(a) Upon the request of an injured employee entitled to lifetime
income benefits (LIBs) as defined in the Act, the insurance carrier and an
injured employee may agree to change the frequency of LIBs payments from the
standard weekly period to a monthly period. The agreement to change the payment
frequency must be in writing and is only required to be filed with the Commission
if the Commission requests a copy. To relieve the insurance carrier of the
responsibility to pay LIBs weekly a valid written agreement must include the
following terms and conditions:
(1) the agreement for the monthly payment of LIBs shall be
effective the first calendar day of the month following the month in which
the written agreement was entered into by the insurance carrier and the injured
employee;
(2) monthly LIBs shall be issued on or before the seventh
day of the month for which benefits are due;
(3) weekly LIBs payments shall continue through the end
of the month in which the agreement was signed;
(4) payment of the last week of LIBs to transition from
weekly payment of LIBs to monthly payments shall be prorated to the end of
the month to ensure the injured employee receives LIBs through the last day
of the month;
(5) the monthly compensation rate shall be calculated
by multiplying the weekly compensation rate by 4.34821;
(6) if less than the maximum weekly compensation rate
in effect on the date of the compensable injury is being paid, a completed
Employer's Wage Statement must be included with the injured employee's copy
of the written agreement; and
(7) A clear statement regarding the due date of the annual
three percent increase in LIBs must be included.
(b) At any time after signing the agreement for the monthly
payment of LIBs, the injured employee or the insurance carrier may notify
the other party in writing that it no longer agrees to the monthly payment
of LIBs. In this case, the insurance carrier shall pay all accrued but unpaid
LIBs at the end of the current monthly cycle and shall continue to pay LIBs
weekly as and when they accrue and are due. The last monthly payment shall
be prorated to ensure the insurance carrier pays the appropriate amount of
LIBs.
(c) The insurance carrier and the injured employee entitled
to LIBs may agree that the carrier will purchase an annuity for payment of
LIBs. An application for payment of LIBs by annuity must be submitted to the
Commission for approval in the form, format, and manner required by the Commission.
If less than the maximum weekly compensation rate in effect on the date of
the compensable injury is being paid, a complete Employer's Wage Statement
must be included with the application.
(d) An annuity for the payment of LIBs shall meet the following
terms and conditions.
(1) LIBs payments shall be initiated no later than the 45th
day after the date the written agreement was approved by the Commission.
(2) The company providing an annuity for the payment
of LIBs must be licensed to do business in Texas and must have a current A.
M. Best rating of B+ or better or have a Standard & Poor's rating of claims
paying ability of A or better.
(3) The workers' compensation insurance carrier must
guarantee the payments provided by the annuity company in the event of default.
(4) The annuity contract must include funds for payment
of the annual three percent increase in LIBs required by the Act, compounded
annually.
(5) The injured employee, or guardian if applicable,
shall not be allowed to assign the right to receive LIBs from an annuity.
All LIBs must be paid to the order of the injured employee or the legal guardian,
if applicable.
(6) An annuity cannot be purchased to fund the payment
of medical costs incurred by an injured employee entitled to LIBs.
(7) The annuity company shall pay LIBs either weekly
or monthly as indicated in the application for payment of LIBs by annuity.
(8) If monthly payments are agreed to by the insurance
carrier and the injured employee, the transition from weekly to monthly benefits
paid by annuity shall be the same as that for LIBs paid by the responsible
insurance carrier set out in subsection (a) of this section.
(e) This section applies only to agreements entered into on
or after January 1, 2000, for payment of LIBs under the provisions of the
Act.
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