(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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