|
A BILL TO BE ENTITLED
|
|
AN ACT
|
|
relating to the operation and regulation of certain consolidated |
|
insurance programs; providing penalties. |
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
SECTION 1. Title 2, Insurance Code, is amended by adding |
|
Subtitle C to read as follows: |
|
SUBTITLE C. PROGRAMS AFFECTING MULTIPLE LINES OF INSURANCE |
|
CHAPTER 151. CONSOLIDATED INSURANCE PROGRAMS |
|
SUBCHAPTER A. GENERAL PROVISIONS |
|
Sec. 151.001. DEFINITIONS. In this chapter: |
|
(1) "Administrator" means a person who operates and |
|
manages a consolidated insurance program on behalf of a principal. |
|
The term includes a person who, in the regular course of business, |
|
operates and manages a consolidated insurance program as an agent |
|
of a principal. |
|
(2) "Consolidated insurance program" means a program |
|
under which a principal, for a contractor or contractors on a |
|
construction project, provides general liability insurance |
|
coverage, workers' compensation insurance coverage, or both that |
|
are incorporated into an insurance program for a single |
|
construction project or multiple construction projects. |
|
(3) "Construction project" means construction, |
|
remodeling, maintenance, or repair of improvements to real |
|
property. |
|
(4) "Construction project site" means the immediate |
|
construction location and areas emanating from that location, such |
|
as adjacent sidewalks, streets, storage areas, temporary |
|
construction yards, and staging areas. |
|
(5) "Contractor" includes: |
|
(A) a prime contractor; |
|
(B) a general contractor; |
|
(C) a subcontractor; and |
|
(D) any other person who has signed a |
|
construction contract covered under the consolidated insurance |
|
program, including a client company of a staff leasing services |
|
company, as defined by Chapter 91, Labor Code. |
|
(6) "Insurance credit" means a discount on a contract |
|
price offered to a principal by a contractor, or to a contractor by |
|
another contractor, bidding on a construction project contract in |
|
consideration of the principal providing insurance coverage for the |
|
construction project that covers the contractor. |
|
(7) "Insurer" means an insurance company, including a |
|
mutual insurance company or a capital stock company, a reciprocal |
|
or interinsurance exchange, a Lloyd's plan, or another legal entity |
|
authorized to engage in the business of general liability insurance |
|
or workers' compensation insurance in this state. The term |
|
includes an eligible surplus lines insurer. |
|
(8) "Residential construction project" means a |
|
construction project involving a single-family house, a duplex, a |
|
triplex, a quadruplex, or a unit in a multi-unit structure used for |
|
residential purposes: |
|
(A) that is: |
|
(i) owned by one or more adult persons; and |
|
(ii) used or intended to be used as a |
|
dwelling by one of the owners; or |
|
(B) being constructed or intended to be newly |
|
constructed with the intention of sale to a person and for a purpose |
|
described by Paragraph (A). |
|
Sec. 151.002. PRINCIPAL. (a) For purposes of this chapter, |
|
"principal" means the person who procures the insurance policy. |
|
(b) The principal under a consolidated insurance program is |
|
the person responsible for the payment of the premium on the |
|
insurance coverage. The principal is typically the first named |
|
insured on a general liability insurance policy. |
|
Sec. 151.003. ROLLING CONSOLIDATED INSURANCE PROGRAM. For |
|
purposes of this chapter, a "rolling consolidated insurance |
|
program" means a consolidated insurance program based on a fixed |
|
expiration date and the construction value of the ongoing |
|
operations related to certain construction projects. The |
|
construction project may be: |
|
(1) at one location and involve multiple projects or |
|
phases with an overall duration and value as provided by the policy |
|
coverage; or |
|
(2) at multiple locations and involve different |
|
construction projects among different parties within the overall |
|
duration and value as provided by the policy coverage, such as: |
|
(A) multiple schools being constructed by a |
|
school district under a bonded indebtedness program; or |
|
(B) certain multiple construction projects for |
|
which a principal or contractor purchases a single insurance |
|
program. |
|
Sec. 151.004. RULES. The commissioner shall adopt rules in |
|
the manner provided by Subchapter A, Chapter 36, as necessary to |
|
implement and enforce the purpose and intent of this chapter. |
|
[Sections 151.005-151.050 reserved for expansion] |
