2005 Texas Insurance Code CHAPTER 2206. RISK MANAGEMENT POOLS FOR CERTAIN EDUCATIONAL ENTITIES

INSURANCE CODE

CHAPTER 2206. RISK MANAGEMENT POOLS FOR CERTAIN EDUCATIONAL 
ENTITIES

SUBCHAPTER A. GENERAL PROVISIONS


	§ 2206.001. DEFINITIONS.  In this chapter:                                  
		(1)  "Board" means the board of trustees of a pool.                           
		(2)  "Fund" means a risk management fund.                                     
		(3)  "Junior college district" means a junior college 
district created under the laws of this state.
		(4)  "Pool" means a risk management pool created under 
this chapter.        
		(5)  "School district" means a public school district 
created under the laws of this state.

Added by Acts 2005, 79th Leg., ch. 727, § 2, eff. April 1, 2007.           


	§ 2206.002. APPLICABILITY OF OTHER LAWS.  (a) Except as 
provided by Subsection (b), a pool is not considered insurance 
under this code or other laws of this state, and the department does 
not have jurisdiction over the pool.
	(b)  The pool:                                                                 
		(1)  shall collect the necessary information and file 
with the department the reports required by Subchapter D, Chapter 
38;  and
		(2)  is subject to Chapter 541 and Section 543.001.                           

Added by Acts 2005, 79th Leg., ch. 727, § 2, eff. April 1, 2007.           

SUBCHAPTER B. SCHOOL DISTRICT RISK MANAGEMENT POOL


	§ 2206.051. CREATION OF SCHOOL DISTRICT RISK MANAGEMENT 
POOL.  (a) The boards of trustees of five or more school districts 
may create the school district risk management pool by adopting a 
resolution to create the pool.
	(b)  The school district risk management pool insures each 
school district that purchases coverage in the pool against 
liability under law for the district's acts and omissions.
	(c)  Not more than one school district risk management pool 
may be created under this subchapter.

Added by Acts 2005, 79th Leg., ch. 727, § 2, eff. April 1, 2007.           


	§ 2206.052. PARTICIPATION IN POOL.  (a) A school district 
that meets the criteria established by the school district risk 
management pool in the pool's plan of operation may:
		(1)  purchase coverage from the pool;  and                                    
		(2)  use district money to pay the fees, contributions, 
or premiums required to participate in the pool and obtain the 
coverage.
	(b)  A junior college district may not participate in the 
school district risk management pool.

Added by Acts 2005, 79th Leg., ch. 727, § 2, eff. April 1, 2007.           


	§ 2206.053. ORGANIZATIONAL MEETING;  SELECTION OF 
TEMPORARY BOARD.  (a) On authorization to create the school 
district risk management pool as provided by Section 2206.051, the 
board of trustees of each school district adopting a resolution to 
create the pool shall select one representative to meet with 
representatives of the other school districts adopting the 
resolution.
	(b)  At the meeting, the representatives shall:                                
		(1)  adopt guidelines for developing an organizational 
plan for the pool;  and
		(2)  select nine individuals to serve as a temporary 
board for the pool.    

Added by Acts 2005, 79th Leg., ch. 727, § 2, eff. April 1, 2007.           

SUBCHAPTER C. JUNIOR COLLEGE DISTRICT RISK MANAGEMENT POOL


	§ 2206.101. CREATION OF JUNIOR COLLEGE DISTRICT RISK 
MANAGEMENT POOL.  (a) The board of trustees of five or more junior 
college districts may create the junior college district risk 
management pool by adopting a resolution to create the pool.
	(b)  The junior college district risk management pool 
insures each junior college district that purchases coverage in the 
pool against liability under law for the district's acts and 
omissions.
	(c)  Not more than one junior college district risk 
management pool may be created under this subchapter.

Added by Acts 2005, 79th Leg., ch. 727, § 2, eff. April 1, 2007.           


	§ 2206.102. PARTICIPATION IN POOL.  (a) A junior college 
district that meets the criteria established by the junior college 
district risk management pool in the pool's plan of operation may:
		(1)  purchase coverage from the pool;  and                                    
		(2)  use district money to pay the fees, contributions, 
or premiums required to participate in the pool and obtain the 
coverage.
	(b)  A school district may not participate in the junior 
college district risk management pool.

