80R4619 PB-F

By: Smithee H.B. No. 2014

A BILL TO BE ENTITLED

AN ACT

relating to the operation and regulation of certain consolidated insurance programs.

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 insurance coverages that are bundled into one insurance program for a single construction project or multiple construction projects. A consolidated insurance program may include only one type of insurance.

(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 receives insurance coverage under an insurance policy or contract subject to this chapter.

(6) "Insurance credit" means a discount on a contract price offered to a principal by a contractor bidding on a construction project contract in consideration of the principal providing insurance coverage for the construction project that covers the contractor.

(7) "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 contract or 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 the insurance contract or policy.

Sec. 151.003. 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 and to provide for the protection of policyholders, insureds, and workers under a consolidated insurance program. [Sections 151.004-151.050 reserved for expansion] SUBCHAPTER B. GENERAL REQUIREMENTS FOR CONSOLIDATED INSURANCE PROGRAM

Sec. 151.051. GENERAL REQUIREMENTS. An insurance contract or 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 the requirements adopted under this chapter.

Sec. 151.052. REQUIRED COVERAGES. (a) An insurance policy or contract 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 general type of insurance that is provided under the policy or contract.

(b) This chapter may not be interpreted to prevent a contractor from obtaining, and charging the cost of to the principal, 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 operations or coverages under the consolidated insurance program may not be materially changed, nonrenewed, or canceled without written notice provided to the principal and all contractors. The notice required under this subsection must be provided not later than the 60th day before the effective date of the material change, nonrenewal, or cancellation.

(b) A notice to cancel coverage due to nonpayment of premium is effective only after written notice 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. RIGHTS OF CONTRACTOR. (a) If the operations or coverages under a consolidated insurance program are materially changed, nonrenewed, or canceled, and are not replaced by the principal with equivalent operations or coverages, a contractor is entitled to:

(1) an increase in the contractor's construction project contract price to cover:

(A) the contractor's cost of insurance and overhead costs for procurement of insurance to replace the coverage provided by the consolidated insurance program; or

(B) the contractor's typical standard insurance coverage for the same general type of coverages provided under the consolidated insurance program; or

(2) suspend the contractor's construction project contract without recourse or liability for damage to any person if:

(A) the contractor has made a reasonable effort to obtain replacement insurance coverage; and

(B) the principal or another contractor does not agree to a reasonable change in coverage, as provided by this subsection.

(b) For purposes of Subsection (a), equivalent operations or coverages includes coverages provided by, as applicable, an insurer:

(1) that meets the requirements under Section 151.060; or

(2) notwithstanding Section 151.060, with 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, if replacement coverage is not available from an insurer that meets the requirements adopted under Section 151.060.

(c) Subsection (a)(2) does not apply to construction work that is not covered by the consolidated insurance program.

(d) A contractor who elects to suspend the contractor's construction project contract under Subsection (a)(2):

(1) shall provide written notice of the suspension to the principal and any other contractor covered under the consolidated insurance program with whom the contractor has a direct contractual relationship; and

(2) is entitled to payment for all properly performed labor or properly furnished materials and equipment, including overhead cost and profit for that labor, material, and equipment, that is supplied by the contractor to the construction project before the effective date of suspension of the contractor's construction project contract.

(e) A contractor who suspends the contractor's construction project contract under Subsection (a)(2) and is paid under Subsection (d) is responsible for the labor, materials, and equipment for which the contractor is paid as if the contract were not suspended.

Sec. 151.055. COVERAGE OF CONTRACTORS; EFFECT OF SEPARATE COVERAGE. (a) Each contractor on a construction project covered by a consolidated insurance program must:

(1) be listed as an additional named insured on each insurance policy and contract under the program; and

(2) have equal rights under the policy or contract with the principal and other contractors, subject to industry standard differences between a first-named insured and a named insured.

(b) Subsection (a) does not apply to a policy or contract 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 contract or policy that is of the same general type as the insurance coverage provided by the consolidated insurance program other than an insurance policy or contract covering offsite 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 or contract 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. 151.056. 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) 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.

(c) For purposes of this section, noncompliance by a principal includes material or significant matters and does not include inadvertent errors that are not repeated in a way that would cause a reasonable person to believe they are habitual or premeditated. Dates set as deadlines in this chapter shall be construed as material matters.

Sec. 151.057. SUBROGATION. (a) The principal and a contractor do not have subrogation rights against each other for a claim covered by the consolidated insurance program.

(b) A contractor and another contractor do not have subrogation rights against each other for a claim covered by the consolidated insurance program.

