CHAPTER 2053. RATES FOR WORKERS' COMPENSATION INSURANCE
INSURANCE CODE
TITLE 10. PROPERTY AND CASUALTY INSURANCE
SUBTITLE E. WORKERS' COMPENSATION INSURANCE
CHAPTER 2053. RATES FOR WORKERS' COMPENSATION INSURANCE
SUBCHAPTER A. RATE FILINGS
Sec. 2053.001. DEFINITIONS. In this subchapter:
(1) "Filer" means an insurance company that files rates,
prospective loss costs, or supplementary rating information under
this subchapter.
(2) "Insurance company" means a person authorized to engage in
the business of workers' compensation insurance in this state.
The term includes:
(A) the Texas Mutual Insurance Company;
(B) a Lloyd's plan under Chapter 941; and
(C) a reciprocal and interinsurance exchange under Chapter 942.
(2-a) "Premium" means the amount charged for a workers'
compensation insurance policy, including any endorsements, after
the application of individual risk variations based on loss or
expense considerations.
(3) "Prospective loss cost" means that portion of a rate that:
(A) does not include a provision for expenses or profit, other
than loss adjustment expenses; and
(B) is based on historical aggregate losses and loss adjustment
expenses projected by development to the ultimate value of those
losses and expenses and projected through trending to a future
point in time.
(4) "Rate" means the cost of workers' compensation insurance per
exposure unit, whether expressed as a single number or as a
prospective loss cost, adjusted to account for the treatment of
expenses, profit, and individual insurance company variation in
loss experience, before applying individual risk variations based
on loss or expense considerations. The term does not include a
minimum premium.
(5) "Supplementary rating information" means any manual, rating
plan or schedule, plan of rules, rating rule, classification
system, territory code or description, or other similar
information required to determine the applicable premium for an
insured. The term includes increased limits factors,
classification relativities, deductible relativities, and other
similar factors and relativities.
(6) "Supporting information" means:
(A) the experience and judgment of the filer and the experience
or information of other insurance companies;
(B) the interpretation of any other information on which the
filer relied;
(C) a description of methods used in making a rate; and
(D) any other information the department requires to be filed.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
730, Sec. 3B.042(a), eff. September 1, 2007.
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 9.042(a), eff. September 1, 2007.
Sec. 2053.002. RATE STANDARDS. (a) In setting rates, an
insurance company shall consider:
(1) past and prospective loss cost experience;
(2) operation expenses;
(3) investment income;
(4) a reasonable margin for profit and contingencies;
(5) the effect on premiums of individual risk variations based
on loss or expense considerations; and
(6) any other relevant factor.
(b) A rate or premium established under this subchapter may not
be excessive, inadequate, or unfairly discriminatory.
(c) An insurance company may:
(1) group risks by classification to establish rates and minimum
premiums; and
(2) modify classification rates to produce rates for individual
risks in accordance with rating plans that establish standards
for measuring variations in those risks on the basis of any
factor listed in Subsection (a).
(d) In setting rates that apply only to policyholders in this
state, an insurance company shall use available premium, loss,
claim, and exposure information from this state to the full
extent that the information is actuarially credible. The
insurance company may use experience from outside this state as
necessary to supplement information from this state that is not
actuarially credible.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
730, Sec. 3B.043(a), eff. September 1, 2007.
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 9.043(a), eff. September 1, 2007.
Sec. 2053.003. RATE FILING AND SUPPORTING INFORMATION. (a)
Each insurance company shall file with the department all rates,
supplementary rating information, and reasonable and pertinent
supporting information for risks written in this state.
(b) An insurance company may not make a filing described by
Subsection (a) more frequently than once every six months.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2053.004. PUBLIC INSPECTION OF INFORMATION. Each filing
made, including any supporting information filed, under this
subchapter is open to public inspection as of the date the filing
is made.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2053.005. EFFECTIVE DATE OF RATE; HEARING. (a) A filer
shall designate the date a rate proposed in a filing made under
Section 2053.003 is to take effect. Subject to Subsections
(b)-(d), the rate does not take effect until the department
receives all necessary information required for the filing.
