An employer joining an approved workers' compensation self-insurance group must apply for membership and sign the required indemnity agreement; the group must keep records, notify regulators after cancellation or termination, keep coverage for a short period, and pay covered claims.
Sec. 407A.201. ADMISSION OF EMPLOYER AS MEMBER. (a) An employer who joins an approved workers' compensation self-insurance group shall: (1) submit an application for membership to the board of trustees or its administrator; and (2) enter into the indemnity agreement as required by Section 407A.056. (b) The board of trustees shall maintain as a permanent record the employer's application for membership and the approval of the application. (c) The membership of an individual member of a group is subject to cancellation by the group as provided by the bylaws of the group. An individual member may also elect to terminate participation in the group. The group shall notify the commissioner and the commissioner of workers' compensation of the cancellation or termination of a membership not later than the 10th day after the date on which the cancellation or termination takes effect and shall maintain coverage of each canceled or terminated member until the 30th day after the date of the notice, at the terminating member's expense, unless before that date the commissioner of workers' compensation notifies the group that the canceled or terminated member has: (1) obtained workers' compensation insurance coverage; (2) become a certified self-insurer; or (3) become a member of another group. (d) The group shall pay each workers' compensation claim for which a member of the group incurs liability during the period of membership. A member who elects to terminate membership or whose membership is canceled by the group remains jointly and severally liable for the workers' compensation obligations of the group and its members incurred during the canceled or terminated member's period of membership. (e) A member of a group is not relieved of workers' compensation liabilities incurred during its period of membership except through payment by the group or the member of required workers' compensation benefits. (f) The insolvency or bankruptcy of a member does not relieve a group or any other member of the group of liability for the payment of any workers' compensation benefits incurred during the insolvent or bankrupt member's period of membership. Added by Acts 2003, 78th Leg., ch. 275, Sec. 1, eff. Sept. 1, 2003. Amended by: Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.072, eff. September 1, 2005. SUBCHAPTER F. EXAMINATIONS, FINANCIAL STATEMENTS, AND OTHER REPORTS