|
SUBCHAPTER B. GENERAL REQUIREMENTS FOR CONSOLIDATED INSURANCE |
|
PROGRAM |
|
Sec. 151.051. GENERAL REQUIREMENTS. An insurance policy |
|
issued under a consolidated insurance program must: |
|
(1) provide coverages in the manner required by the |
|
department under this code; and |
|
(2) comply with: |
|
(A) commissioner rules and all statutory |
|
requirements; and |
|
(B) the requirements adopted under this chapter. |
|
Sec. 151.052. REQUIRED COVERAGES. (a) An insurance policy |
|
issued under a consolidated insurance program must provide |
|
coverages for all operations on the construction project site that |
|
are necessary and incidental to the construction project to the |
|
extent of the type of insurance that is provided under the policy. |
|
(b) This chapter or a contract requirement may not be |
|
interpreted to prevent a contractor from obtaining any insurance |
|
coverage not provided by the consolidated insurance program to |
|
protect the contractor and the construction project. |
|
Sec. 151.053. NOTICE OF CERTAIN CHANGES. (a) Except as |
|
provided by Subsection (b), after the execution of a construction |
|
contract by the principal, the coverages or limits under the |
|
consolidated insurance program may not be reduced, nonrenewed, or |
|
canceled without written notice provided to the principal and all |
|
contractors. The notice required under this subsection must be |
|
provided by the insurer or administrator not later than the 60th day |
|
before the effective date of the reduction, nonrenewal, or |
|
cancellation. |
|
(b) A notice to cancel coverage due to nonpayment of premium |
|
is effective only after written notice is provided to the principal |
|
at least 10 days before the scheduled effective date of the |
|
cancellation due to nonpayment of premium. |
|
(c) If any coverage is canceled, the insurer or |
|
administrator shall notify each contractor in writing that coverage |
|
has been canceled. The notice under this subsection must be sent |
|
not later than the effective date of the cancellation of coverage. |
|
Sec. 151.054. COVERAGE OF CONTRACTORS. (a) Each |
|
contractor on a construction project covered by a consolidated |
|
insurance program must: |
|
(1) be listed as a named insured on each general |
|
liability insurance policy under the program; and |
|
(2) have equal rights under the general liability |
|
policy with the principal and other contractors, subject to |
|
insurance industry standard differences between a first-named |
|
insured and a named insured. |
|
(b) Subsection (a) does not apply to a policy that is issued |
|
individually in the name of the contractor as the first-named |
|
insured under a consolidated insurance program. |
|
(c) The principal or a contractor may not require a |
|
contractor to obtain an additional insured endorsement on the |
|
contractor's separately maintained insurance policy that is of the |
|
same general type as the insurance coverage provided by the |
|
consolidated insurance program other than an insurance policy |
|
covering off-site work for ongoing operations that is related to |
|
the project and that is not covered by the consolidated insurance |
|
program. |
|
(d) The coverages under the consolidated insurance program |
|
must be primary and noncontributory to any insurance policy |
|
separately maintained by a contractor covered by the consolidated |
|
insurance program that is of the same general type as the insurance |
|
coverages provided by the consolidated insurance program. |
|
Sec. 151.055. COMPLIANCE BY PRINCIPAL AND OTHER |
|
CONTRACTORS. (a) A principal under a consolidated insurance |
|
program who does not comply with the requirements of this chapter |
|
may not, directly or indirectly, including by deduction from a |
|
payment or by requesting an insurance credit, charge a contractor |
|
for any insurance coverage provided to the contractor by the |
|
program. |
|
(b) Failure by a principal to maintain the structure, |
|
management, or insurance coverage, or to reinstate the limits of |
|
liability if the limits are fully expended in a policy year, |
|
constitutes a material breach of all construction contracts and |
|
subcontracts being performed under the consolidated insurance |
|
program. For purposes of this subsection, the determination of |
|
when limits of liability are fully expended shall be based on |
|
incurred losses and expenses. |
|
(c) A contractor who contracts with a lower-tier contractor |
|
may not charge the lower-tier contractor for any insurance coverage |
|
if the principal has failed to comply with the requirements of this |
