16 Tex. Admin. Code § 9.26 - Insurance and Self-Insurance Requirements
(a) A licensee or registered manufacturer
shall not perform any activity authorized by its license or registration under
§
9.6 of this title (relating to
License Categories, Container Manufacturer Registration, and Fees) unless
insurance coverage required by this section is in effect. LP-gas licensees,
registered manufacturers, or applicants for license or manufacturer
registration shall comply with the minimum amounts of insurance specified in
Table 1 of this section or with the self-insurance requirements in subsection
(i) of this section, if applicable. Registered manufacturers are not eligible
for self-insurance. Before AFS grants or renews a manufacturer registration, an
applicant for a manufacturer registration shall submit the documents required
by paragraph (1) of this subsection. Before AFS grants or renews a license, an
applicant for a license shall submit either:
(1) An insurance AcordT form; or any other
form approved by the Texas Department of Insurance that has been prepared and
signed by the insurance carrier containing all required information. The forms
must be issued by an insurance company authorized or accepted by the Texas
Department of Insurance; or
(2)
properly completed documents demonstrating the applicant's compliance with the
self-insurance requirements set forth in subsection (j) of this section.
(b) Each licensee or
registered manufacturer shall file LPG Form 999 or other written notice with
AFS at least 30 calendar days before the cancellation of any insurance
coverage. The 30-day period commences on the date the notice is actually
received by AFS.
(c) A licensee or
applicant for a license that does not employ or contemplate employing any
employee to be engaged in LP-gas related activities in Texas may file LPG Form
996B in lieu of filing a workers' compensation insurance form, including
employer's liability insurance, or alternative accident and health insurance
coverage. The licensee or applicant for a license shall file the required
insurance form with AFS before hiring any person as an employee engaged in
LP-gas related work.
(d) A
licensee, applicant for a license, or an ultimate consumer that does not
operate or contemplate operating a motor vehicle equipped with an LP-gas cargo
container or does not transport or contemplate transporting LP-gas by vehicle
in any manner may file LPG Form 997B in lieu of a motor vehicle bodily injury
and property damage insurance form, if this certificate is not otherwise
required. The licensee or applicant for a license shall file the required
insurance form with AFS before operating a motor vehicle equipped with an
LP-gas cargo container or transporting LP-gas by vehicle in any
manner.
(e) A licensee, registered
manufacturer, or applicant for a license or manufacturer registration that does
not engage in or contemplate engaging in any LP-gas activities that would be
covered by completed operations or products liability insurance, or both, may
file LPG Form 998B in lieu of a completed operations and/or products liability
insurance form. The licensee, registered manufacturer, or applicant for a
license or manufacturer registration shall file the required insurance form
with AFS before engaging in any operations that require completed operations
and/or products liability insurance.
(f) A licensee, registered manufacturer, or
applicant for a license or manufacturer registration that does not engage in or
contemplate engaging in any operations that would be covered by general
liability insurance may file LPG Form 998B in lieu of filing a general
liability insurance form. The licensee, registered manufacturer, or applicant
for a license or manufacturer registration shall file the required insurance
form with AFS before engaging in any operations that require general liability
insurance.
(g) A licensee may
protect its employees by obtaining accident and health insurance coverage from
an insurance company authorized to write such policies in this state as an
alternative to workers' compensation coverage. The alternative coverage shall
be in the amounts specified in Table 1 of this section.
(h) A state agency or institution, county,
municipality, school district, or other governmental subdivision shall meet the
requirements of this section for workers' compensation, general liability,
and/or motor vehicle liability insurance. The requirements may be met by filing
LPG Form 995 with AFS as evidence of self-insurance, if permitted by the Texas
Labor Code, Title 5, Subtitle C, and Texas Natural Resources Code, §
113.097.
(i) Self-insurance requirements.
(1) This subsection applies to a licensee's
or a license applicant's motor vehicle bodily injury and property damage
liability coverage and general liability coverage. A licensee or license
applicant shall not elect to self-insure for more than 12 consecutive months,
exclusive of the six-month period for which a letter of credit is required to
remain in effect pursuant to paragraph (4) of this subsection.
(2) A licensee or license applicant desiring
to self-insure shall file with AFS a properly completed LPG Form 28, Notice of
Election to Self-Insure and a properly completed LPG Form 28-A, Bank
Declarations Regarding Irrevocable Letter of Credit. The licensee or license
applicant shall attach to the LPG Form 28-A any documentation necessary to show
that the bank issuing the irrevocable letter of credit meets the requirements
in paragraph (5)(E) of this subsection.
(3) The irrevocable letter of credit shall be
in an amount that is no less than the total of all minimum insurance coverage
amounts required by the Commission in the Table in subsection (a)of this
section for every coverage for which the licensee or license applicant seeks to
self-insure.
(4) The irrevocable
letter of credit shall be valid until the expiration date shown on LPG Form 28,
which shall be no sooner than six months after the earlier of either:
(A) the expiration date of the license;
or
(B) the effective date of
insurance coverage.
(5)
A letter of credit commemorated by LPG Form 28-A shall:
(A) be irrevocable during its term;
(B) be payable to the Commission or
Commission's designee in part or in full as directed by the Commission in
compliance with an order from state or federal court;
(C) include a guarantee from the bank that
issues the letter of credit (irrevocable confirmed credit);
(D) not apply to the licensing requirements
for worker's compensation insurance including employers liability insurance or
alternative accident/health insurance; and
(E) be issued by a federally insured bank
authorized to do business in the State of Texas which meets or exceeds the
following requirements:
(i) Bank management
shall attest that the bank is not subject to any outstanding written
enforcement action, agreement, order, capital directive, or prompt corrective
action directive issued by a state or federal bank regulatory agency;
(ii) The bank shall be "well capitalized" as
defined in federal bank regulatory statutes with:
(I) a total risk-based capital ratio of 10%
or greater;
(II) a Tier 1
risk-based capital ratio of 6% or greater; and
(III) a leverage ratio of 5% or
greater.
(iii) The bank
shall have received a satisfactory or better rating at its most recent
Community Reinvestment Act (CRA) examination by a federal bank regulatory
agency;
(iv) The bank management
shall attest that the full amount of the letter of credit, when added to other
indebtedness of the licensee or applicant for license to the bank, is within
the bank's regulatory lending limit; and
(v) The issuing bank shall be in good
standing with the State Comptroller's Office regarding the payment of franchise
taxes and other obligations to the state.
(6) In addition to the requirements of §
9.36 of this title (relating to
Report of LP-Gas Incident/Accident), within 30 days of the occurrence of any
incident or accident involving the business activities of a self-insured LP-gas
licensee that results in property damage or loss and/or personal injuries, the
licensee shall notify AFS in writing of the incident. The licensee shall
include in the notification a list of the names and addresses of any
individuals known to the licensee who may have suffered losses in the incident.
The licensee shall also provide written notice to all such individuals of the
licensee's status as being self-insured and of the expiration date of the
licensee's letter of credit.
(j) Each licensee or registered manufacturer
shall promptly notify AFS of any change in insurance coverage or insurance
carrier by filing a properly completed AcordT form; other form approved by the
Texas Department of Insurance that has been prepared and signed by the
insurance carrier containing all required information; or documents
demonstrating the applicant's compliance with the self-insurance requirements
set forth in subsection (i) of this section. Failure to promptly notify AFS of
a change in the status of insurance coverage or insurance carrier may result in
an enforcement action and an administrative penalty.
Notes
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