(b) A filing made under Section 2053.003 takes effect on the
date designated by the filer under Subsection (a) unless the
department, not later than the 30th day after the date the
department receives the filing, notifies the filer that the
filing is missing specific required information. The filer must
provide the missing information not later than the 30th day after
the date the filer is notified under this subsection.
(c) If the filer in good faith believes that information
requested under Subsection (b) has already been provided to the
department, the filer may request a hearing. The commissioner
shall hold the hearing not later than the 30th day after the date
the department receives the request for a hearing.
(d) The commissioner shall issue an order not later than the
30th day after the date of the hearing under Subsection (c). If
the commissioner determines that the filing is still missing
required information, the commissioner shall specify in the order
the information that is missing.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2053.006. DISAPPROVAL OF RATE FILING; HEARING. (a) The
commissioner shall disapprove a rate filing made under Section
2053.003 if the commissioner determines that the filing does not
meet the standards established under this subchapter.
(b) If the commissioner disapproves a rate filing, the
commissioner shall issue an order specifying in what respects the
filing fails to meet the requirements of this subchapter.
(c) A filer whose rate filing is disapproved is entitled to a
hearing on written request made to the department not later than
the 30th day after the date the order disapproving the filing
takes effect.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2053.007. DISAPPROVAL OF RATE; HEARING. (a) The
commissioner may issue an order after a hearing disapproving a
rate that is in effect. The commissioner must provide the
insurance company that filed the rate written notice of the
hearing not later than the 10th day before the date of the
hearing.
(b) The commissioner shall issue an order disapproving a rate
under Subsection (a) not later than the 15th day after the close
of the hearing. The order must:
(1) specify in what respects the rate fails to meet the
requirements of this subchapter; and
(2) state the date further use of the rate is prohibited.
(c) Repealed by Acts 2007, 80th Leg., R.S., Ch. 730, Sec.
3B.044, eff. September 1, 2007.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
730, Sec. 3B.044, eff. September 1, 2007.
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 9.044, eff. September 1, 2007.
Sec. 2053.008. EFFECT OF DISAPPROVAL ORDER. (a) If a workers'
compensation insurance policy is issued and the commissioner
subsequently disapproves the rate or filing that governs the
premium charged on the policy, the policyholder may:
(1) continue the policy at the original rate;
(2) cancel the policy without penalty; or
(3) enter into an agreement with the insurance company issuing
the policy to amend the policy to reflect the premium that would
have been charged based on the insurance company's most recently
approved rate.
(b) An amendment under Subsection (a)(3) may not take effect
before the date further use of the rate is prohibited under an
order issued under Section 2053.007.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2053.009. GRIEVANCE. (a) The office of public insurance
counsel or an insured who is aggrieved with respect to a filing
made under Section 2053.003 that is in effect may apply to the
department in writing for a hearing on the filing. The
application must specify the grounds for the applicant's
grievance.
(b) The commissioner shall hold a hearing on an application
filed under Subsection (a) not later than the 30th day after the
date the department receives the application if the department
determines that:
(1) the application is made in good faith;
(2) the applicant would be aggrieved as alleged if the grounds
specified in the application were established; and
(3) the grounds specified in the application otherwise justify
holding the hearing.
(c) The department shall provide written notice of a hearing
under Subsection (b) to the applicant and to each insurance
company that made the filing not later than the 10th day before
the date of the hearing. The notice must specify:
(1) which of the grounds specified in the application are in
question; and
(2) whether the insurance company's entire filing will be
considered at the hearing or whether the hearing is limited to
consideration of the grounds specified in the application.