|
chapter. |
|
(d) For purposes of this section, noncompliance by a |
|
principal does not include substantial compliance by a principal |
|
with the requirements of this chapter such that the lack of full |
|
compliance does not violate the purpose and intent of this chapter |
|
and no person is harmed from failure to obtain full compliance. |
|
Sec. 151.056. SUBROGATION. (a) The principal and a |
|
contractor do not have subrogation rights against each other for a |
|
general liability claim covered by the consolidated insurance |
|
program. |
|
(b) A contractor and another contractor do not have |
|
subrogation rights against each other for a general liability claim |
|
covered by the consolidated insurance program. |
|
Sec. 151.057. APPLICATION TO GENERAL LIABILITY COVERAGE. |
|
If a consolidated insurance program includes general liability |
|
coverage, coverage for a contractor under the consolidated |
|
insurance program must be provided for: |
|
(1) a negligent act of a contractor, whether caused by |
|
a direct act of the contractor or assumed under contract; and |
|
(2) the contractor's ongoing operations and the |
|
contractor's completed operations. |
|
Sec. 151.058. DURATION OF GENERAL LIABILITY COVERAGE. (a) |
|
A consolidated insurance program that provides general liability |
|
coverage must continue completed operations insurance coverage |
|
until the expiration of the limitations period for bringing an |
|
action for damages as provided by Section 16.009, Civil Practice |
|
and Remedies Code. |
|
(b) A contractor's separately maintained insurance policy |
|
may not exclude coverage for ongoing operations of the contractor |
|
for warranty or punch-out work on a construction project covered by |
|
a consolidated insurance program that occurs after the contractor |
|
has received written notice from the principal, insurer, or |
|
administrator that the consolidated insurance program has ended. |
|
(c) The principal, administrator, or insurer shall notify |
|
in writing each contractor covered under a consolidated insurance |
|
program of the date that ongoing operations coverage ends under the |
|
program. The notice must be sent not later than the date on which |
|
the coverage ends. |
|
Sec. 151.059. INSURER REQUIREMENTS; INSURER RATINGS. (a) |
|
All insurance coverages under a consolidated insurance program for |
|
a residential or nonresidential construction project must be |
|
provided by an insurer that has: |
|
(1) a financial strength rating of at least A- and a |
|
financial size rating of at least Class XI, as currently reported by |
|
the A. M. Best Company; or |
|
(2) an equivalent rating made by a similar rating |
|
organization recognized by the commissioner. |
|
(b) Insurance policies providing coverage under the |
|
consolidated insurance program shall be delivered to the |
|
first-named insured not later than the 60th day after the date on |
|
which the coverage takes effect. |
|
(c) The requirements of this section must be maintained for |
|
the duration of the construction project. |
|
Sec. 151.060. DEFENSE COVERAGE FOR CLAIM OR SUIT. (a) In |
|
the event of a lawsuit or arbitration proceeding that is covered by |
|
the consolidated insurance program, an insurance policy under the |
|
program must provide coverage for the defense of each contractor. |
|
(b) Defense costs for a contractor under Subsection (a) may |
|
not be included in the limit of liability of an insurance policy |
|
under the consolidated insurance program if the defense costs for |
|
the principal are not included in the limit of liability. |
|
Sec. 151.061. PAYMENT OF CERTAIN DEDUCTIBLES, LOSSES, OR |
|
PENALTIES. (a) Except as provided by Subsection (b), a principal |
|
is solely liable for: |
|
(1) any coverage deductibles or losses in a |
|
retrospective rating plan or other loss-sensitive rating plan under |
|
a consolidated insurance program; |
|
(2) any penalties incurred under the program; and |
|
(3) all deductibles applicable to any policy provided |
|
under the consolidated insurance program. |
|
(b) If a contractor covered by the consolidated insurance |
|
program is the cause of a property damage accident for which |
|
insurance is provided under the consolidated insurance program, the |
|
contractor shall reimburse the principal for any deductible amount |
|
for which the principal is responsible under Subsection (a). The |
|
deductible amount for which the contractor is responsible under |
|
this subsection may not exceed the lesser of: |
|
(1) the amount of the contractor's deductible for the |
|
same general type of insurance coverage separately maintained by |
