SECTION 13.556. Protection of Plan and Trust Assets

(a) Trustees' fidelity coverage. The board of trustees must maintain a fidelity bond or a zero-deductible crime policy that complies with the requirements of §13.568 of this title (relating to Standards for Fidelity Coverage). The fidelity bond or zero-deductible crime policy must cover each person responsible for handling or administering plan assets, including the board of trustees, the approved PEO, its directors, officers, agents and employees, or any other individual responsible for servicing the plan.

(b) Errors and omissions insurance. The board of trustees must purchase an errors and omissions policy in the amount of $500,000 to cover the performance of their duties to the plan and trust. The policy must be purchased from a company that satisfies the requirements of §13.568(a)(2) of this title.

(c) Ensuring existence of PEO's fidelity coverage. The trustees must annually require that the approved PEO provide them with documentation that it has maintained and is maintaining in effect fidelity coverage that complies with §13.542 of this title (relating to PEO's Fidelity Coverage).

Source Note: The provisions of this §13.556 adopted to be effective May 17, 2016, 41 TexReg 3479