(d) If, after the hearing, the commissioner determines that the
filing does not meet the requirements of this subchapter, the
commissioner shall issue an order specifying:
(1) in what respects the filing fails to meet those
requirements;
(2) the date the filing is no longer in effect, which must be
within a reasonable period that is not less than 60 days after
the date the order is issued; and
(3) whether the order applies with respect to all insureds
affected by the filing or only with respect to the applicant, if
the applicant was an aggrieved insured.
(e) The department shall send copies of the order issued under
Subsection (d) to the applicant and each affected insurance
company.
(f) An order issued under Subsection (d) does not affect an
insurance policy or contract made or issued before the expiration
of the period stated in the order.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2053.010. PENALTIES. If a workers' compensation insurance
policy is issued and the commissioner subsequently disapproves
the rate or filing on which the premium is based, the
commissioner, after notice and the opportunity for a hearing,
may:
(1) impose sanctions under Chapter 82;
(2) issue a cease and desist order under Chapter 83;
(3) impose administrative penalties under Chapter 84; or
(4) take any combination of these actions.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
730, Sec. 3B.045(a), eff. September 1, 2007.
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 9.045(a), eff. September 1, 2007.
Sec. 2053.011. EXCLUSIVE JURISDICTION. The department has
exclusive jurisdiction over all rates and premiums subject to
this subchapter.
Added by Acts 2007, 80th Leg., R.S., Ch.
730, Sec. 3B.046(a), eff. September 1, 2007.
Added by Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 9.046(a), eff. September 1, 2007.
Sec. 2053.012. REPORT ON LEGISLATIVE REFORMS REQUIRED. (a) Not
later than December 1 of each even-numbered year, the
commissioner shall report to the governor, lieutenant governor,
and speaker of the house of representatives regarding the impact
that legislation enacted during the regular session of the 79th
Legislature reforming the workers' compensation system of this
state has had on the affordability and availability of workers'
compensation insurance for the employers of this state. The
report must include an analysis of:
(1) the projected workers' compensation premium savings realized
by employers as a result of the reforms;
(2) the impact of the reforms on:
(A) the percentage of employers who provide workers'
compensation insurance coverage for their employees; and
(B) to the extent possible, economic development and job
creation;
(3) the effects of the reforms on market competition and carrier
financial solvency, including an analysis of how carrier loss
ratios, combined ratios, and use of individual risk variations
have changed since implementation of the reforms; and
(4) the extent of participation in workers' compensation health
care networks by small and medium-sized employers.
(b) If the commissioner determines that workers' compensation
rate filings or premium levels analyzed by the department do not
appropriately reflect the savings associated with the reforms
described by Subsection (a), the commissioner shall include in
the report required under Subsection (a) any recommendations,
including any recommended legislative changes, necessary to
identify the tools needed by the department to more effectively
regulate workers' compensation rates.
(c) At the request of the department, each insurance company
shall submit to the department all data and other information
considered necessary by the commissioner to generate the report
required under Subsection (a). Failure by an insurance company
to submit the data and information in a timely fashion, as
determined by commissioner rule, constitutes grounds for
sanctions under Chapter 82.
Added by Acts 2007, 80th Leg., R.S., Ch.
730, Sec. 3B.047(a), eff. September 1, 2007.
Added by Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 9.047(a), eff. September 1, 2007.
Sec. 2053.013. REVIEW OF RATES; CONSIDERATION OF OTHER LAW. In
reviewing rates under this subchapter, the commissioner shall
consider any state or federal legislation that has been enacted
and that may impact rates and premiums for workers' compensation
insurance coverage in this state.
Added by Acts 2007, 80th Leg., R.S., Ch.
730, Sec. 3B.047(a), eff. September 1, 2007.
Added by Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 9.047(a), eff. September 1, 2007.
SUBCHAPTER A-1. UNDERWRITING GUIDELINES
Sec. 2053.031. DEFINITIONS. In this subchapter:
(1) "Insurance company" has the meaning assigned by Section
2053.001.