Sec. 151.058. APPLICATION TO GENERAL LIABILITY COVERAGE. If a consolidated insurance program includes general liability coverage, coverage for the construction project 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. 151.059. 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 Chapter 16, Civil Practice and Remedies Code.

(b) A contractor's separately maintained insurance 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.

Sec. 151.060. 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 XIII, 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 or contracts providing coverage under the consolidated insurance program shall be issued to the first-named insured not later than the 30th day after the date on which coverage has been bound or otherwise agreed to by the insurer.

(c) The requirements of this section must be maintained for the duration of the construction project.

Sec. 151.061. INDEMNIFICATION. (a) On a construction project covered by a consolidated insurance program, the consolidated insurance program must provide liability insurance to cover the obligation of a contractor insured under the consolidated insurance program to indemnify, hold harmless, or defend another person for any action that results in bodily injury or property damage.

(b) The minimum liability insurance coverage required under Subsection (a) must be equivalent to the coverage that would be available under the general liability coverage provided by the standard form promulgated by the Insurance Services Office and in effect on January 1, 2008, or a more recent form adopted by the commissioner by rule to replace that form.

(c) A contractor on a construction project on which a consolidated insurance program is used and under which the contractor is a participant in the program may not be required to indemnify, hold harmless, or defend any claim for any action that would be covered under the general liability coverage described by Subsection (b) unless the general liability coverage provided by the consolidated insurance program provides complete coverage for such an obligation. A requirement that violates this subsection that is included in a construction project contract is void.

Sec. 151.062. 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 or contract under the program must provide coverage for the defense of each contractor.

(b) A contractor covered by a consolidated insurance program has standing in any hearing or proceeding involving a workers' compensation or liability claim, including any claim adjustment and settlement negotiations, if that coverage is part of the consolidated insurance program. The contractor is entitled to representation at the hearing or proceeding by:

(1) an employee or agent of the contractor; and

(2) on the contractor's request, legal counsel covered by the consolidated insurance program.

Sec. 151.063. PAYMENT OF CERTAIN DEDUCTIBLES, LOSSES, OR PENALTIES. (a) Except as provided by Subsection (b), a principal shall pay:

(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) A principal may charge a contractor a small, reasonable deductible for a property damage loss that is caused by the contractor's direct negligence and is covered by the general liability contract or policy of the consolidated insurance program if the deductible amount and purpose are included in the disclosure made at bid solicitation. The purpose of the deductible is to encourage safe operations by the contractor. The deductible must be in proportion to the size and severity of the loss, not to exceed $5,000.

Sec. 151.064. PREMIUMS ASSESSED TO CONTRACTOR. If any premiums for coverage 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 construction project begins, must be used in the computation of the premium to be assessed to the contractor. The premium shall be adjusted annually to reflect any change in the contractor's experience modifier.

Sec. 151.065. 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 for the coverage must be completed not later than the 60th day after the date on which the contractor completes the work performed by the contractor on the construction project.

(b) The audit completion date under Subsection (a) must be extended by one day for each day the contractor subject to the audit delays completion of the 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.

Sec. 151.066. DATA REPORTS FOR WORKERS' COMPENSATION. (a) The administrator shall report at least quarterly 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 30th day after the last day of the calendar quarter on which work begins on the construction project, with subsequent quarterly reports sent not later than the 15th day of the month following the quarter covered by the report.

(c) The insurer shall report to the appropriate rating bureau annually, not later than the 60th day after the ending date of the experience rating period of a contractor who is the subject of the report, the loss and payroll data that relates to the contractor, with a final report not later than the 60th day after the completion date of the construction project.

(d) A report under Subsection (c) must include data that has been corrected after the investigation of any discrepancies reported by a contractor.

(e) On receipt of written notice of any erroneous information submitted to a rating bureau, the insurer shall notify the rating bureau of the correct information not later than the 30th day after the date on which the written notice is received by the insurer.

(f) The completion date under Subsection (b), (c), or (e) must be extended by one day for each day the contractor who is the subject of the report delays completion of any 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 the audit is to be conducted. [Sections 151.067-151.100 reserved for expansion] SUBCHAPTER C. COVERAGE LIMITS

Sec. 151.101. GENERAL REQUIREMENTS. Subject to Section 151.059, aggregate and per-occurrence limits of all insurance coverages under a consolidated insurance program apply to all contractors under the program for the term of each construction project covered by the program.

Sec. 151.102. PER-OCCURANCE LIMITS. (a) For a residential construction project, the per-occurrence 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 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 limit must be not less than $100 million.