|
the contractor; or |
|
(2) $5,000. |
|
Sec. 151.062. PREMIUMS ASSESSED TO CONTRACTOR. If any |
|
premiums for coverage subject to experience modification under a |
|
consolidated insurance program on a single or multiple construction |
|
project are assessed to a contractor, the contractor's most recent |
|
experience modifier, as of the date on which the contractor |
|
submitted the contractor's price proposal, must be used in the |
|
computation of the premium to be assessed to the contractor for the |
|
duration of the construction project. |
|
Sec. 151.063. DATA REPORTS FOR WORKERS' COMPENSATION. (a) |
|
The administrator shall report at least bimonthly the loss and |
|
payroll data that relates to a contractor in detail to the |
|
contractor who is the subject of the report. |
|
(b) The initial report under Subsection (a) must be sent not |
|
later than the 15th day of the second month after the date on which |
|
the contractor begins work on the construction project that |
|
requires payroll reports, with subsequent bimonthly reports sent |
|
not later than the 15th day of the second month after a month in |
|
which the contractor performed work covered by the consolidated |
|
insurance program. |
|
(c) The administrator shall send to each contractor |
|
annually a written compilation of all payroll and loss information |
|
attributable to the contractor who is the subject of the report. |
|
The report must be sent not later than the 120th day after the |
|
expiration date of the workers' compensation policy. |
|
(d) The contractor who is the subject of the report under |
|
Subsection (c) shall send a written notice of any discrepancies in |
|
the payroll or loss information to the administrator not later than |
|
the 30th day after the date on which the contractor receives the |
|
report. |
|
(e) The administrator shall resolve any discrepancies |
|
reported under Subsection (d) not later than the 30th day after the |
|
date of receipt of the contractor's report of discrepancies under |
|
Subsection (d), and shall report the correct information to the |
|
contractor and to the insurer. |
|
(f) If the contractor who is the subject of the report is the |
|
sole source of the information required for compilation of the |
|
report, the deadlines under Subsection (b), (c), or (e) shall be |
|
extended by one day for each day the contractor who is the subject |
|
of the report delays providing the necessary information. |
|
Sec. 151.064. AUDIT REQUIREMENTS. (a) Except as provided |
|
by Subsection (b), any required audit of a contractor covered by a |
|
consolidated insurance program who is subject to a premium charge |
|
or deduction for the coverage must be completed not later than the |
|
90th day after the date on which the contractor completes the |
|
contractor's work on the construction project. |
|
(b) The audit completion date under Subsection (a) shall be |
|
extended by one day for each day the contractor subject to the audit |
|
delays completion of a necessary audit by failing to provide the |
|
auditor with access to the contractor's records after the |
|
contractor has received written notice from the administrator, |
|
insurer, or auditor stating the date on which the audit is to be |
|
conducted. |
|
(c) In complying with this section, the insurer shall comply |
|
with the commissioner's rules relating to: |
|
(1) the statistical plan for workers' compensation; |
|
and |
|
(2) the reporting requirements established under the |
|
statistical plan. |
|
Sec. 151.065. LIMITED EXCEPTION TO RATING STANDARDS. |
|
Sections 2053.002 and 2251.052, Insurance Code, and Section 1, |
|
Chapter 50, Acts of the 53rd Legislature, Regular Session, 1953 |
|
(Article 5.77, Vernon's Texas Insurance Code), do not apply to |
|
rates used for an insurance policy issued under a consolidated |
|
insurance program under this chapter to the extent that those laws |
|
require an insurer to produce rates for individual risks. |
|
[Sections 151.066-151.100 reserved for expansion] |
|
SUBCHAPTER C. COVERAGE LIMITS |
|
Sec. 151.101. GENERAL REQUIREMENTS. Subject to Section |
|
151.058, aggregate and per-occurrence limits of all general |
|
liability insurance coverages under a consolidated insurance |
|
program apply to all contractors under the program for the duration |
|
of each construction project covered by the program. |
|
Sec. 151.102. PER-OCCURRENCE LIMITS. (a) For a |
|
residential construction project, the per-occurrence general |
|
liability limit must be not less than the greater of: |
|
(1) 20 percent of the overall construction project |
