SECTION 114.5. Excess Insurance Requirements

(a) The upper limit of liability for a contract or policy of excess insurance shall be in the amount required by the commissioner. The minimum amount the commissioner may require is $5 million per occurrence.

(b) A contract or policy of excess insurance must be issued by an insurance company authorized by the State of Texas to transact such business and shall include the following provisions:

(1) cancellation requires notice to the division in the form and manner prescribed by the commissioner at least 60 days before termination;

(2) non-renewal requires notice to the division, in the form and manner prescribed by the commissioner at least 60 days before the end of the policy;

(3) the Association must be named as an additional insured on the excess policy and may assume the rights and responsibilities of the certified self-insurer under the policy when the certified self-insurer is declared to be impaired; and

(4) all of the following benefits to which the injured employee is entitled under the Texas Workers' Compensation Act must be applied toward reaching the retention amount:

(A) payments made by the certified self-insured employer;

(B) payments due and owing by the certified self-insured employer;

(C) payments made on behalf of the certified self-insured employer by any form of security as required by the Act or division rules; and

(D) payments made by the Association pursuant to Texas Labor Code §407.121 and §407.127.

(c) The commissioner will not issue a certificate before the excess insurance carrier has submitted to the division evidence of a qualifying excess insurance policy that meets the requirements of this section.

(d) The certified self-insurer who elects to cancel or chooses not to renew a policy of excess insurance shall notify the division 60 days prior to the cancellation or termination in the form and manner prescribed by the commissioner.

Source Note: The provisions of this §114.5 adopted to be effective January 1, 1993, 17 TexReg 7896; amended to be effective March 13, 2000, 25 TexReg 2088; amended to be effective May 9, 2004, 29 TexReg 4186; amended to be effective January 6, 2019, 44 TexReg 99