The department sets the surcharge rate, and insurers and certain self-insurance groups are charged an annual surcharge unless they are governmental entities.
Sec. 405.003. FUNDING; SURCHARGE AND RECOVERY OF SURCHARGE BY INSURERS. (a) The group's duties under this chapter are funded through the assessment of a surcharge collected annually from all insurance carriers, and self-insurance groups that hold certificates of approval under Chapter 407A, except governmental entities. (b) The department shall set the rate of the surcharge based on the expenditures authorized and the receipts anticipated in legislative appropriations. The surcharge rate for insurance companies may not exceed the limitation in Section 255.002(a), Insurance Code. The surcharge rate is applied to the correctly reported gross workers' compensation insurance premiums. The surcharge rate for certified self-insurers may not exceed the limitation in Section 255.002(a), Insurance Code. The surcharge rate is applied to the total surcharge base of all certified self-insurers, as computed under Section 407.103(b). The surcharge rate for self-insurance groups described by Subsection (a) may not exceed the limitation in Section 255.002(a), Insurance Code. The surcharge rate is applied to the group's gross premium for the group's retention, excluding premium collected by the group for excess insurance. (c) The surcharge imposed under Subsection (a) is in addition to all taxes or other surcharges imposed on those insurance carriers for workers' compensation purposes. (d) The surcharge on insurance companies and on self-insurance groups described by Subsection (a) shall be assessed, collected, and paid in the same manner and at the same time as the surcharge established for the support of the department under Chapter 255, Insurance Code. The surcharge on certified self-insurers shall be assessed, collected, and paid in the same manner and at the same time as the self-insurer surcharge collected under Section 407.104. (e) Amounts received under this section shall be deposited in the general revenue fund in accordance with Section 251.004, Insurance Code, to be used: (1) for the operation of the group's duties under this chapter; and (2) to reimburse the general revenue fund in accordance with Section 201.052, Insurance Code. (f) Section 403.095, Government Code, does not apply in relation to amounts received under this section or to any special account into which the amounts are deposited. (g) An insurer may recover a surcharge under this section by: (1) reflecting the surcharge as an expense in a rate filing required under the Insurance Code; or (2) charging the insurer's policyholders. Added by Acts 2003, 78th Leg., 3rd C.S., ch. 10, Sec. 1.01, eff. Oct. 20, 2003. Amended by: Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.021, eff. September 1, 2005. Acts 2005, 79th Leg., Ch. 728 (H.B. 2018), Sec. 11.136, eff. September 1, 2005. Acts 2025, 89th Leg., R.S., Ch. 358 (S.B. 1455), Sec. 22, eff. January 1, 2026. Acts 2025, 89th Leg., R.S., Ch. 358 (S.B. 1455), Sec. 23, eff. January 1, 2026.