By Junell H.B. No. 2527
77R4863 DLF-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to certificates of insurance used to evidence the
1-3 existence of workers' compensation insurance coverage.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subchapter D, Chapter 5, Insurance Code, is
1-6 amended by adding Article 5.56A to read as follows:
1-7 Art. 5.56A. CERTIFICATE OF INSURANCE. (a) The commissioner
1-8 shall by rule establish requirements for a certificate of insurance
1-9 issued by an insurance company to be used as evidence of the
1-10 existence of a workers' compensation policy. The rules must include
1-11 requirements designed to ensure that a fraudulent document can be
1-12 distinguished from an authentic certificate of insurance issued by
1-13 an insurance company.
1-14 (b) The certificate of insurance must state:
1-15 (1) the number of employees covered under the workers'
1-16 compensation insurance policy;
1-17 (2) the classes of employees covered under the
1-18 workers' compensation insurance policy; and
1-19 (3) an address for the insurance company that can be
1-20 used to request notification of cancellation or nonrenewal of the
1-21 policy, in accordance with Section 406.008, Labor Code.
1-22 SECTION 2. Section 406.008(a), Labor Code, is amended to read
1-23 as follows:
1-24 (a) An insurance company that cancels a policy of workers'
2-1 compensation insurance or that does not renew the policy by the
2-2 anniversary date of the policy shall deliver notice of the
2-3 cancellation or nonrenewal [by certified mail or in person] to the
2-4 employer, [and] the commission, and each person who requests notice
2-5 of the cancellation or nonrenewal in writing. The notice must be
2-6 provided by certified mail or in person not later than:
2-7 (1) the 30th day before the date on which the
2-8 cancellation or nonrenewal takes effect; or
2-9 (2) the 10th day before the date on which the
2-10 cancellation or nonrenewal takes effect if the insurance company
2-11 cancels or does not renew because of:
2-12 (A) fraud in obtaining coverage;
2-13 (B) misrepresentation of the amount of payroll
2-14 for purposes of premium calculation;
2-15 (C) failure to pay a premium when due;
2-16 (D) an increase in the hazard for which the
2-17 employer seeks coverage that results from an act or omission of the
2-18 employer and that would produce an increase in the rate, including
2-19 an increase because of a failure to comply with:
2-20 (i) reasonable recommendations for loss
2-21 control; or
2-22 (ii) recommendations designed to reduce a
2-23 hazard under the employer's control within a reasonable period; or
2-24 (E) a determination made by the commissioner of
2-25 insurance that the continuation of the policy would place the
2-26 insurer in violation of the law or would be hazardous to the
2-27 interest of subscribers, creditors, or the general public.
3-1 SECTION 3. (a) This Act takes effect September 1, 2001.
3-2 (b) The commissioner of insurance shall adopt rules as
3-3 required by Article 5.56A, Insurance Code, as added by this Act,
3-4 not later than December 1, 2001.
3-5 (c) Article 5.56A, Insurance Code, as added by this Act,
3-6 applies only to a certificate of insurance issued by an insurance
3-7 company on or after January 1, 2002.