Added by Acts 2005, 79th Leg., ch. 727, § 2, eff. April 1, 2007.           


	§ 2206.103. ORGANIZATIONAL MEETING;  SELECTION OF 
TEMPORARY BOARD.  (a) On authorization to create the junior college 
district risk management pool as provided by Section 2206.101, the 
board of trustees of each junior college district adopting a 
resolution to create the pool shall select one representative to 
meet with representatives of the other junior college districts 
adopting the resolution.
	(b)  At the meeting, the representatives shall:                                
		(1)  adopt guidelines for developing an organizational 
plan for the pool;  and
		(2)  select nine individuals to serve as a temporary 
board for the pool.    

Added by Acts 2005, 79th Leg., ch. 727, § 2, eff. April 1, 2007.           

SUBCHAPTER D. PLAN OF OPERATION


	§ 2206.151. TIME FOR CREATION OF PLAN OF OPERATION.  (a) 
Not later than the 30th day after the date the temporary board of a 
pool is selected, the temporary board shall meet and begin 
preparing a detailed plan of operation for the pool.
	(b)  The temporary board shall complete the plan of operation 
not later than the 90th day after the date the temporary board is 
selected.

Added by Acts 2005, 79th Leg., ch. 727, § 2, eff. April 1, 2007.           


	§ 2206.152. CONTENTS OF PLAN OF OPERATION.  (a) Subject 
to the requirements of this chapter, a pool's plan of operation must 
include:
		(1)  the organizational structure of the pool, 
including:                   
			(A)  the number of regular board members;                                    
			(B)  the method of selecting the board members;                              
			(C)  the board's method of procedure and 
operation;  and                   
			(D)  a summary of the method for managing and 
operating the pool;          
		(2)  a description of the fees, contributions, or 
financial arrangements necessary to cover the initial expenses of 
the pool and estimates, supported by statistical data, of the 
amounts of those fees, contributions, or other financial 
arrangements;
		(3)  underwriting guidelines and procedures for 
evaluating risks;           
		(4)  procedures for purchasing reinsurance;                                   
		(5)  methods, procedures, and guidelines for 
establishing:                  
			(A)  premium rates for pool coverage;  and                                   
			(B)  pool coverage limits;                                                   
		(6)  procedures for processing and paying claims;                             
		(7)  methods and procedures for defraying losses and 
expenses of the pool;  
		(8)  methods, procedures, and guidelines for managing 
and investing the money in the fund created for the pool;
		(9)  minimum capital and surplus to be maintained by 
the pool;  and         
		(10)  minimum standards for reserve requirements for 
the pool.              
	(b)  The plan of operation may include any matter relating to 
the organization and operation of the pool and the pool's finances.

Added by Acts 2005, 79th Leg., ch. 727, § 2, eff. April 1, 2007.           

SUBCHAPTER E. BOARD OF TRUSTEES


	§ 2206.201. BOARD OF TRUSTEES.  (a) A pool is governed by 
a board of trustees as provided by the plan of operation.
	(b)  Not later than the 15th day after the date the temporary 
board of a pool completes the plan of operation, the initial regular 
board must be selected and take office as provided by the plan.
	(c)  An individual serving on the board who is an officer or 
employee of a school district or junior college district covered by 
the pool performs duties on the board as additional duties required 
of the individual's original office or employment.

Added by Acts 2005, 79th Leg., ch. 727, § 2, eff. April 1, 2007.           


	§ 2206.202. GENERAL AUTHORITY OF BOARD;  RULES.  (a) A 
board is responsible for the general administration and operation 
of the pool and the pool's fund.
	(b)  The board may:                                                            
		(1)  exercise powers and enter into contracts necessary 
to implement this chapter and the plan of operation;  and
		(2)  adopt rules to implement this chapter and the plan 
of operation.       

Added by Acts 2005, 79th Leg., ch. 727, § 2, eff. April 1, 2007.           


