|(a) This section applies to a licensee's general liability
insurance, including premises and operations coverage. This section
shall not apply to worker's compensation insurance, including employer's
(b) A licensee applying for self-insurance shall file
LNG Form 2027 with LP-Gas Operations, along with materials which will
allow LP-Gas Operations 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 shall demonstrate that it will maintain a
net worth sufficient to ensure that it will meet its statutory obligations
to the public to pay all claims relating to general liability, including
premises and operations coverage; and
(2) the applicant has a sound self-insurance program.
The applicant shall demonstrate that it has established and shall
maintain an insurance program that will protect the public against
all claims involving LNG activities to the same extent as the minimum
limits specified in Table 1 of §14.2031 of this title (relating
to Insurance Requirements). Such a program may include but not be
limited to one or more of the following: reserves; irrevocable letter
of credit, as specified in subsection (h) of this section; sinking
funds; third-party financial guarantees; parent company or affiliate
sureties; excess insurance coverage; or other similar arrangements.
(c) LP-Gas Operations may consider applications for
approval of other securities or agreements, or may require any other
information which may be necessary to ensure the application satisfies
that the security or agreement offered will afford adequate security
for protection of the public.
(d) LP-Gas Operations may approve a licensee's application
for self-insurance if the licensee demonstrates to LP-Gas Operations
its ability to satisfy its obligations for the minimum insurance requirements
specified in §14.2031 of this title (relating to Insurance Requirements).
LP-Gas Operations may approve the licensee as a self-insurer for a
specific time period or for an indefinite period until further action
is taken by LP-Gas Operations.
(e) The applicant shall file semi-annual reports and
annual statements with the applicant's financial status and status
of its self-insurance program with LP-Gas Operations during the period
of its self-insurer status by March 10 and September 10 of each year.
(f) After ten days' notice to the applicant, LP-Gas
Operations may 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 do so, LP-Gas Operations shall
revoke its self-insurer status and may order that the licensee is
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 workers' compensation coverage or general liability and/or motor
vehicle liability insurance if permitted by the Texas Workers' Compensation
Act, Texas Labor Code, Title 5, Subtitle A; and Texas Natural Resources
Code, §116.036, by submitting LNG Form 2995 to LP-Gas Operations.
(h) Letters of credit filed with LNG Form 2028 shall:
(1) be issued by a federally chartered and federally
insured bank authorized to do business in the United States;
(2) be irrevocable during their terms;
(3) be payable to the Commission in part or in full
upon demand and receipt from the Commission of a notice of forfeiture;
(4) not apply to the licensing requirements for worker's
compensation insurance, including employer's liability coverage.
|Source Note: The provisions of this §14.2034 adopted to be effective May 26, 2003, 28 TexReg 4100; amended to be effective June 5, 2006, 31 TexReg 4607; amended to be effective December 24, 2012, 37 TexReg 9921