(2) "Underwriting guideline" means a rule, standard, guideline,
or practice, whether written, oral, or electronic, that is used
by an insurance company or its agent to decide whether to accept
or reject an application for coverage under a workers'
compensation insurance policy or to determine how to classify
those risks that are accepted for the purpose of determining a
rate.
Added by Acts 2007, 80th Leg., R.S., Ch.
730, Sec. 3B.048(a), eff. September 1, 2007.
Added by Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 9.048(a), eff. September 1, 2007.
Sec. 2053.032. UNDERWRITING GUIDELINES. Each underwriting
guideline used by an insurance company in writing workers'
compensation insurance must be sound, actuarially justified, or
otherwise substantially commensurate with the contemplated risk.
An underwriting guideline may not be unfairly discriminatory.
Added by Acts 2007, 80th Leg., R.S., Ch.
730, Sec. 3B.048(a), eff. September 1, 2007.
Added by Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 9.048(a), eff. September 1, 2007.
Sec. 2053.033. ENFORCEMENT. This subchapter may be enforced in
the manner provided by Section 38.003(g).
Added by Acts 2007, 80th Leg., R.S., Ch.
730, Sec. 3B.048(a), eff. September 1, 2007.
Added by Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 9.048(a), eff. September 1, 2007.
Sec. 2053.034. FILING REQUIREMENTS. Each insurance company
shall file with the department a copy of the insurance company's
underwriting guidelines. The insurance company shall update its
filing each time the underwriting guidelines are changed. If a
group of insurance companies files one set of underwriting
guidelines for the group, the group shall identify which
underwriting guidelines apply to each insurance company in the
group.
Added by Acts 2007, 80th Leg., R.S., Ch.
730, Sec. 3B.048(a), eff. September 1, 2007.
Added by Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 9.048(a), eff. September 1, 2007.
Sec. 2053.035. APPLICABILITY OF SECTION 38.003. Section 38.003
applies to this subchapter to the extent consistent with this
subchapter.
Added by Acts 2007, 80th Leg., R.S., Ch.
730, Sec. 3B.048(a), eff. September 1, 2007.
Added by Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 9.048(a), eff. September 1, 2007.
SUBCHAPTER B. RATE ADMINISTRATION
Sec. 2053.051. HAZARD CLASSIFICATION SYSTEM. (a) For workers'
compensation insurance, the department shall:
(1) determine hazards by class; and
(2) establish classification relativities applicable to an
employer's payroll in each of the classes at levels adequate to
the risks to which the relativities apply.
(b) The classification relativities established under Subsection
(a)(2):
(1) must be designed to encourage safety;
(2) may be territorially based; and
(3) may reflect a difference in losses between employers of high
wage earners and employers of low wage earners within the same
class.
(c) The department shall revise the classification system at
least once every five years.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2053.052. EXPERIENCE RATING PLAN. (a) The commissioner
shall adopt a uniform experience rating plan for workers'
compensation insurance. The plan must:
(1) encourage accident prevention; and
(2) account for:
(A) the peculiar hazard and experience of individual risks, past
and prospective, inside and outside this state; and
(B) any other relevant factor.
(b) The commissioner shall revise the rating plan at least once
every five years.
(c) The commissioner may adopt reasonable rules and plans
requiring the interchange of loss experience necessary for the
application of the rating plan.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2053.053. USE OF HAZARD CLASSIFICATIONS REQUIRED. A stock
company, mutual insurance company, reciprocal or interinsurance
exchange, or Lloyd's plan authorized to engage in the business of
workers' compensation insurance in this state may not use hazard
classifications other than the classifications established by the
department.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2053.054. USE OF INCURRED CLAIMS EXPERIENCE IN FUTURE
RATINGS REQUIRED. (a) Regardless of a change in a
policyholder's ownership, control, management, or operations,
incurred claims experience must be used in future ratings to
ensure that an employer does not evade an unfavorable or
high-cost experience.
