28 TAC §181.1
The Texas Certified Self-Insurer Guaranty Association (Association)
proposes amendments to §181.1, concerning the Bylaws of the Association.
These amendments are necessary to implement changes to Chapter 407 of the
Texas Labor Code enacted by House Bill 7 (HB 7), passed by the 79th Texas
Legislature, effective on September 1, 2005. This legislation abolished the
Texas Workers' Compensation Commission (TWCC) and transferred its duties to
the Texas Department of Insurance, Division of Workers' Compensation (DWC).
In addition to agency organizational changes, HB 7 changed the composition
of the Association's Board of Directors by deleting the two members of the
TWCC Commission and adding one member designated by the DWC Commissioner.
The reduction in the number of Board members necessitated a corresponding
change in the number of votes needed for a quorum.
The proposed amendments reflect the organizational changes to the agency
and to the Association's Board of Directors. Other changes are proposed to
remove outdated references, deadlines, and procedures.
Judy Roach, Executive Director of the Association, has determined that
for the first five year period the amendments as proposed are in effect, there
will be no fiscal implications to state and local governments as a result
of enforcing or administering the amendments.
Ms. Roach also has determined that for each year of the first five year
period the amendments as proposed are in effect, the public benefits expected
as a result of adoption of the amendments will be the implementation of changes
enacted by HB 7. There are no anticipated additional economic costs to small
businesses, micro-businesses, or persons who are required to comply with the
amendments as proposed.
Comments on the proposed amendments may be submitted to Judy Roach, Executive
Director, Texas Self-Insurer Guaranty Association, 1115 San Jacinto Boulevard,
Suite 275, Austin, Texas 78701. Comments must be received by July 3, 2006.
The amendments are proposed under the Texas Labor Code, Chapter
407, Subchapter G, §407.123, which authorizes the Board of Directors
of the Association, subject to approval of the DWC Commissioner, to adopt
rules necessary to operate the Association.
The following code is affected by this proposal: The Labor Code, Chapter
407, Subchapter G, §407.123.
§181.1.Bylaws of the Texas Certified Self-Insurer Guaranty Association.
(a)
The membership of the Texas Certified Self-Insurer Guaranty
Association (the Association) shall consist of all certified self-insurers
(members) that hold a certificate of authority to self-insure issued by the
Commissioner of Workers' Compensation of the Texas Department of Insurance,
Division of Workers' Compensation (the Commissioner)
[
Texas Workers'
Compensation Commission (the Commission)
]. Only certified self-insurers
may be members of the Association.
(1) - (5)
(No change.)
(b)
The business of the Association shall be managed by the
Board of Directors (the Board).
(1)
The Board shall consist of three members of the Association,
one member designated by the Commissioner
[
one member of the Commission
representing wage earners, one member of the Commission representing employers
], and the Public Insurance Counsel. [
The Executive Director of
the Commission and the Director of the Commission's Division of Self-Insurance
Regulation shall serve as non-voting members
]. The members of the Board
shall hereinafter be referred to as Directors. Each Director representing
members of the Association must be a current employee of a member of the Association.
(2)
A quorum of the board is
three
[
four
]
voting
directors
[
members
]. No business may be conducted
by the board unless a quorum of its members is present at the meeting. An
action by the board requires the concurring vote of
three directors
[
four members
]. A motion to recommend an application for certification
that fails to receive the concurring vote of
three directors
[
four board members
] constitutes disapproval of the application. [
Within 40 days of receiving an application for self-insurance, the board shall
advise the director of the Division of Self-Insurance Regulation of the status
of the application. This constitutes a response for purposes of commission §114.7
of this title (relating to Certification Process) and shall not be deemed
approval of the application by the board.
]
(3)
(No change.)
(4)
The board shall meet at least once during each calendar
quarter. Additional meetings may be held as necessary to conduct the business
of the association. Meetings shall be held at the call of the chair or upon
written request to the chair by any
three directors
[
four
members
] of the board.
(5)
The board shall have the authority to hire an executive
director to conduct the day-to-day operations of the association. The board
may also authorize the hiring of additional staff as necessary. The executive
director serves at the pleasure of the board. The employment or removal of
an executive director requires the affirmative vote of at least
three
[
four
] members of the board. The salaries of the executive
director and staff shall be set by the board and be commensurate with the
salaries paid by state agencies.
