|
|
|
A BILL TO BE ENTITLED
|
|
AN ACT
|
|
relating to the residual market for workers' compensation insurance |
|
in this state and to the operation, governance, and organization of |
|
the Texas Mutual Insurance Company. |
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
ARTICLE 1. RESIDUAL MARKET FOR WORKERS' COMPENSATION INSURANCE |
|
SECTION 1.01. WORKERS' COMPENSATION ASSIGNED RISK PROGRAM. |
|
Subtitle E, Title 10, Insurance Code, is amended by adding Chapter |
|
2056 to read as follows: |
|
CHAPTER 2056. WORKERS' COMPENSATION ASSIGNED RISK PROGRAM |
|
Sec. 2056.001. DEFINITIONS. In this chapter: |
|
(1) "Assigned risk program" means the program |
|
established under Section 2056.002 by which insurers provide |
|
workers' compensation insurance to residual market employers. |
|
(2) "Insurer" means an insurance company as defined by |
|
Section 2053.001. |
|
(3) "Residual market employer" means an employer that |
|
is unable to obtain workers' compensation insurance through the |
|
voluntary insurance market in this state. |
|
Sec. 2056.002. ASSIGNED RISK PROGRAM; PLAN OF OPERATION. |
|
(a) The commissioner by rule shall: |
|
(1) establish an assigned risk program through which |
|
residual market employers may obtain workers' compensation |
|
insurance in this state; and |
|
(2) approve a plan of operation for the assigned risk |
|
program established under this section, which must: |
|
(A) specify the eligibility criteria and |
|
procedures for obtaining insurance through the assigned risk |
|
program; and |
|
(B) provide for the implementation and |
|
administration of the assigned risk program, including reasonable |
|
service standards, policies, forms, and contracts. |
|
(b) The commissioner may contract with a licensed |
|
statistical agent for workers' compensation in this state to |
|
administer the assigned risk program. |
|
(c) The commissioner shall require each insurer to |
|
participate in the assigned risk program in proportion to the |
|
insurer's voluntary market share in this state as a condition of the |
|
insurer's authority to engage in the business of insurance in this |
|
state. |
|
(d) The commissioner may provide for an insurer to meet the |
|
insurer's obligation under this section through direct policy |
|
assignment, reinsurance, pooling, or otherwise. |
|
Sec. 2056.003. RATES AND FUNDING. (a) The statistical |
|
agent, if any, contracted to administer the assigned risk program |
|
under Section 2056.002 shall file rates for review under Subchapter |
|
B, Chapter 2053. |
|
(b) Rates for insurance procured through the assigned risk |
|
program must be actuarially sufficient to cover all incurred losses |
|
and administrative expenses of the program. |
|
ARTICLE 2. OPERATION AND ORGANIZATION OF TEXAS |
|
MUTUAL INSURANCE COMPANY |
|
SECTION 2.01. ARTICLES OF INCORPORATION. (a) Not later |
|
than January 1, 2015, the board of directors of the Texas Mutual |
|
Insurance Company shall file with the commissioner of insurance |
|
articles of incorporation, which must state: |
|
(1) the name of the company; |
|
(2) the purpose of the company; |
|
(3) the location of the company's principal or home |
|
office; and |
|
(4) the name and address of each member of the board of |
|
directors. |
|
(b) Notwithstanding any other law, the articles of |
|
incorporation filed under this Act shall be considered restated |
|
articles of incorporation. |
|
SECTION 2.02. BOARD OF DIRECTORS. (a) Not later than |
|
December 31, 2014, the Texas Mutual Insurance Company shall hold a |
|
meeting of its policyholders to elect a board of directors to govern |
|
the company beginning January 1, 2015. |
|
(b) The board of directors established under Section |
|
2054.051, Insurance Code, is abolished effective January 1, 2015. |
|
SECTION 2.03. CONTINUATION OF CORPORATE EXISTENCE. (a) The |
|
corporate existence of the Texas Mutual Insurance Company |