	§ 2206.203. PERSONNEL;  CONTRACTS FOR SERVICES.  (a) A 
board may employ a fund manager and other persons necessary to 
implement this chapter and the plan of operation.
	(b)  The board may employ or contract with a person or 
insurer for underwriting, accounting, claims, and other services.

Added by Acts 2005, 79th Leg., ch. 727, § 2, eff. April 1, 2007.           


	§ 2206.204. PERFORMANCE BOND REQUIRED.  (a) Each board 
member and each board employee who has authority over money in the 
fund or money collected or invested by the pool shall execute a bond 
in an amount determined by the board.  The bond must be payable to 
the pool and conditioned on the faithful performance of the 
person's duties.
	(b)  The pool shall pay the cost of a bond executed under 
Subsection (a).    

Added by Acts 2005, 79th Leg., ch. 727, § 2, eff. April 1, 2007.           


	§ 2206.205. IMMUNITY FROM CERTAIN LIABILITIES.  A board 
member or board employee is not liable:
		(1)  with respect to a claim or judgment for which 
coverage is provided by the pool;  or
		(2)  for a claim or judgment made against a school 
district or junior college district covered by the pool.

Added by Acts 2005, 79th Leg., ch. 727, § 2, eff. April 1, 2007.           

SUBCHAPTER F. RISK MANAGEMENT FUND


	§ 2206.251. FUND CREATION;  MANAGEMENT.  (a) Immediately 
after taking office, an initial regular board shall create a risk 
management fund.  The fund must include:
		(1)  fees, contributions, and premiums collected by the 
pool;               
		(2)  investments of money in the fund;                                        
		(3)  interest earned on investments made by the pool;  
and                  
		(4)  all other income received by the pool.                                   
	(b)  The board shall manage and invest the money in the fund 
in the manner provided by the plan of operation.

Added by Acts 2005, 79th Leg., ch. 727, § 2, eff. April 1, 2007.           


	§ 2206.252. USES OF FUND.  (a) The money in a pool's fund:                  
		(1)  shall be used to pay liability claims and 
judgments against school districts or junior college districts that 
participate in the pool, not to exceed the limits of the coverage 
provided by the pool;  and
		(2)  may be used to pay the administrative and 
management costs of the pool and the fund, not to exceed the limits 
provided in the plan of operation.
	(b)  On the board's approval, a pool may pay commissions from 
the fund.      

Added by Acts 2005, 79th Leg., ch. 727, § 2, eff. April 1, 2007.           

SUBCHAPTER G. PREMIUM RATES AND COVERAGE;  REINSURANCE


	§ 2206.301. PREMIUM RATES AND COVERAGE LIMITS.  A pool's 
board shall determine the premium rates charged by the pool and pool 
coverage limits to ensure that the pool and the fund are actuarially 
sound.

Added by Acts 2005, 79th Leg., ch. 727, § 2, eff. April 1, 2007.           


	§ 2206.302. GUARANTEED ISSUANCE OF INITIAL COVERAGE;  
RISK MANAGEMENT.  (a) Subject to Subsection (b), a school district 
or junior college district that applies for initial coverage 
through a pool is entitled to that coverage for a period of not less 
than one year, regardless of loss history.  The board may approve a 
longer period for the initial coverage.
	(b)  For a school district or junior college district to 
obtain initial coverage, the board may require that the district 
participate in a risk management appraisal and comply with the 
recommendations resulting from the appraisal.
	(c)  If complying with the recommended risk management 
techniques resulting from the appraisal does not reduce the school 
district's or junior college district's losses during the initial 
coverage period sufficiently to meet the pool's underwriting 
standards, the board may deny the district subsequent coverage 
through the pool.
	(d)  The pool may assess a surcharge to a school district or 
junior college district covered during the initial coverage period 
if the district does not meet the basic underwriting guidelines for 
the pool.

Added by Acts 2005, 79th Leg., ch. 727, § 2, eff. April 1, 2007.           


	§ 2206.303. REINSURANCE.  A board may purchase 
reinsurance for a risk covered through the pool. 

Added by Acts 2005, 79th Leg., ch. 727, § 2, eff. April 1, 2007.