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TITLE 28INSURANCE
PART 1TEXAS DEPARTMENT OF INSURANCE
CHAPTER 5PROPERTY AND CASUALTY INSURANCE
SUBCHAPTER GWORKERS' COMPENSATION INSURANCE
DIVISION 1SALE OF SUBSTITUTES TO WORKERS' COMPENSATION INSURANCE
RULE §5.6302Sale of Substitutes to Workers' Compensation Insurance

(a) No person, agent, or entity may represent any individual or group policy of insurance or other evidences of insurance coverage as a substitute for a policy of workers' compensation insurance nor may any person, agent, or entity represent to an employer that purchase of an individual or group insurance policy or other evidence of insurance coverage providing benefits to the employer's employees:

  (1) provides the same benefits for either the employee or the employer as are provided by workers' compensation insurance; or

  (2) limits such employees to a claim for benefits under such policies as the employees' sole remedy against the employer in the event the employee suffers a job related injury or disease.

(b) All individual or group policies of insurance or other evidences of insurance coverage which provide benefits to employees and which are marketed to or through (on a franchise, list bill, or other collective basis) employers that have elected, or may in the future elect, to be nonsubscribers to the workers' compensation system shall include the following statement in 10-point boldface type on the first page of the policy and on the first page of all materials used in advertising, marketing, and explaining the policy: "THIS IS NOT A POLICY OF WORKERS' COMPENSATION INSURANCE. THE EMPLOYER DOES NOT BECOME A SUBSCRIBER TO THE WORKERS' COMPENSATION SYSTEM BY PURCHASING THIS POLICY, AND IF THE EMPLOYER IS A NON-SUBSCRIBER, THE EMPLOYER LOSES THOSE BENEFITS WHICH WOULD OTHERWISE ACCRUE UNDER THE WORKERS' COMPENSATION LAWS. THE EMPLOYER MUST COMPLY WITH THE WORKERS' COMPENSATION LAW AS IT PERTAINS TO NON-SUBSCRIBERS AND THE REQUIRED NOTIFICATIONS THAT MUST BE FILED AND POSTED."

(c) The group policies of insurance described in subsection (b) of this section shall include the following statement in 10-point boldface type on the certificate or other evidence of coverage issued to the employees: "THE INSURANCE POLICY UNDER WHICH THIS CERTIFICATE IS ISSUED IS NOT A POLICY OF WORKERS' COMPENSATION INSURANCE. YOU SHOULD CONSULT YOUR EMPLOYER TO DETERMINE WHETHER YOUR EMPLOYER IS A SUBSCRIBER TO THE WORKERS' COMPENSATION SYSTEM."

(d) All policies of insurance, including surplus lines policies, or other evidences of insurance coverage which provide employers liability coverage or which indemnify employers for costs of job-related employee injuries or sickness in excess of those expended by such employers that have elected to be nonsubscribers to the workers' compensation system shall include the following statement in 10-point boldface type on the first page of the policy and on the first page of all materials used in advertising, marketing, and explaining the policy: "THIS IS NOT A POLICY OF WORKERS' COMPENSATION INSURANCE. THE EMPLOYER DOES NOT BECOME A SUBSCRIBER TO THE WORKERS' COMPENSATION SYSTEM BY PURCHASING THIS POLICY, AND IF THE EMPLOYER IS A NON-SUBSCRIBER, THE EMPLOYER LOSES THOSE BENEFITS WHICH WOULD OTHERWISE ACCRUE UNDER THE WORKERS' COMPENSATION LAWS. THE EMPLOYER MUST COMPLY WITH THE WORKERS' COMPENSATION LAW AS IT PERTAINS TO NON-SUBSCRIBERS AND THE REQUIRED NOTIFICATIONS THAT MUST BE FILED AND POSTED."


Source Note: The provisions of this §5.6302 adopted to be effective February 3, 1992, 17 TexReg 400.

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