|
continues, and all assets, liabilities, earned surplus, rights, |
|
licenses, and permits of the company as it existed under Chapter |
|
2054, Insurance Code, before January 1, 2015, remain in full force |
|
and effect as the assets, liabilities, earned surplus, rights, |
|
licenses, and permits of the company. |
|
(b) All policies of insurance and other contracts entered |
|
into or issued by the Texas Mutual Insurance Company before January |
|
1, 2015, remain in full force and effect in accordance with their |
|
respective terms. |
|
(c) The certificate of authority issued to the Texas Mutual |
|
Insurance Company as the company existed under Chapter 2054, |
|
Insurance Code, before January 1, 2015, continues in effect. |
|
(d) Effective January 1, 2015, the Texas Mutual Insurance |
|
Company operates under Chapter 883, Insurance Code, and is neither |
|
subject to obligations or limitations not imposed on, nor given |
|
advantages not granted to, other mutual insurance companies |
|
operating under Chapter 883, Insurance Code. |
|
ARTICLE 3. CONFORMING AMENDMENTS |
|
SECTION 3.01. REPEALER. The following laws are repealed: |
|
(1) Section 552.0225(c), Government Code; |
|
(2) Section 552.143(f), Government Code; |
|
(3) Section 462.008, Insurance Code; |
|
(4) Section 2051.153(b), Insurance Code; and |
|
(5) Chapter 2054, Insurance Code. |
|
SECTION 3.02. CONFORMING AMENDMENT TO LABOR CODE. Section |
|
418.002(c), Labor Code, is amended to read as follows: |
|
(c) The court may order a person to pay restitution to an |
|
insurance company[, including the Texas Mutual Insurance Company,] |
|
if the person commits an offense under this section. |
|
SECTION 3.03. CONFORMING AMENDMENTS TO INSURANCE CODE. (a) |
|
Section 2052.004(a), Insurance Code, is amended to read as follows: |
|
(a) Subject to Subsections (b) and (c), this subtitle may |
|
not be construed to prohibit an insurance company[, including the
|
|
Texas Mutual Insurance Company,] from issuing participating |
|
policies. |
|
(b) Section 2053.001(2), Insurance Code, is amended to read |
|
as follows: |
|
(2) "Insurance company" means a person authorized to |
|
engage in the business of workers' compensation insurance in this |
|
state. The term includes: |
|
(A) [the Texas Mutual Insurance Company;
|
|
[(B)] a Lloyd's plan under Chapter 941; and |
|
(B) [(C)] a reciprocal and interinsurance |
|
exchange under Chapter 942. |
|
(c) Section 2053.154(a), Insurance Code, is amended to read |
|
as follows: |
|
(a) For purposes of this section, "insurance company" means |
|
a stock company, mutual insurance company, reciprocal or |
|
interinsurance exchange, or Lloyd's plan authorized to engage in |
|
the business of workers' compensation insurance in this state. |
|
[The term includes the Texas Mutual Insurance Company.] |
|
SECTION 3.04. EFFECTIVE DATE OF ARTICLE. This article |
|
takes effect January 1, 2015. |
|
ARTICLE 4. TRANSITION |
|
SECTION 4.01. TRANSITION. (a) As soon as practicable after |
|
the effective date of this Act, but not later than January 1, 2015, |
|
the commissioner of insurance shall adopt rules necessary to |
|
implement the assigned risk program required by Chapter 2056, |
|
Insurance Code, as added by this Act. |
|
(b) As soon as practicable after the Texas Mutual Insurance |
|
Company files articles of incorporation with the commissioner of |
|
insurance and elects a board of directors as required by Article 2 |
|
of this Act, the commissioner shall adopt any rules necessary to |
|
reflect the fact that the Texas Mutual Insurance Company is a mutual |
|
insurance company organized under and governed by Chapter 883, |
|
Insurance Code, and other laws applicable to mutual insurance |
|
companies in this state. |
|
ARTICLE 5. EFFECTIVE DATE |
|
SECTION 5.01. EFFECTIVE DATE OF ACT. Except as otherwise |
|
provided by this Act, this Act takes effect September 1, 2013. |