(b) On application by an affected party, the department may
modify a rating under Subsection (a) on proof that a change in a
policyholder's management or operations is clearly designed to
result in a probable reduction of the insured's loss experience.
(c) The commissioner shall adopt rules necessary to implement
this section.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2053.055. RATE ADJUSTMENT. If the commissioner determines
that an insurance company's rates do not meet with the standards
imposed by Section 2053.002, the commissioner may order the
insurance company to adjust the rates to meet those standards.
An insurance company may appeal an order under this section in
accordance with Subchapter D, Chapter 36.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2053.056. RATE HEARINGS. (a) The commissioner shall
conduct a public hearing each biennium, beginning not later than
December 1, 2008, to review rates to be charged for workers'
compensation insurance written in this state. A public hearing
under this section is not a contested case as defined by Section
2001.003, Government Code.
(b) Not later than the 30th day before the date of the public
hearing required under Subsection (a), each insurance company
subject to this subtitle and Article 5.66 shall file the
insurance company's rates, supporting information, and
supplementary rating information with the commissioner.
(c) The commissioner shall review the information submitted
under Subsection (b) to determine the positive or negative impact
of the enactment of workers' compensation reform legislation
enacted by the 79th Legislature, Regular Session, 2005, on
workers' compensation rates and premiums. The commissioner may
consider other factors, including relativities under Section
2053.051, in determining whether a change in rates has impacted
the premium charged to policyholders.
(d) The commissioner shall implement rules as necessary to
mandate rate reductions or to modify the use of individual risk
variations if the commissioner determines that the rates or
premiums charged by insurance companies do not meet the rating
standards as defined in this code.
(e) The commissioner shall adopt rules as necessary to mandate
rate or premium reductions by insurance companies for the use of
cost-containment strategies that result in savings to the
workers' compensation system, including use of a workers'
compensation health care network health care delivery system, as
described by Chapter 1305.
Added by Acts 2007, 80th Leg., R.S., Ch.
730, Sec. 3B.049(a), eff. September 1, 2007.
Added by Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 9.049(a), eff. September 1, 2007.
SUBCHAPTER C. STATISTICAL PLANS; AGENT
Sec. 2053.101. STATISTICAL PLANS FOR REPORTING LOSS EXPERIENCE
AND OTHER DATA. The commissioner shall develop and may
periodically modify reasonable statistical plans for workers'
compensation insurance to be used by each insurance company in
recording and reporting the insurance company's loss experience
and other data required by the department, so that the total loss
and expense experience of all insurance companies is made
available at least annually in the form and detail necessary to
assist in determining whether an insurance company's rates meet
the standards imposed under Section 2053.002.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2053.102. TREATMENT OF PAYMENTS UNDER STATISTICAL PLAN. A
statistical plan developed under Section 2053.101 must require
the following payments to be reported separately and not to be
considered as a loss or expense for purposes of computing a
premium rate modifier or surcharge of an insured:
(1) a direct payment made by an insurance company to influence
public policy; and
(2) any amount paid by an insurance company:
(A) as damages in an action against the insurance company for
malice or bad faith; or
(B) as a fine or penalty.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2053.103. STATISTICAL AGENT. (a) The commissioner may
designate or contract with a qualified organization to serve as
the statistical agent for the commissioner under this subchapter
as provided by Subchapter E, Chapter 38.
(b) The statistical agent may provide to one or more advisory
organizations any information provided by the agent to the
commissioner under this subchapter.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
SUBCHAPTER D. REPORTING REQUIREMENTS AND EXCHANGE OF INFORMATION
Sec. 2053.151. WORKERS' COMPENSATION CLAIMS REPORTS AND
INFORMATION. (a) The commissioner by rule shall prescribe the
information that must be reported on each workers' compensation
claim.
