Texas Administrative Code › Title 28 - INSURANCE › Part 1 - TEXAS DEPARTMENT OF INSURANCE › Chapter 5 - PROPERTY AND CASUALTY INSURANCE › Subchapter G - WORKERS' COMPENSATION INSURANCE › Division 2 - GROUP SELF-INSURANCE COVERAGE › Section 5.6406 - Indemnity Agreement

Current through Reg. 49, No. 28; July 12, 2024
The indemnity agreement required by Labor Code §
						407A.051(c)(14) and §407A.056 must be executed by all employers in the
						group and shall contain the following provisions:
(1) THIS IS A LEGAL DOCUMENT THAT BINDS THE
					 SIGNATORIES TO SPECIFIC DUTIES AND RESPONSIBILITIES REGARDING GROUP FINANCIAL
					 ARRANGEMENTS FOR COVERING WORKERS' COMPENSATION INJURIES AND OCCUPATIONAL
					 DISEASE AND EMPLOYERS LIABILITY INSURANCE COVERAGE IN THE STATE OF
					 TEXAS.
(2) JOINT AND SEVERAL
					 LIABILITY: THIS PARAGRAPH REQUIRES THE EMPLOYER TO JOIN IN PAYING WORKERS'
					 COMPENSATION LOSSES OF THE GROUP IN THE EVENT THE GROUP'S ASSETS ARE NOT
					 SUFFICIENT TO COVER THE LIABILITIES. The Employer will be jointly and severally
					 obligated with each other member of the group to meet the workers' compensation
					 and employer's liability insurance coverage obligations of the group and to
					 make any and all payments to the group, which may be necessary to meet the
					 group's obligations under applicable Texas law and regulations and also in
					 accordance with the group's Bylaws; including agreeing that if the assets of
					 the group are at any time insufficient to enable the group to discharge the
					 group's legal liabilities and other obligations and maintain the reserves
					 required of it under applicable Texas statutes and regulations, and the group
					 is unable to otherwise make up the deficiency in accordance with Texas laws,
					 regulations, and the group's Bylaws, then the Employer will be jointly and
					 severally liable to pay an assessment by the group in an amount necessary to
					 make up the deficiency.
(3) The
					 Employer remains jointly and severally liable even if the Employer is cancelled
					 by the group or elects to terminate membership in the group. The Employer will
					 remain jointly and severally liable for the workers' compensation and
					 employer's liability insurance coverage obligations for the group and its
					 members that were incurred during the Employer's period of
					 membership.
(4) The insolvency or
					 bankruptcy of the Employer will not relieve the group, the Employer, or any
					 member from liability for the payment of any benefits incurred during the
					 insolvency or bankrupt member's period of membership.
(5) The Employer is not buying a policy of
					 insurance. The employer is entering into an agreement which is evidence that
					 the employer is a subscriber to the Texas workers' compensation
					 system.
(6) Because the sums
					 required to fulfill workers' compensation and employer's liability insurance
					 coverage obligation of the group cannot be known precisely in advance, the
					 premium and other assessments, reserve requirements, and other financial
					 requirements for the group's operation will initially be established by
					 estimates.