SECTION 13.540. Governance and Operation of Approved PEO

(a) Management of approved PEO. An approved PEO must be managed by competent and trustworthy individuals. An individual responsible for risk management, financial reporting, underwriting, claims, or investment functions of the plan and trust must be eligible for licensure based on the guidelines established in Chapter 1, Subchapter D of this title (relating to Effect of Criminal Conduct) and hold any necessary licenses as required by the Insurance Code.

(b) Initial plan administration. An approved PEO must contract with a third party administrator to perform the day-to-day operations of the plan until the plan's trustees have contracted with a third party administrator to perform the day-to-day operations of the plan as provided in §13.555 of this title (relating to Trustees' Responsibility and Authority).

(c) Location of books and records. An approved PEO may request to maintain the plan and trust's books and records outside this state in compliance with Insurance Code Chapter 803.

Source Note: The provisions of this §13.540 adopted to be effective May 17, 2016, 41 TexReg 3479