Texas Workers Compensation Act
Title 5 - Texas Labor Code - Chapters 401-506
TABLE OF CONTENTS
LABOR CODE
CHAPTER 406A. GROUP PURCHASE OF WORKERS' COMPENSATION INSURANCE
COVERAGE
§ 406A.001. DEFINITIONS.
Text of section effective April 1, 2007
In this chapter:
(1) "Business entity" means a business enterprise
owned by a single person or a corporation, organization, business
trust, trust, partnership, joint venture, association, or other
business entity.
(2) "Commissioner" means the commissioner of
insurance.
(3) "Department" means the Texas Department of
Insurance.
Added by Acts 2005, 79th Leg., ch. 727, § 17, eff. April 1, 2007.
§ 406A.002. CERTIFICATION PROGRAM.
Text of section effective April 1, 2007
(a) The department shall:
(1) maintain a certification program for groups
organized under this chapter; and
(2) issue certificates of approval to eligible
business entities authorizing formation and maintenance of a group.
(b) The commissioner by rule shall adopt forms, criteria,
and procedures for issuing certificates of approval to groups under
this chapter.
Added by Acts 2005, 79th Leg., ch. 727, § 17, eff. April 1, 2007.
§ 406A.003. FORMATION OF GROUP.
Text of section effective April 1, 2007
(a) On receipt of a certificate of approval issued by the
department under this chapter, two or more business entities or two
or more members of a trade association may join together to form a
group to purchase individual workers' compensation insurance
policies covering each member of the group.
(b) To be eligible to join a group, a business entity must:
(1) be engaged in a business pursuit that is the same
as or similar to the other business entities participating in the
group as determined by the department; or
(2) be a member of the same trade association as the
other business entities participating in the group.
Added by Acts 2005, 79th Leg., ch. 727, § 17, eff. April 1, 2007.
§ 406A.004. PLAN OF OPERATION.
Text of section effective April 1, 2007
(a) A group shall:
(1) adopt a plan of operation; and
(2) file a copy of the plan of operation with the
department.
(b) The plan of operation must include:
(1) provisions governing the composition and
selection of a governing board;
(2) the methods for administering the group; and
(3) guidelines governing the workers' compensation
insurance coverage obtained by the group that include provisions
governing:
(A) the payment of premiums;
(B) the distribution of discounts; and
(C) the methods for providing risk management.
Added by Acts 2005, 79th Leg., ch. 727, § 17, eff. April 1, 2007.
§ 406A.005. GROUP PURCHASE AUTHORIZED.
Text of section effective April 1, 2007
A group certified under this chapter may purchase individual
workers' compensation insurance policies covering each member of
the group from any insurer authorized to write workers'
compensation insurance in this state.
Added by Acts 2005, 79th Leg., ch. 727, § 17, eff. April 1, 2007.
§ 406A.006. POLICY RATES.
Text of section effective April 1, 2007
Rates for policies purchased under this chapter must be
computed using manual rules and rates. The department shall
determine any experience rating factor that must be applied to
those policies as provided by the commissioner by rule.
Added by Acts 2005, 79th Leg., ch. 727, § 17, eff. April 1, 2007.
§ 406A.007. GROUP DISCOUNT.
Text of section effective April 1, 2007
(a) A group that purchases a policy under this chapter is
entitled to any premium or volume discount that would be applicable
to a policy of the combined premium amount.
(b) A group shall apportion any discount or policyholder
dividend received on workers' compensation insurance coverage
among the members of the group according to a formula adopted in the
plan of operation for the group.
Added by Acts 2005, 79th Leg., ch. 727, § 17, eff. April 1, 2007.
§ 406A.008. APPLICABILITY OF OTHER LAW.
Text of section effective April 1, 2007
(a) A group established under this chapter is entitled to
any deviation applicable under Section 2052.004, 2053.051, or
2053.052(a) or (b), Insurance Code.
(b) A member of a group is not subject to the discounts and
surcharges established under Subchapter F, Chapter 2053, Insurance
Code.
Added by Acts 2005, 79th Leg., ch. 727, § 17, eff. April 1, 2007.
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