(a) An association of employers that proposes to organize as a workers’ compensation self-insurance group shall file with the department an application for a certificate of approval.
(b) The application must be in the form prescribed by the commissioner and must include:
(1) the name of the group;
(2) the location of the group’s principal office;
(3) the date of organization of the group;
(4) the name and address of each employer that is a member of the group;
(5) the name, mailing address, and telephone number of the trade or professional association to which each group member belongs as required by Section 407A.002(a)(2);
(6) the governing classification code of the group or a description of the operations of each member of the group showing that the members of the group are engaged in similar operations; and
(7) any other information reasonably required by the commissioner.
(c) The application must be accompanied by:
(1) a nonrefundable $1,000 filing fee;
(2) proof of compliance with the financial requirements under Section 407A.053;
(3) proof of compliance with the excess insurance requirements under Section 407A.054;
(4) a copy of the articles of association or declaration of trust of the group, if any;
(5) a copy of any agreements entered into with an administrator or a service company;
(6) a copy of the bylaws of the proposed group;
(7) a copy of the agreement between the group and each employer who is a member of the group that:
(A) secures the payment of workers’ compensation benefits; and
(B) includes provisions for payment of assessments as provided by Section 407A.355;
(8) designation of the initial board of trustees and administrator of the group;
(9) the address in this state where the books and records of the group will be maintained at all times;
(10) a pro forma financial statement, in a form acceptable to the commissioner, that shows the financial ability of the group to pay the workers’ compensation obligations of the employers who are members of the group;
(11) proof of one of the following:
(A) payment to the group, or a bona fide promise to pay on approval of the group, by each employer who is a member of the group of not less than 25 percent of that member’s first year estimated modified schedule rating premium on a date prescribed by the commissioner, which shall be considered part of the first year premium payment of each member; or
(B) if the group is formed from a trust existing on September 1, 2003, that the assets of the trust are sufficient to cover the workers’ compensation obligations of the trust;
(12) a $250,000 fidelity bond for the administrator in the form prescribed by the commissioner;
(13) a $250,000 fidelity bond for the service company in the form prescribed by the commissioner; and
(14) an indemnity agreement that meets the requirements of Section 407A.056.
(d) Not later than the 30th day after the effective date of the change, a group shall notify the commissioner of any change in:
(1) the information required to be filed under Subsection (c); or
(2) the manner of the group’s compliance with Subsection (c).
(e) The commissioner shall evaluate the financial information provided with the application as necessary to ensure that:
(1) the funding is sufficient to cover expected losses and expenses; and
(2) the funds necessary to pay workers’ compensation benefits will be available on a timely basis.
(f) Except as otherwise provided by this subsection, the commissioner shall act on a complete application for a certificate of approval not later than the 90th day after the date on which the application is filed with the department. If, because of the number of applications, the commissioner is unable to act on an application in a timely manner, the commissioner may extend the period for an additional 30 days.
(g) Fees collected under this section shall be deposited in the department’s operating account.
(h) In lieu of the bonds required under Subsections (c)(12) and (c)(13), a security deposit of cash or securities acceptable to the commissioner may be deposited with the commissioner to be held in the state treasury.
Added by Added by Acts 2003, 78th Leg., ch. 275, § 1, eff. Sept. 1, 2003.
Acts 2005, 79th Leg., Ch. 1055 (H.B. 1353), § 2, eff. September 1, 2005.