(6) - (8)
(No change.)
(c)
(No change.)
(d)
The Board shall levy assessments against each member necessary
to create and maintain the Texas Certified Self-Insurer Guaranty Trust Fund
(the Trust Fund). Assessments shall be levied in amounts that will provide
at least $1 million, but not more that $2 million[
, by January 1, 2003
]. For purposes of assessments, "payments" means all income benefits
paid in the preceding reported calendar year pursuant to obligations as a
certified self-insurer, or in the case of a first-year member of the Association,
made by the member's carrier on behalf of the member, pursuant to the Texas
Workers' Compensation Act. All earned income of the trust fund is retained
by the trust fund and may be used by the Board of Directors as provided in
subsection (f)(1) of these Bylaws.
(1) - (2)
(No change.)
(3)
When all liabilities of an impaired certified self-insurer
(or former self-insurer) have been paid, and the trust fund has been reimbursed,
excess funds may be held in lieu of or in reduction of an Administrative Fee,
paid to the
Division of Workers' Compensation
[
Texas Workers'
Compensation Commission
] in lieu of or in reduction of a regulatory
fee, used by the Board to pay administrative expenses of the Association,
or otherwise used for the benefit of the members of the Association.
(4)
The Board of Directors shall have the authority to collect
from the impaired certified self-insurer (or former self- insurer) any amount
that has been assessed against other self-insurers to pay the liabilities
of the impaired certified self-insurer (or former self-insurer). The board
may use any appropriate means for collection of the assessment up to and including
filing suit against the impaired member or former member. Continued failure
to pay the assessment may result in a recommendation to the
Commissioner
[
commission
] that the member's certificate of self-insurance
be revoked.
(5)
If the Trust Fund is terminated for any reason, the funds
then held in the Trust Fund shall be paid to the
Division of Workers'
Compensation
[
Texas Workers' Compensation Commission
] to
be used for the administration of the Workers' Compensation Act.
(e)
The association shall mail notice of any assessment to
the designated representative of each member or former member of the association.
Each member or former member shall pay all assessments not later than 30 days
after it is notified of the assessment. Late payments shall accrue interest
at the rate of 1.5% per month on any unpaid balance. The board may use any
appropriate means for collection of the assessment up to and including filing
suit against the member or former member and continued failure to pay the
assessment may result in a recommendation to the
Commissioner
[
commission
] that the member's certificate of self-insurance be revoked.
(f)
The board of directors shall approve a budget for the operating
expenses for the succeeding year not later than December 31 of each year.
(1)
Income earned from the investment of the trust fund shall
be used for expenses of administration of the
association and of the
trust fund [
in accordance with the Texas Property Code, §113.111(a)
].
(2)
(No change.)
(g)
If the
Commissioner
[
commission
]
declares that a certified self-insurer (or former self-insurer) is impaired
and determines that the payment of benefits and claims administration shall
be made through the association, the board shall provide for the administration
and payment of claims on behalf of the impaired certified self-insurer (or
former self-insurer) in accordance with the Texas Workers' Compensation Act.
The board shall provide for the creation of a separate account for the administration
of each impaired certified self-insurer (or former self-insurer) and for the
payment from the trust fund to the separate account if the
Commissioner
[
director of self-insurance
] advises the board that additional
funds are needed to supplement the security deposit.
(h)
(No change.)
(i)
The board shall adopt and amend rules, including these
bylaws, in accordance with the Administrative Procedure Act, Government Code,
Chapter 2001. After proposing, publishing, and receiving comments on rules,
the board shall meet and vote on a final version. Adoption of rules must be
made contingent on approval by the
Commissioner
[
commission
] and ratification by the association. The rules so adopted shall be
sent to the
Commissioner
[
commission
]. Upon approval
by the
Commissioner
[
commission
], and ratification by
the association, the rules shall be filed with the Texas Register and shall
become effective in accord with the provisions of the Administrative Procedure
Act. Failure to obtain ratification by the members will result in the board
reconsidering the rule and voting on a revised version.
(1) - (2)
(No change.)
(j) - (l)
(No change.)
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on May 18, 2006.
TRD-200602807
Judy Roach
Executive Director
Texas Certified Self-Insurer Guaranty Association
Earliest possible date of adoption: July 2, 2006
For further information, please call: (512) 322-0514