Sec. 151.103. ANNUAL REINSTATEMENT OF LIABILITY LIMITS. The consolidated insurance program must reinstate annually the liability limits for each policy or contract subject to the program or be replaced by other policies or contracts that provide equivalent coverage and limits. This section does not apply to completed operations coverage on completion of the construction project.

Sec. 151.104. NOTICE REGARDING REDUCTION IN MONETARY LIMIT. (a) The insurer shall notify all contractors in writing not later than the 10th day after the date the total monetary limit of liability coverage for any type of 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 monetary limit under Subsection (a) shall be computed based on incurred losses and expenses.

(c) The notice under Subsection (a) must describe:

(1) the initial monetary limit of liability coverage; and

(2) the monetary limit of liability coverage that remains as of the notice date.

(d) For limits on coverages that have been extended by other policies, the notice under Subsection (a) is required only if the combined monetary limit of all policies providing the coverage has been reached.

(e) The monetary 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. Each disclosure made under Section 151.151 must include:

(1) the scope of coverage and limits for each insurance policy or contract under the consolidated insurance program, including an accurate specimen copy of full and complete declarations, policy conditions, limitations, coverages, and endorsements;

(2) the scope of coverage and limits for each policy or contract of excess insurance covering the consolidated insurance program, including a statement that the excess policy or contract will follow form as to the primary policy or contract with any material exceptions listed; and

(3) a complete description of the safety program required by Subchapter E.

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) A contractor who submits a price proposal for work on a construction project under a consolidated insurance program is entitled to written notification from the principal or contractor of any material change in the consolidated insurance program not later than the 10th day before the date on which the contractor executes the contract for work on the construction project.

(c) After receipt of notice of any adverse material change under Subsection (b), 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.

(d) Not later than the seventh 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 must make a written disclosure to the contractor that contains detailed information concerning the consolidated insurance program.

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, address, and telephone number of the insurance producer, if any, acting as agent for the insurer;

(3) the name of the primary contact person of the insurance producer for the consolidated insurance program;

(4) the name, primary contact name, street address, city, state, and zip code of the administrator of the consolidated insurance program;

(5) 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;

(6) the number, frequency, and subject matter of any audits of the contractor required by the insurer, administrator, or principal; and

(7) a detailed description of any differences in the items disclosed under Section 151.152 and the actual scope and limits of coverage for the consolidated insurance program, including any deviations from the specimen copy provided.

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; and

(3) a method to incorporate any scheduled credits, premium discounts, or other items of credit or discount that apply specifically to the contractor.

(c) A principal may not require an insurance credit of a contractor for coverage provided under the consolidated insurance program that is of the same type as flat rate coverages maintained by the contractor.

Sec. 151.156. CONTRACT AWARD; BASIS. (a) The disclosure required under Section 151.151 must include a specific explanation of how any premium overruns or underruns will be applied and whether the contract award will be made on the basis that:

(1) excludes the cost of insurance coverage; or

(2) includes the cost of insurance coverage.

(b) A contractor awarding a contract to another contractor must use the basis described under Subsection (a) for any contractor insured under the consolidated insurance program. [Sections 151.157-151.200 reserved for expansion] SUBCHAPTER E. SAFETY PROGRAM AND INJURED WORKERS

Sec. 151.201. APPLICABILITY. This subchapter applies only if workers' compensation insurance coverage is a coverage provided by the consolidated insurance program.

Sec. 151.202. SAFETY PROGRAM REQUIRED. (a) A principal shall adopt a comprehensive safety program designed to reduce the frequency and severity of worker injuries. The principal shall require participation in the safety program by all persons working on the construction project.

(b) The safety program must include a program for detection of drug use and other substance abuse.

(c) A qualified third-party safety company may administer and operate a safety program required under this section.

Sec. 151.203. SAFETY PROFESSIONALS. (a) The principal, directly or through the principal's contract with a contractor, shall maintain a level of safety staffing and safety policies commensurate with the expected and actual hazards of the construction project.

(b) A safety program conducted under this subchapter must have at least one qualified safety professional assigned to the construction project for primary safety responsibility. If the construction project value exceeds $25 million:

(1) a safety professional must work not less than 40 hours weekly at the work site of the construction project; and

(2) work may not take place at the work site without at least one qualified safety professional at the work site.

