legal
8-3 counsel of the attorney general.
8-4 (i) In administering Chapter 501 the [(3) The] director is
8-5 subject to the rules, orders, and decisions of the commission in
8-6 the same manner as a private employer, insurer, or association.
8-7 (j) [(g) In administering and enforcing Chapter 501, the
8-8 director shall act in the capacity of insurer. (effective for
8-9 dates of injury on or after September 1, 1995.)]
8-10 [(1) The director shall act as an adversary before the
8-11 commission and courts and present the legal defenses and positions
8-12 of the state as an insurer.]
8-13 [(2) For purposes of this subsection and Chapter 501,
8-14 the director is entitled to legal counsel of the attorney general.]
8-15 [(3) The director is subject to the rules, orders, and
8-16 decisions of the commission in the same manner as an insurer or
8-17 association.]
8-18 [(h)] The director shall:
8-19 (1) prepare for adoption by the board procedural rules
8-20 and prescribe forms necessary for the effective administration of
8-21 this chapter and Chapter 501 [(effective for dates of injury before
8-22 September 1, 1995)]; and
8-23 (2) prepare for adoption by the board and enforce
8-24 reasonable rules for the prevention of accidents and injuries[;]
8-25 [(3) prepare for adoption by the board procedural
8-26 rules and prescribe forms necessary for the effective
8-27 administration of this chapter and Chapter 501]. [(effective for
9-1 dates of injury on or after September 1, 1995.)]
9-2 (k) [(i)] The director shall hold hearings on all proposed
9-3 rules and provide reasonable opportunity for the officers of state
9-4 agencies to testify at hearings on all proposed rules under this
9-5 chapter and Chapter 501.
9-6 (l) [(j)] The director shall furnish copies of all rules to:
9-7 (1) the commission;
9-8 (2) the commissioner of the Texas Department of
9-9 Insurance; and
9-10 (3) [to] the administrative heads of all state
9-11 agencies affected by this chapter and Chapter 501.
9-12 SECTION 7. Section 412.051, Labor Code, is amended to read as
9-13 follows:
9-14 Sec. 412.051. DUTIES OF STATE AGENCIES; INSURANCE REPORTING
9-15 REQUIREMENTS. (a) Each state agency [subject to this chapter]
9-16 shall actively manage the risks of that agency by:
9-17 (1) developing, implementing, and maintaining programs
9-18 designed to assist employees who sustain compensable injuries to
9-19 return to work; and
9-20 (2) cooperating with the office and the Texas
9-21 Department of Insurance in the purchase of property, casualty, and
9-22 liability lines of insurance coverage.
9-23 (b) In addition to the report required under Section
9-24 412.053, each state agency that purchases property, casualty, or
9-25 liability insurance coverage in a manner other than through the
9-26 services provided by the office shall report the purchase to the
9-27 office in the manner prescribed by the office. The state agency
10-1 shall report the purchase not later than the 30th day before the
10-2 date on which the policy coverage is scheduled to take effect. The
10-3 office may require a state agency to submit copies of insurance
10-4 forms, policies, and other relevant information.
10-5 SECTION 8. Section 412.053(b), Labor Code, is amended to read
10-6 as follows:
10-7 (b) The information shall be reported not later than the
10-8 60th day before the last day [on or before 60 days after the close]
10-9 of each fiscal year.
10-10 SECTION 9. Subchapter E, Chapter 21, Insurance Code, is
10-11 amended by adding Article 21.49-15A to read as follows:
10-12 Art. 21.49-15A. INSURER REPORT TO STATE OFFICE OF RISK
10-13 MANAGEMENT
10-14 Sec. 1. DEFINITIONS. In this article:
10-15 (1) "Insurer" means an insurance company,
10-16 inter-insurance exchange, mutual or reciprocal association, county
10-17 mutual insurance company, Lloyd's plan company, or other entity
10-18 that is authorized by the Texas Department of Insurance to engage
10-19 in the business of insurance in this state.
10-20 (2) "Office" means the State Office of Risk
10-21 Management.
10-22 (3) "State agency" has the meaning assigned by Section
10-23 412.001, Labor Code.
10-24 Sec. 2. REPORTING REQUIREMENTS. (a) Each insurer that
10-25 enters into an insurance policy or other contract or agreement with
10-26 a state agency for the purchase of property, casualty, or liability
10-27 insurance coverage by the state agency, including a policy,
11-1 contract, or agreement subject to competitive bidding requirements,
11-2 shall report the sale to the State Office of Risk Management in the
11-3 manner prescribed by that office.
11-4 (b) The insurer shall report the sale not later than the
11-5 30th day before the effective date of the insurance coverage.
11-6 (c) The office may require an insurer to submit copies of
11-7 insurance forms, policies, and other relevant information.
11-8 (d) The office shall adopt rules as necessary to implement
11-9 this article. In adopting those rules, the office shall consult
11-10 with the commissioner.
11-11 (e) Failure by an insurer to comply with the reporting
11-12 requirements adopted under this article constitutes grounds for the
11-13 imposition of sanctions against that insurer under Chapter 82.
11-14 SECTION 10. Section 412.052, Labor Code, is repealed.
11-15 SECTION 11. A person serving as a member of the risk
11-16 management board on the effective date of this Act is entitled to
11-17 serve until the expiration of the term for which the member was
11-18 appointed. On the expiration of that term, the governor shall
11-19 appoint a member who meets the qualifications established by
11-20 Section 412.021, Labor Code, as amended by this Act.
11-21 SECTION 12. (a) Except as provided by Subsections (b) and
11-22 (c) of this section, this Act takes effect September 1, 2001.
11-23 (b) Not later than December 1, 2001, the risk management
11-24 board shall adopt rules to implement:
11-25 (1) the changes in law made by the amendments made by
11-26 this Act to Chapter 412, Labor Code; and
11-27 (2) Article 21.49-15A, Insurance Code, as added by
12-1 this Act.
12-2 (c) An insurer is not required to comply with the reporting
12-3 requirements adopted under Article 21.49-15A, Insurance Code, as
12-4 added by this Act, until January 1, 2002. Article 21.49-15A,
12-5 Insurance Code, as added by this Act, applies only to an insurance
12-6 policy, contract, or agreement delivered, issued for delivery, or
12-7 renewed on or after January 1, 2002. A policy, contract, or
12-8 agreement delivered, issued for delivery, or renewed before January
12-9 1, 2002, is governed by the law as it existed immediately before
12-10 the effective date of this Act, and that law is continued in effect
12-11 for that purpose.