|
value; or |
|
(2) $5 million. |
|
(b) For a nonresidential construction project that has an |
|
overall construction project value that does not exceed $400 |
|
million, the per-occurrence general liability limit must be not |
|
less than the greater of: |
|
(1) 25 percent of the overall construction project |
|
value; or |
|
(2) $50 million. |
|
(c) For a nonresidential construction project that has an |
|
overall construction project value that exceeds $400 million, the |
|
per-occurrence general liability limit must be not less than $100 |
|
million. |
|
(d) For a nonresidential construction project covered by a |
|
rolling consolidated insurance program, the per-occurrence general |
|
liability limit must be not less than the greater of: |
|
(1) 25 percent of the overall construction project |
|
value during the 12-month period immediately preceding the |
|
inception date of the policy; or |
|
(2) $50 million. |
|
(e) For employer liability coverage under a consolidated |
|
insurance program that provides workers' compensation insurance |
|
coverage, the per-occurrence liability limit may not be less than |
|
the applicable general liability limit. |
|
Sec. 151.103. ANNUAL REINSTATEMENT OF LIABILITY LIMITS. |
|
The consolidated insurance program must reinstate annually the |
|
liability limits for each policy subject to the program or be |
|
replaced by other policies that provide equivalent coverage and |
|
limits. This section does not apply to a completed operations |
|
coverage limit on completion of the construction project. |
|
Sec. 151.104. NOTICE REGARDING REDUCTION IN LIMIT. (a) The |
|
insurer, or the administrator on the insurer's behalf, shall notify |
|
all contractors in writing not later than the 10th day after the |
|
date the total limit of coverage for any type of liability coverage |
|
issued under the consolidated insurance program is reduced by: |
|
(1) 50 percent; and |
|
(2) each additional 10 percentage point reduction |
|
after the initial 50 percent reduction. |
|
(b) The reduction in the limit under Subsection (a) shall be |
|
computed based on incurred losses and expenses. |
|
(c) The notice under Subsection (a) must describe: |
|
(1) the initial limit of liability coverage; and |
|
(2) the limit of liability coverage that remains as of |
|
the notice date. |
|
(d) If the limits of a policy have been expended, triggering |
|
the limits of another policy, the notice under Subsection (a) is |
|
required only if the combined limit of all policies providing the |
|
coverage has been reached. |
|
(e) The limit of liability may not be reduced if the insurer |
|
fails to comply with Subsection (a). |
|
[Sections 151.105-151.150 reserved for expansion] |
|
SUBCHAPTER D. DISCLOSURE REQUIREMENTS FOR ADMINISTRATION OF |
|
CONSOLIDATED INSURANCE PROGRAM |
|
Sec. 151.151. REQUIRED DISCLOSURE AT BID SOLICITATION. At |
|
the time a principal or contractor is soliciting bids for a |
|
construction project, the principal or contractor must disclose |
|
prominently in the project plans, specifications, and any request |
|
for bids or proposals that the project may be covered by a |
|
consolidated insurance program subject to this chapter. |
|
Sec. 151.152. GENERAL ELEMENTS OF BID SOLICITATION |
|
DISCLOSURE. (a) Each disclosure made under Section 151.151 must |
|
include information sufficient to reasonably describe the |
|
insurance coverage and limits that will be provided under the |
|
consolidated insurance program and the program operation such that |
|
a bidder is able to compare the bidder's own insurance program with |
|
the coverages, limits, and operation program provided under the |
|
consolidated insurance program. |
|
(b) The disclosure under Subsection (a) is not required to |
|
be as detailed as the disclosure required under Section 151.153. |
|
Sec. 151.153. REQUIRED DISCLOSURE PRIOR TO CONTRACT |
|
EXECUTION. (a) A principal may establish for a construction |
|
project a minimum construction contract amount for a contractor to |
|
be included in a consolidated insurance program. |
|
(b) Not later than the 14th day before the date on which a |
|
principal or contractor executes a contract for a construction |
|
project covered by a consolidated insurance program, the principal |
|
or contractor that solicited the bid must make a written disclosure |
|
to the contractor that contains detailed information concerning the |
|
consolidated insurance program. |
|
(c) After receipt of the written disclosure required under |
|
Subsection (b), if the disclosure contains any adverse material |
|
