2005 Texas Insurance Code CHAPTER 2208. TEXAS PUBLIC ENTITY EXCESS INSURANCE POOL

INSURANCE CODE

CHAPTER 2208. TEXAS PUBLIC ENTITY EXCESS INSURANCE POOL

SUBCHAPTER A. GENERAL PROVISIONS


	§ 2208.001. DEFINITIONS.  In this chapter:                                  
		(1)  "Board" means the board of trustees of the pool.                         
		(2)  "Fund" means the Texas public entity excess 
insurance fund.            
		(3)  "Insurance" means liability insurance or workers' 
compensation insurance.
		(4)  "Pool" means the Texas public entity excess 
insurance pool.            
		(5)  "Public entity" means one or more municipalities 
that have formed an insurance pool under Chapter 791, Government 
Code.

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


	§ 2208.002. POOL NOT ENGAGED IN BUSINESS OF 
INSURANCE.  (a) Except as provided by Subsection (b), the pool is 
not engaged in the business of insurance under this code or other 
laws of this state, and the department has no jurisdiction over the 
pool.
	(b)  The pool is subject to Chapter 541 and Subchapter D, 
Chapter 38.        

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

SUBCHAPTER B. CREATION OF POOL


	§ 2208.051. CREATION OF POOL.  (a) The Texas Public 
Entity Excess Insurance Pool is created on the written agreement of 
the presiding officers of 25 or more public entities in this state.
	(b)  The pool provides excess liability and workers' 
compensation insurance coverage to a public entity and the entity's 
officers and employees as provided by this chapter.

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


	§ 2208.052. PARTICIPATION IN POOL.  A public entity is 
entitled to coverage from the pool if the entity:
		(1)  submits a complete application;                                          
		(2)  provides other relevant information required by 
the pool;              
		(3)  meets the underwriting guidelines established by 
the pool;  and        
		(4)  pays the premiums required for the coverage.                             

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

SUBCHAPTER C. BOARD OF TRUSTEES


	§ 2208.101. ADMINISTRATION OF POOL;  BOARD 
MEMBERSHIP.  (a) A board of trustees shall administer the pool.
	(b)  The board is composed of the members of the governing 
board of an association that:
		(1)  on September 2, 1987, had been providing pooled 
self-insurance in this state for more than five years;  and
		(2)  has as the association's members the public 
entities that entered into the written agreement under Section 
2208.051.
	(c)  Board members shall represent members of the pool.                        

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


	§ 2208.102. COMPENSATION.  A board member is not entitled 
to compensation for the member's service on the board.

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


	§ 2208.103. OFFICERS;  MEETINGS.  (a) Each individual who 
serves as an officer of the governing board of the association 
described by Section 2208.101(b) serves as an officer of the board.
	(b)  The board shall hold meetings at the call of the 
presiding officer and at times established by the board's rules.
	(c)  A majority of the board members constitutes a quorum.                     

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


	§ 2208.104. GENERAL POWERS AND DUTIES OF BOARD.  (a) In 
addition to other duties provided by the plan of operation, the 
board shall:
		(1)  approve contracts other than excess insurance 
contracts issued to public entities by the pool;
		(2)  adopt premium rate schedules and policy forms for 
the pool;  and       
		(3)  receive service of summons on behalf of the pool.                        
	(b)  The board may:                                                            
		(1)  adopt necessary rules, including rules to 
implement this chapter;      
		(2)  delegate specific responsibilities to the pool 
manager;  and           
		(3)  amend the plan of operation to ensure the orderly 
management and operation of the pool.

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


	§ 2208.105. IMMUNITY OF BOARD MEMBERS FROM CERTAIN 
LIABILITIES.  A board member 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 against a public entity 
covered by the pool.   

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

SUBCHAPTER D. PLAN OF OPERATION


	§ 2208.151. TIME FOR CREATION OF PLAN OF OPERATION.  Not 
later than the 30th day after the date the pool is created, the 
board shall meet to prepare a detailed plan of operation for the 
pool. 

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


	§ 2208.152. CONTENTS OF PLAN OF OPERATION.  (a) Subject 
to the requirements of this chapter, the plan of operation must 
include:
		(1)  the organizational structure of the pool, the 
board's method of procedure and operation, and a summary of the 
method for managing and operating the pool;
		(2)  a description of the financial arrangements 
necessary to cover the initial expenses of the pool and estimates, 
supported by statistical data, of the amounts of those 
contributions or other financial arrangements;
		(3)  underwriting guidelines and procedures for 
evaluating risks;           
		(4)  procedures for purchasing reinsurance;                                   
		(5)  methods, procedures, and guidelines for:                                 
			(A)  establishing premium rates for and maximum 
limits of excess coverage available from the pool;  and
			(B)  managing and investing the fund;                                        
		(6)  procedures for processing and paying claims;                             
		(7)  methods and procedures for defraying losses and 
expenses of the pool;  and
		(8)  guidelines for nonrenewal of coverage.                                   
	(b)  The plan of operation may include any matter relating to 
the organization and operation of the pool or to the pool's 
finances.