(b) For purposes of Subsection (a), the commissioner shall
establish standards and procedures for categorizing insurance and
medical benefits required to be reported on each workers'
compensation claim to ensure that the data collection methodology
will yield data necessary for research and medical cost
containment efforts.
(c) The commissioner by rule shall establish reporting
requirements for insurance companies regarding workers'
compensation claims. The commissioner may reduce or eliminate
reporting requirements for insurance companies whose workers'
compensation insurance business falls below a specific minimum
premium volume established by the commissioner by rule.
(d) A person may not distribute or otherwise disclose a social
security number or any other information collected under
Subsection (a) that would disclose the identity of a claimant.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
65, Sec. 1, eff. September 1, 2007.
Sec. 2053.152. UPDATE AND TRANSMISSION OF CLAIMS REPORTS. (a)
An insurance company, in accordance with the filing requirements
of a statistical plan developed under Section 2053.101, shall
update and transmit to the commissioner or the commissioner's
statistical agent a claims report filed under Section 2053.151.
(b) Each insurance company that writes at least one-half of one
percent of the workers' compensation insurance in this state
shall report the company's data in a compatible electronic format
prescribed by the commissioner. The commissioner shall take
necessary measures to ensure the accuracy of the data and the
adequacy of the electronic format for the data.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2053.153. EXCHANGE OF INFORMATION AND CONSULTATION WITH
OTHERS. To further the uniform administration of rating laws
relating to workers' compensation insurance, the commissioner
and each insurance company may:
(1) exchange information and experience data with the National
Association of Insurance Commissioners and with insurance
supervisory officials, insurance companies, and advisory
organizations in other states; and
(2) consult and cooperate with a person or entity described by
Subdivision (1) with respect to ratemaking and the application of
rating systems.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2053.154. LOSS STATEMENT AND PAYROLL REPORT. (a) For
purposes of this section, "insurance company" means a stock
company, mutual insurance company, reciprocal or interinsurance
exchange, or Lloyd's plan authorized to engage in the business of
workers' compensation insurance in this state. The term includes
the Texas Mutual Insurance Company.
(b) The department may require an insurance company to submit a
sworn statement or report showing:
(1) the payroll reported to the insurance company;
(2) incurred losses by classification; and
(3) other information the department determines may be necessary
to implement the department's duties.
(c) The department shall prescribe the necessary forms for a
statement or report required by Subsection (b) with consideration
of the methods and forms used for similar purposes in other
states so that uniformity of statistics will not be affected.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
SUBCHAPTER E. OPTIONAL DEDUCTIBLE PLANS
Sec. 2053.201. DEFINITION. In this subchapter, "insurance
company" means a stock company, mutual insurance company,
reciprocal or interinsurance exchange, or Lloyd's plan authorized
to engage in the business of workers' compensation insurance in
this state.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2053.202. ESTABLISHMENT OF OPTIONAL DEDUCTIBLE PLANS. (a)
The department shall require each insurance company writing
workers' compensation insurance in this state to offer at least
three optional deductible plans adopted under this section that
allow a policyholder to self-insure for the amount of the
deductible.
(b) The commissioner by rule shall allow an employer to enter
into an agreement with an insurer for a negotiated deductible
that exceeds the highest deductible available under a plan
described by Subsection (a).
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2053.203. PAYMENT OF CLAIMS; REIMBURSEMENT. (a) An
insurance company issuing a deductible policy under this
subchapter shall service all claims that arise during the policy
period, including those claims payable, wholly or partly, from
the deductible amount.
(b) A deductible policy must provide that:
(1) the insurance company issuing the policy shall pay all
benefits that are payable from the deductible amount; and
(2) the policyholder shall make reimbursements periodically,
rather than at the time claim costs are incurred.
(c) The commissioner shall adopt rules to provide for adequate
security for reimbursement of the amount paid by an insurance
company that is payable from the deductible amount.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2053.204. RATE REDUCTION. (a) The department shall
perform an actuarial analysis to determine the amount of rate
reduction applicable to a deductible policy under this subchapter
as compared to a standard workers' compensation insurance policy
without a deductible.