(c) Except as provided by Subsection (d), to be qualified to serve as a safety professional under Subsection (b), a person must have demonstrable knowledge of 29 U.S.C. Chapter 15, and related regulations adopted by the federal Occupational Safety and Health Administration, and at least:

(1) 10 years of primary safety responsibility experience in the construction industry; or

(2) five years of primary safety responsibility experience in the construction industry and:

(A) hold a bachelor of science degree conferred by an accredited institution of higher education, with a major in safety engineering, industrial hygiene, or a related field;

(B) hold an associate's degree conferred by an accredited institution of higher education, with a major in safety engineering, industrial hygiene, or a related field; or

(C) hold a current certification as a certified safety professional issued by an entity recognized by the commissioner.

(d) To be qualified to serve as a safety professional under Subsection (b) for a nonresidential construction project that is solely for the maintenance or remodeling of an existing industrial plant facility that maintains an ongoing consolidated insurance program in its regular course of business for that maintenance or remodeling work at the industrial plant facility, a person must have demonstrable knowledge of 29 U.S.C. Chapter 15, and related regulations adopted by the federal Occupational Safety and Health Administration, and at least:

(1) 10 years of primary safety responsibility experience in an industrial plant facility; or

(2) five years of primary safety responsibility experience in an industrial plant facility and:

(A) hold a bachelor of science degree conferred by an accredited institution of higher education, with a major in safety engineering, industrial hygiene, or a related field; or

(B) hold an associate's degree conferred by an accredited institution of higher education, with a major in safety engineering, industrial hygiene, or a related field; or

(C) hold a current certification as a certified safety professional issued by an entity recognized by the commissioner.

Sec. 151.204. LIGHT DUTY FOR CERTAIN INJURED EMPLOYEES. The disclosure required under Section 151.151 must fully describe any light duty return-to-work program required for a contractor's injured employees. A return-to-work program must set forth a reasonable length of time any required light-duty program would be in place for any injured employee. The reasonable time period for light-duty work may vary due to the type of injury.

Sec. 151.205. LIGHT DUTY STANDARDS. The consolidated insurance program may require the employer of an injured employee to provide alternative duty for an injured employee if:

(1) the work status report, or similar report, of the department's division of workers' compensation completed by the injured employee's examining doctor specifies the injured employee's physical restrictions or limitations;

(2) the examining doctor recommends that the injured employee return to work on a limited basis in compliance with the doctor's restrictions or limitations;

(3) the alternate duty position is reasonably available and the activity provides a benefit for the employer; and

(4) the cost to the contractor for any modifications to the workplace necessary in facilitating the injured employee's return to work based on restrictions or limitations identified by the examining doctor is reasonable. [Sections 151.206-151.250 reserved for expansion] SUBCHAPTER F. PROGRAM ADMINISTRATION

Sec. 151.251. ADMINISTRATOR. (a) Each principal shall appoint a qualified administrator for the consolidated insurance program whose only duty is administration of the program.

(b) To be eligible to serve as the administrator, a person must:

(1) hold a risk manager license under Chapter 4153, a general property and casualty agent license under Chapter 4051, or another license as an insurance professional that is:

(A) recognized as appropriate by the commissioner; and

(B) issued under Title 13; and

(2) have been licensed under this code for at least the five years preceding the date of the appointment as administrator.

(c) Subsection (b) does not apply to a person that provides assistance to the administrator for support duties such as clerical or bookkeeping services.

Sec. 151.252. POWERS AND DUTIES OF ADMINISTRATOR. (a) For purposes of this chapter, each contractor covered under the consolidated insurance program is considered a client of the administrator. 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 immediate coverage.

(c) The administrator shall:

(1) maintain a current consolidated insurance program manual that contains a detailed description of the consolidated insurance program; and

(2) provide all contractors with a current copy of the manual:

(A) on the date of the contractor's enrollment in the program; and

(B) not later than the seventh day after any updates are made to the manual.

(d) The administrator shall issue a certificate of insurance on behalf of a contractor to represent 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 or contracts, the administrator shall ensure that each contractor receives insurance policies or contracts, or renewal certificates for previously issued policies or contracts, 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 maintain an organized paper and electronic file system that is available for immediate access.

(h) The administrator shall establish and disseminate to contractors:

(1) clear procedures for proper filing of claims; and

(2) required loss-control procedures.

(i) 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.

(j) The administrator shall monitor the financial standing of the insurer as provided by Section 151.060 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.

(k) The administrator shall prepare and present to the principal on at least a monthly basis any required payroll reports, claim reviews, and loss-control reviews.

(l) The administrator shall provide oversight and management of claims for the principal and any affected contractor until all claims are closed.

Sec. 151.253. CONTRACTOR AS BENEFICIARY. For purposes of this chapter and insurance benefits under the consolidated insurance program, each contractor is considered a beneficiary of the administrator, and the administrator owes a fiduciary duty to each contractor that participates in the program.

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.