(a) Each applicant shall provide security for incurred liabilities for compensation through a deposit with the division, in a combination and from institutions approved by the commissioner, of the following security:
(1) cash or negotiable securities of the United States or of this state;
(2) a surety bond that names the commissioner as payee; or
(3) an irrevocable letter of credit that names the commissioner as payee.
(b) If an applicant who has provided a letter of credit as all or part of the security required under this section desires to cancel the existing letter of credit and substitute a different letter of credit or another form of security, the applicant shall notify the division in writing not later than the 60th day before the effective date of the cancellation of the original letter of credit.
(c) An estimate of the applicant’s incurred liabilities for compensation must be signed and sworn to by an accredited casualty actuary and submitted with the application.
(d) The sum of the deposited securities must be at least equal to the greater of:
(1) $300,000; or
(2) 125 percent of the applicant’s incurred liabilities for compensation.
(e) If an applicant is granted a certificate of authority to self-insure, any interest or other income that accrues from cash or negotiable securities deposited by the applicant as security under this section while the cash or securities are on deposit with the division shall be paid to the applicant quarterly.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993.
Acts 2005, 79th Leg., Ch. 265 (H.B. 7), § 3.053, eff. September 1, 2005.