| (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
liability coverage.
(b) A licensee applying for self-insurance shall file
LNG Form 2027 with AFS along with materials which 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 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) AFS 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) AFS may approve a licensee's application for self-insurance
if the licensee demonstrates to AFS its ability to satisfy its obligations
for the minimum insurance requirements specified in §14.2031
of this title. AFS may approve the licensee as a self-insurer for
a specific time period or for an indefinite period until further action
is taken by AFS.
(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 AFS 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, AFS 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, AFS 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 AFS.
(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;
and
(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; amended to be effective February 15, 2021, 46 TexReg 1044 |
