A political subdivision may create a risk pool for health and accident coverage, but a pool or its agents may not say the coverage is insurance unless it is bought by contract from an authorized insurer.
Sec. 172.005. RISK POOL. (a) A political subdivision may establish a risk pool or may enter into an interlocal agreement under The Interlocal Cooperation Act (Chapter 791, Government Code) with other political subdivisions to establish a risk pool to provide health and accident coverage for officials, employees, retirees, employees of affiliated service contractors, and their dependents. (b) Contributions paid by a political subdivision's officials, employees, and retirees and employees of affiliated service contractors for coverage shall be deposited to the credit of the risk pool's fund and used as provided by rules of the risk pool. (c) A pool by contract may purchase insurance coverage for persons who are covered by the pool from an insurance company authorized to do business in this state. (d) A pool or its agents may not represent to persons who apply for coverage or who are covered by the pool that the coverage being provided is insurance unless the coverage is by contract purchased from an insurance company authorized to do business in this state. (e) A risk pool organized under this section is a legal entity that may contract with an insurer licensed to do business in Texas to assume any excess of loss of a benefit contract authorized under Section 172.004. Notwithstanding any provision of the Insurance Code or any other law governing insurance in this state, an insurer authorized to do business in Texas may assume the excess of loss of the benefit contract under Section 172.004. Added by Acts 1989, 71st Leg., ch. 1067, Sec. 1, eff. Sept. 1, 1989. Amended by Acts 1991, 72nd Leg., ch. 611, Sec. 1, eff. Aug. 26, 1991; Acts 2001, 77th Leg., ch. 491, Sec. 4, eff. Sept. 1, 2001.