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RULE §13.63Self-Insurance Requirements

(a) General qualifications. AFS may approve the application of a CNG licensee to qualify as a self‑insurer if such licensee furnishes a true and accurate statement of its financial condition and other evidence which establishes to the satisfaction of AFS the ability of such licensee to satisfy its obligations for the minimum insurance requirements specified in §13.62 of this title (relating to Insurance Requirements). Registered manufacturers are not eligible for self-insurance. This section shall not apply to AFS' licensing requirements for worker's compensation insurance, including employer's liability coverage.

(b) Applicant guidelines. In addition to filing CNG Form 1027, Application for Qualification as Self‑Insurer, an applicant applying for self‑insurer status covering general liability, including premises and operations coverage, shall submit materials that will allow AFS to determine whether:

  (1) the net worth of the applicant is adequate in relationship to the size of operations and the extent of its request for self‑insurance authority. The applicant should demonstrate that it will maintain a net worth sufficient to ensure that it will be able to meet its statutory obligations to the public to pay all claims relating to general liability, including premises and operations coverage in the event of a claim;

  (2) the applicant has a sound self‑insurance program. The applicant shall demonstrate that it has established, and will maintain, an insurance program that will protect the public against all claims involving CNG activities to the same extent as the minimum limits applicable pursuant to Table 1 in §13.62(a) of this title (relating to Insurance Requirements). Such a program may include, but not be limited to, one or more of the following:

    (A) reserves;

    (B) sinking funds;

    (C) third party financial guarantees;

    (D) parent company or affiliate sureties;

    (E) excess insurance coverage; or

    (F) other similar arrangements; and

  (3) the applicant presents evidence that it meets the requirements for motor carrier self‑insurance promulgated by the Texas Department of Transportation.

(c) Other securities or agreements. AFS may consider applications for approval of other securities or agreements, or may require any other document(s) which may be necessary to ensure such application satisfies that the security or agreement offered will afford adequate security for protection of the public.

(d) Periodic reports. The applicant shall file semiannual reports and annual statements reflecting the applicant's financial condition and status of its self‑insurance program with AFS during the period of its self‑insurer status by March 10 and September 10 of each year.

(e) Duration of self‑insurer status. AFS may approve the applicant as a self‑insurer for any specific time period, or for an indefinite period until revoked by AFS.

(f) Revocation of a self‑insurer status. AFS may at any time, upon 10 days notice to the applicant, require the applicant to appear and demonstrate that it continues to have adequate financial resources to pay all general liability, including premises and operations coverage claims, and that it remains in compliance with the other requirements of this section. If the applicant fails to so demonstrate, its self‑insurer status shall be revoked and it may be ineligible for self‑insurance in the future.

(g) A state agency or institution, county, municipality, school district, or other governmental subdivision may meet the requirements for general liability and/or motor vehicle liability insurance or workers' compensation coverage of §13.62 of this title if permitted by the Texas Workers' Compensation Act, Texas Labor Code, Title 5, Subtitle A; and the Texas Natural Resources Code, §116.036, by submitting CNG Form 1995 to AFS.

Source Note: The provisions of this §13.63 adopted to be effective November 15, 1990, 15 TexReg 5941; amended to be effective November 29, 1993, 18 TexReg 8457; amended to be effective June 5, 2006, 31 TexReg 4604; amended to be effective December 24, 2012, 37 TexReg 9917; amended to be effective February 15, 2021, 46 TexReg 1035; amended to be effective February 7, 2023, 48 TexReg 507

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