change from the disclosure made under Section 151.151, a contractor |
|
may, without recourse or liability for damage to any person: |
|
(1) withdraw the contractor's price proposal for work |
|
on the construction project; or |
|
(2) modify the price for the insurance component of |
|
the proposal for work on the construction project. |
|
Sec. 151.154. GENERAL ELEMENTS OF PRECONTRACT DISCLOSURE. |
|
Each disclosure made under Section 151.153 must include: |
|
(1) the name and address of each insurer providing an |
|
insurance policy or contract under the consolidated insurance |
|
program and identification of the coverage each insurer will |
|
provide; |
|
(2) the name, primary contact name, street address, |
|
city, state, and zip code of the administrator of the consolidated |
|
insurance program; |
|
(3) a copy of each form, including enrollment forms, |
|
claim forms, and payroll forms, that a contractor may be required to |
|
submit to the principal, administrator, or insurer; |
|
(4) the number, frequency, and subject matter of any |
|
payroll reports or payroll audits of the contractor required by the |
|
insurer, administrator, or principal; |
|
(5) the scope and limits of coverage for each |
|
insurance policy under the consolidated insurance program, |
|
including: |
|
(A) an accurate specimen policy that contains |
|
full and complete declarations, insuring agreements, policy |
|
conditions, limitations, coverages, and endorsements; and |
|
(B) a summary explanation for each endorsement; |
|
and |
|
(6) the scope of coverage and limits for each policy of |
|
excess insurance covering the consolidated insurance program, |
|
including: |
|
(A) a statement that the excess policy will have |
|
the same terms, conditions, and coverages as the primary policy, |
|
with any material exceptions listed; and |
|
(B) a summary explanation for each endorsement. |
|
Sec. 151.155. FORMULA FOR INSURANCE CREDITS. (a) The |
|
disclosure required under Section 151.151 must include the formula |
|
to be used by a contractor in computing any insurance credits. |
|
(b) The formula must include: |
|
(1) the discounts, credits, and rate variances used by |
|
the contractor; |
|
(2) examples of credit computations; |
|
(3) a method to incorporate any scheduled credits, |
|
premium discounts, or other items of credit or discount that apply |
|
specifically to the contractor; and |
|
(4) a specific explanation of how any premium increase |
|
or decrease resulting from payroll overruns or underruns will be |
|
applied. |
|
(c) A principal may not require an insurance credit of a |
|
contractor for coverage provided under the consolidated insurance |
|
program for flat rate excess liability coverage separately |
|
maintained by the contractor. |
|
[Sections 151.156-151.200 reserved for expansion] |
|
SUBCHAPTER E. PROGRAM ADMINISTRATION |
|
Sec. 151.201. ADMINISTRATOR. Each principal shall appoint |
|
a qualified administrator for the consolidated insurance program |
|
whose only duty is administration of the program. |
|
Sec. 151.202. POWERS AND DUTIES OF ADMINISTRATOR. (a) An |
|
administrator shall comply in a timely manner with the requirements |
|
of this section. |
|
(b) The administrator shall administer the enrollment of |
|
all contractors covered by the consolidated insurance program as |
|
necessary to ensure prompt coverage, effective on the date that the |
|
contractor begins work on the construction project. |
|
(c) The administrator shall: |
|
(1) maintain a current consolidated insurance program |
|
manual that contains a detailed description of the consolidated |
|
insurance program; |
|
(2) provide all contractors with a current copy of the |
|
manual that is consistent with the insurance provided and the scope |
|
of the program: |
|
(A) on the date of the contractor's enrollment in |
|
the program; and |
|
(B) not later than the seventh day after any |
|
changes are made to the manual; and |
|
(3) provide each contractor on the date of the |
|
contractor's enrollment in the program with a certificate that |
|
evidences the contractor's coverage under the program. |
|
(d) In addition to the certificate provided under |
|
Subsection (c)(3), the administrator shall obtain from the insurer |
|
or a licensed agent of the insurer and deliver a certificate of |
|
insurance on behalf of a contractor to evidence the coverages and |
|
limits provided by the consolidated insurance program not later |
|
than the fifth day after receipt of a request from a contractor. |
|
(e) If the insurer has issued insurance policies, the |
|
administrator shall ensure that each contractor receives insurance |
|
