Proposed Action on Rules
EXEMPT FILING NOTIFICATION PURSUANT TO THE INSURANCE CODE, CHAPTER 5, SUBCHAPTER
L, ARTICLE 5.96
The Commissioner of Insurance will consider amendments proposed by the
staff of the Workers' Compensation Classification, Premium Calculation and
Research Division of the Property and Casualty Insurance Program at the Texas
Department of Insurance (Department) to the Texas Basic Manual of Rules, Classifications
and Experience Rating Plan for Workers' Compensation and Employers' Liability
Insurance (Manual). The purpose of these amendments to Manual Rule V (Premium
Basis) and Rule IX (Special Conditions or Operations Affecting Coverage and
Premium) is to clarify that for workers' compensation premium calculation
purposes "partners" includes general partners and limited partners.
Staff's petition (Ref. No. W-0206-02-I) was filed on February 14, 2006.
A public hearing on this matter will not be held unless a separate request
for a hearing is submitted to the Office of the Chief Clerk during the comment
period as specified herein.
The proposed amendments to the Manual are filed pursuant to Texas Insurance
Code Article 5.96, which authorizes the Commissioner to prescribe, promulgate,
adopt, approve, amend or repeal standard and uniform manual rules, rating
plans, classifications plans, statistical plans and policy and endorsement
forms for workers' compensation insurance.
The Department staff has proposed amendments to the Manual as follows:
1. Amend Rule V F.3.b., relating to Miscellaneous Values - Payroll Limitation,
to include clarifying language indicating that for the purposes of this rule
"partners" includes general partners and limited partners.
2. Amend Rule IX B., relating to Partners and Sole Proprietors, to include
clarifying language indicating that for the purposes of this rule and the
endorsements used to implement this rule "partners" includes general partners
and limited partners.
Texas Labor Code §406.097(a) provides that "A sole proprietor, partner,
or corporate executive officer of a business entity that elects to provide
workers' compensation insurance coverage is entitled to benefits under that
coverage as an employee unless the sole proprietor, partner, or corporate
executive officer is specifically excluded from coverage through an endorsement
to the insurance policy." The statute does not make a distinction between
types of partnerships or between general partners and limited partners. The
proposed amendments state that for purposes of Manual Rule V and Rule IX "partner"
includes general partners and limited partners. These amendments are needed
to clarify that general partners and limited partners are entitled to be covered
under a workers' compensation policy and that general partners and limited
partners can be excluded from coverage under a workers' compensation policy
if the policy is endorsed accordingly. If general partners and/or limited
partners are covered under the workers' compensation policy, then the basis
of premium for each partner covered is calculated in accordance with Rule
V F.3.b. of the Manual.
The staff requests that the proposed amendments to the Texas Basic Manual
of Rules, Classifications and Experience Rating Plan for Workers' Compensation
and Employers' Liability Insurance be adopted effective 15 days after notice
of adoption is published in the
Texas Register.
The Commissioner has jurisdiction over this matter pursuant to the Insurance
Code Article 5.96.
A copy of the full text of the proposed amendments is available for review
in the Office of the Chief Clerk of the Texas Department of Insurance, 333
Guadalupe Street, Austin, Texas 78714-9104. For further information or to
request copies of the amendments, please contact Sylvia Gutierrez at (512)
463-6327 (refer to Ref. No. W-0206-02-I).
Written comments to these proposed amendments may be submitted no later
than 5:00 p.m. on March 27, 2006 to Gene Jarmon, General Counsel and Chief
Clerk, Texas Department of Insurance, P.O. Box 149104, MC 113-2A, Austin,
Texas 78714-9104. An additional copy of the comments must be submitted to
Nancy Moore, Deputy Commissioner, WC Classification, Premium Calculation and
Research Division, Texas Department of Insurance, P.O. Box 149104, MC 105-2A,
Austin, Texas 78714-9104.
This notification is made pursuant to the Insurance Code Article 5.96,
which exempts it from the requirements of the Government Code, Chapter 2001
(Administrative Procedure Act).
TRD-200600813
Gene C. Jarmon
General Counsel and Chief Clerk
Texas Department of Insurance
Filed: February 15, 2006