Texas Insurance Codes 5.57A

(1) "Board" means the State Board of Insurance.

(2) "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.

(3) "Group" means:

(A) two or more business entities that join together with the approval of the Board to purchase individual workers' compensation insurance policies covering each business entity that is a part of the group; or

(B) two or more members of a trade association of business entities that join together with the approval of the commissioner to purchase individual workers' compensation insurance policies covering each participating trade association member.

(b) On receiving approval of the Board as provided by this article, 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.

(c) To be eligible to join a group, a business entity must be:

(1) 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 Board; or

(2) a member of the same trade association as the other business entities participating in the group.

(d) The Board shall establish a certification program for groups organized under this article and shall issue certificates of approval to eligible business entities authorizing formation and maintenance of a group.

(e) The Board by rule shall adopt forms, criteria, and procedures for the issuance of certificates of approval to groups under this article.

(f) A group certified under this article 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. Under such a policy, the group is entitled to any premium or volume discount that would be applicable to a policy of the combined premium amount.

(g) 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.

(h) Manual rules and rates shall be used in computing the rates for policies under this article, and the Board shall determine any experience rating factor that shall be applied to those group policies as provided by the Board's rules.

(i) A group shall adopt a plan of operation that shall include the composition and selection of a governing board, the methods for administering the group, and guidelines for the workers' compensation insurance coverage obtained by the group including the payment of premiums, the distribution of discounts, and the methods for providing risk management. A group shall file a copy of its plan of operation with the Board.

(j) A group established under this article is entitled to any deviation applicable under Article 5.60 of this code. A member of a group is not subject to the discounts and surcharges established under Article 5.55B of this code.

Added by Acts 1989, 71st Leg., 2nd C.S., ch. 1, Sec. 13.08, eff. Jan. 1, 1991. Subsecs. (a)(3), (b), (c) amended by Acts 2003, 78th Leg., ch. 275, Sec. 3, 4, eff. Sept. 1, 2003; Acts 2003, 78th Leg., ch. 607, Sec. 2, 3, eff. June 20, 2003.