MARK WHITE 

Attorney General 

Supreme Court Building 

I? 0. BOX 12546 

Austin, TX. 76711. 2546 

5121475-2501 

Telex 9101674.1367 

Telecopier 5121475-0266 

1607 Main St., Suite 1400 

Dallas, TX. 75201-4709 

2141742.6944 

4624 Alberta Ave.. Suite 160 

El Paso. TX. 79905.2793 

9151533.3464 

1220 Dallas Ave., Suite 202 

Houston, TX. 77002-6966 

7131650-0666 

606 Broadway. Suite 312 

Lubbock. TX. 79401.3479 

6061747-5236 

4309 N. Tenth, suite s 

McNen, TX. 76501-1665 

5121662.4547 

200 Main Plaza, Suite 400 

San Antonio. TX. 76205-2797 

5121225-4191 

A” Equal OpportunityI 

Affirmative Action Employer 

The Attorney General of Texas 

December 31, 1982 

Mr. Kenneth H. Ashworth 

Coordinating Board 

Opinion No. NJ-592 

Texas College and University System Re: Whether a public instituP. 0. Box 12788, Capitol Station tion of higher education may, 

Austin, Texas 78711 consistent with article 3.50-3 

of the Texas Insurance Code, 

self-insure its employees 

without purchasing a group 

insurance policy 

Dear Mr. Ashworth: 

You inquire as to the ability of a public senior college or 

university to establish a self-insurance fund to provide life, 

accident, and health coverage to its employees. 

In 1977, the Texas State College and University Employees Uniform 

Insurance Benefits Act was enacted to provide, inter alia, uniformity 

in the basic group life, accident, and health insurance coverages for 

all employees of Texas state colleges and universities. Tex. Ins. 

Code art. 3.50-3. A public senior college or university is an 

institution required by the act to provide basic insurance benefits 

for its employees. Tex. Ins. Code art. 3.50-3, 83(a)(B). Only 

"qualified carriers" are eligible to bid on the insurance coverage to 

be provided according to the act. Tex. Ins. Code art. 3.50-3, 

§4(b)(4) CD) (0. Pursuant to section 3(a)(ll) of the act, a "qualified 

carrier" is: 

(A) any insurance company authorized to do 

business in this state by the State Board of 

Insurance to provide any of the types of insurance 

coverages. benefits, or services provided for in 

this Act under any of the insurance laws of the 

State of Texas, which has an adequate surplus, a 

successful operating history, and which has had 

successful experience in providing and servicing 

any of the types of group coverage provided for in 

this Act as determined by the State Board of 

Insurance; 

p. 2201 
Mr. Kenneth H. Ashworth - Page 2 (Mw-592) 

(B) any corporation operating under Chapter 20 

of the Texas Insurance Code which provides any of 

the types of coverage, benefits, or services 

provided for in this Act, which has a successful 

operating history, and which has had successful 

experience in providing and servicing any of the 

types of group coverage provided for in this Act 

as determined by the State Board of Insurance; or 

(C) any combination of carriers as herein 

defined, upon such terms and conditions as may be 

prescribed by the administrative council. 

The act further provides that an institution may select and contract 

for services performed by health maintenance organizations that have 

authorization to offer health care services to eligible employees in a 

specific area of Texas. Tex. Ins. Code art. 3.50-3, §4(b)(4)(D)(iv). 

A self-insured state college or university is not a qualified carrier 

under the act nor a licensed H.M.O. Therefore, a self-insurance 

arrangement as described in your request would be impermissible. 

Conditioned upon a negative response to your first inquiry, you 

ask whether a public senior college or university may establish a 

self-insurance fund in conjunction with the purchase of a stop-loss 

insurance policy from an insurance company to provide its employees 

and their dependents with the basic health, life, and accident 

coverages. We interpret you as asking whether the stop-loss (or 

excess) policy with a qualified carrier would, in combination with a 

self-insurance program, assure employees and dependents of the 

provision of required coverages. In light of the act's clear 

requirement that -the basic coverage be provided by a 

carrier," our opinion is that a self-insurance program may 

to provide any or all of the minimum required coverage. 

SUMMARY 

A self-insurance fund may not be used by 

-_ 

"qualified 

not be used 

a 

state senior college or university to provide any 

or all of the uniform life and accident and health 

benefits required by article 3.50-3 of the Texas 

Insurance Code. 

z&&7 

Attorney General of Texas 

p. 2202 
Mr. Kenneth H. Ashworth - Page 3 @lw-592) 

JOHN W. FAINTER, JR. 

First Assistant Attorney General 

RICHARD E. GRAY III 

Executive Assistant Attorney General 

Prepared by Catherine B. Fryer 

Assistant Attorney General 

APPROVED: 

OPINION COMMITTEE 

Susan L. Garrison, Chairman 

Jon Bible 

Catherine B. Fryer 

Rick Gilpin 

Jim Moellinger 

p. 2203