policies, or renewal certificates for previously issued policies, |
|
for all coverages provided by the consolidated insurance program |
|
not later than the earlier of: |
|
(1) the 30th day after the date the contractor is |
|
enrolled in the program; or |
|
(2) the date the contractor begins work on the |
|
project. |
|
(f) The administrator shall coordinate: |
|
(1) any regular reporting required of the contractors |
|
and any audits required of the contractors; |
|
(2) all meetings with the insurer, whether with the |
|
principal, the contractors, or other parties; and |
|
(3) availability and communication between |
|
contractors and any on-site medical facilities. |
|
(g) The administrator shall establish and disseminate to |
|
contractors: |
|
(1) clear procedures for proper filing of claims; and |
|
(2) required loss-control procedures. |
|
(h) The administrator shall ensure that: |
|
(1) all insurance coverages provided by the |
|
consolidated insurance program are maintained; and |
|
(2) all contractors are notified in writing promptly |
|
of any changes or cancellation in coverages provided by the |
|
consolidated insurance program. |
|
(i) The administrator shall monitor the financial standing |
|
of the insurer as provided by Section 151.059 and shall provide |
|
written notice to the principal and all contractors of any |
|
significant negative change not later than the 10th day after the |
|
date of the negative change. |
|
(j) The administrator shall prepare and present to a |
|
contractor on at least a bimonthly basis any required payroll |
|
reports, claim reviews, and loss-control reviews that relate to |
|
that contractor. |
|
(k) The administrator shall provide oversight and |
|
coordinate the filing of claims for the principal and any affected |
|
contractor until the construction project is completed and the |
|
operation of the consolidated insurance program and the |
|
administration of that program is closed. |
|
(l) Before the date on which the operation of the |
|
consolidated insurance program and administration of the program |
|
is closed, the administrator shall provide to the principal and |
|
each contractor a written notice that contains the contact person's |
|
name, company name, mailing address, telephone number, facsimile |
|
number, electronic mail address, and any other necessary contact |
|
information, of the person and company responsible for any closed, |
|
open, or future claims under the coverages provided by the |
|
consolidated insurance program. |
|
Sec. 151.203. FIDUCIARY DUTY OF ADMINISTRATOR. For |
|
purposes of this chapter and insurance benefits under the |
|
consolidated insurance program, the administrator owes a fiduciary |
|
duty to each contractor that participates in the program. |
|
Sec. 151.204. ERRORS AND OMISSIONS COVERAGE REQUIRED. The |
|
administrator shall maintain errors and omissions insurance |
|
coverage in the minimum amount of $5 million per occurrence for any |
|
liability of the administrator under this chapter. |
|
[Sections 151.205-151.250 reserved for expansion] |
|
SUBCHAPTER F. ENFORCEMENT PROVISIONS |
|
Sec. 151.251. GENERAL ENFORCEMENT; ADMINISTRATIVE |
|
PENALTIES. (a) The commissioner may impose a sanction under |
|
Chapter 82, issue a cease and desist order under Chapter 83, or |
|
assess an administrative penalty under Chapter 84, on any person |
|
regulated by the department who violates this chapter or a rule or |
|
order adopted by the commissioner under this chapter. |
|
(b) An administrative penalty assessed under this chapter |
|
may not exceed $30,000 for each day and for each violation. |
|
[Sections 151.252-151.300 reserved for expansion] |
|
SUBCHAPTER G. CIVIL LIABILITY |
|
Sec. 151.301. CIVIL LIABILITY FOR VIOLATION OF CHAPTER. |
|
(a) A contractor who is harmed by a violation of this chapter may |
|
bring a suit or pursue other remedies against the violating party |
|
for civil damages resulting from the violation, plus reasonable |
|
attorney's fees. |
|
(b) Venue for a suit brought under this section is in the |
|
county in which the construction project is located. |
|
SECTION 2. Chapter 151, Insurance Code, as added by this |
|
Act, applies only to a consolidated insurance program for a |
|
construction project that begins on or after January 1, 2008. A |
|
consolidated insurance program for a construction project that |
|
begins before January 1, 2008, is governed by the law as it existed |
|
immediately before the effective date of this Act, and that law is |
|
continued in effect for that purpose. |
|
SECTION 3. This Act takes effect September 1, 2007. |