CHAPTER 2053. RATES FOR WORKERS' COMPENSATION INSURANCE

State Codes and Statutes

Statutes > Texas > Insurance-code > Title-10-property-and-casualty-insurance > 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

(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;

(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.

(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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

Loading..

Loading, Please Wait!