(b) In years subsequent to the year in which the actuarial
analysis described by Subsection (a) is performed, the department
shall determine the amount of rate reduction according to rating
procedures adopted by the commissioner.
(c) When establishing procedures for the computation of
experience modifiers, the commissioner may allow the exclusion of
any claim amount paid under a deductible by an employer.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2053.205. PROHIBITED CONDUCT. A person who is employed by
a policyholder who self-insures the deductible amount as provided
by this subchapter may not be required to pay any portion of the
deductible amount or be harassed, discharged, or otherwise
discriminated against because the person, in good faith:
(1) is considering initiating or has initiated a workers'
compensation claim;
(2) has retained a representative to represent the person
regarding a claim;
(3) has testified or will testify at an administrative or
judicial proceeding under Subtitle A, Title 5, Labor Code;
(4) has reported a hazardous working condition or hazardous
practice to the Texas Workers' Compensation Commission; or
(5) has taken or is considering taking any other action that may
result in a requirement that the policyholder pay a deductible
amount through a self-insurance plan.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2053.206. VIOLATION OF SUBCHAPTER. (a) A person commits a
Class A administrative violation under Subtitle A, Title 5, Labor
Code, if the person engages in conduct that violates this
subchapter.
(b) Liability for damages for a violation of this subchapter is
determined exclusively under Subtitle A, Title 5, Labor Code.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
SUBCHAPTER F. PREMIUM INCENTIVES AND SURCHARGE
FOR SMALL EMPLOYERS
Sec. 2053.251. DEFINITIONS. In this subchapter:
(1) "Insurance company" means a stock company, mutual insurance
company, reciprocal or interinsurance exchange, or Lloyd's plan
authorized to engage in the business of workers' compensation
insurance in this state.
(2) "Premium" means workers' compensation insurance premium.
(3) "Small employer" means an employer:
(A) who is not experience-rated by the department for workers'
compensation insurance purposes; and
(B) whose annual premium is less than $5,000.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2053.252. PLAN FOR PREMIUM DISCOUNT AND SURCHARGE. The
commissioner shall adopt a plan under which each insurance
company writing workers' compensation insurance in this state
shall:
(1) grant a premium discount to a small employer who qualifies
for a discount under this subchapter; and
(2) assess a surcharge as provided by Section 2053.254.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2053.253. ELIGIBILITY FOR PREMIUM DISCOUNT. (a) A small
employer who has not experienced a compensable employee lost-time
injury during the most recent one-year period for which
statistics are available shall receive a discount of 10 percent
on the amount of the employer's premium.
(b) A small employer who has not experienced a compensable
employee lost-time injury during the most recent two-year period
for which statistics are available shall receive a discount of 15
percent on the amount of the employer's premium.
(c) A small employer who has experienced one or more compensable
employee lost-time injuries during the most recent one-year
period for which statistics are available is not eligible for a
discount on the amount of the employer's premium.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2053.254. ASSESSMENT OF PREMIUM SURCHARGE. A small
employer who has experienced two or more compensable employee
lost-time injuries during the most recent one-year period for
which statistics are available shall be assessed a surcharge of
10 percent on the amount of the employer's premium.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2053.255. MAXIMUM DISCOUNT AND ASSESSMENT. For any annual
premium, a small employer may not:
(1) receive a discount of more than 15 percent; or
(2) be required to pay a surcharge of more than 10 percent.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 2053.256. DISCOUNTS AND SURCHARGES NOT CUMULATIVE. (a)
The discounts and surcharges established under this subchapter
are not cumulative.
(b) A small employer is entitled to receive the discount under
this subchapter in addition to any lesser deviation in the rate
used to write an insurance policy under Sections 2053.051 and
2053.052(a) and (b).
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.