SECTION 6.501. Workers' Compensation

(a) A captive insurance company may not write, issue, or provide any form of workers' compensation insurance coverage to policyholders.

(b) A captive insurance company that issues a reimbursement policy for claims paid under a workers' compensation insurance policy written and issued by an authorized insurance company, may not participate in the adjudication, settlement, or payment of any claims made under that workers' compensation insurance policy.

(c) Claims incurred by a certified self-insured employer may not be paid directly by a captive insurance company, but must continue to be paid by a qualified claims servicing contractor as required in Labor Code §407.061.

(d) The existence of a contractual reimbursement policy issued by a captive insurance company to an affiliate does not alter any statutory requirements related to workers' compensation insurance, including the statutory requirement under Insurance Code §2053.203 that:

(1) the insurance company writing a workers' compensation policy with a negotiated deductible is required to pay all benefits, including those benefits payable, wholly or partly, from the deductible amount; and

(2) the policyholder must make reimbursements to the insurance company writing the workers' compensation policy with a negotiated deductible periodically, rather than at the time claim costs are incurred.

Source Note: The provisions of this §6.501 adopted to be effective April 27, 2014, 39 TexReg 3232