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

SUBCHAPTER E. OPERATION OF POOL


	§ 2208.201. GENERAL POWERS AND DUTIES OF POOL.  (a) The 
pool shall:       
		(1)  issue insurance coverage to each public entity 
entitled to coverage under this chapter;
		(2)  collect premiums for coverage issued or renewed by 
the pool;           
		(3)  process and pay valid claims;  and                                       
		(4)  maintain detailed data regarding the pool.                               
	(b)  The pool may:                                                             
		(1)  enter into contracts;                                                    
		(2)  purchase reinsurance;                                                    
		(3)  cancel or refuse to renew coverage;  and                                 
		(4)  perform any other act necessary to implement this 
chapter, the plan of operation, or a rule adopted by the board.

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


	§ 2208.202. POOL MANAGER.  (a) The board shall appoint a 
pool manager who serves at the pleasure of the board, and the board 
shall supervise the pool manager's activities.
	(b)  The pool manager is entitled to receive compensation as 
authorized by the board.

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


	§ 2208.203. GENERAL POWERS AND DUTIES OF POOL 
MANAGER.  (a) The pool manager shall manage and conduct the affairs 
of the pool under the general supervision of the board and shall 
perform any other duties as directed by the board.
	(b)  In addition to any other duties provided by the board, 
the pool manager shall:
		(1)  receive and pass on applications for insurance 
coverage from the pool; 
		(2)  negotiate contracts for the pool;  and                                   
		(3)  prepare, and submit to the board for approval, 
proposed policy forms for coverage from the pool.
	(c)  The pool manager may refuse to renew the coverage of a 
public entity insured by the pool based on the guidelines included 
in the plan of operation.

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


	§ 2208.204. PERSONNEL.  (a) The pool manager shall employ 
or contract with persons necessary to assist the board and the pool 
manager in implementing the powers and duties of the pool.
	(b)  The board must approve:                                                   
		(1)  the compensation paid to a pool employee;  and                           
		(2)  a contract made with a person under this section.                        

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


	§ 2208.205. PERFORMANCE BOND AUTHORIZED.  The board may 
require an employee or a person with whom the pool manager contracts 
under Section 2208. 204 to execute a bond in an amount determined by 
the board.  The bond must be payable to the board and conditioned on 
the faithful performance of the employee's or other person's duties 
to the pool. 

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


	§ 2208.206. IMMUNITY OF EMPLOYEES AND CONTRACTORS FROM 
CERTAIN LIABILITIES.  An employee or a person with whom the pool 
manager contracts under Section 2208.204 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 against a public entity 
covered by the pool.   

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


	§ 2208.207. OFFICE;  RECORDS.  (a) The pool shall 
maintain the pool's principal office in Austin, Texas.
	(b)  Records, files, and other documents and information 
relating to the pool must be maintained in the pool's principal 
office.

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

SUBCHAPTER F. TEXAS PUBLIC ENTITY EXCESS INSURANCE FUND


	§ 2208.251. FUND CREATION;  MANAGEMENT.  (a) On creation 
of the pool, the board shall create the Texas public entity excess 
insurance fund.
	(b)  The fund is composed of:                                                  
		(1)  premiums paid by public entities for coverage 
provided by the pool;    
		(2)  proceeds from bonds and other money received by 
the pool to cover the expenses of the fund;
		(3)  investments of the fund and money earned from 
those investments;  and  
		(4)  any other money received by the pool.                                    
	(c)  The pool manager shall manage the fund under the general 
supervision of the board.  The fund manager, under the general 
supervision of the board, shall manage and invest the money in the 
fund in the manner provided by the plan of operation.
	(d)  Money earned by the investment of money in the fund must 
be deposited in the fund or reinvested for the fund.

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


	§ 2208.252. USES OF FUND.  (a) Administrative expenses of 
the pool may be paid from the fund.
	(b)  Money in the fund may not be used to pay:                                 
		(1)  punitive damages;                                                        
		(2)  a fine or penalty imposed for a violation of:                            
			(A)  a statute;                                                              
			(B)  an administrative rule or regulation;  or                               
			(C)  an order or ordinance of a public entity;  or                           
		(3)  a claim under excess insurance coverage until all 
benefits payable under any other underlying policy or 
self-insurance covering the claim or judgment are exhausted.

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


	§ 2208.253. DEPOSITORY.  (a) The board may select one or 
more banks to serve as depository for money in the fund.
	(b)  A depository bank must execute a bond or provide other 
security before the pool manager may deposit fund money in the bank 
in an amount that exceeds the maximum amount secured by the Federal 
Deposit Insurance Corporation.  The bond or other security must be 
in an amount sufficient to secure the excess amount of the deposit.

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

SUBCHAPTER G. POOL COVERAGE


	§ 2208.301. SCOPE OF COVERAGE.  (a) Except as provided by 
Subsection (b), under the excess insurance coverage, the pool shall 
pay any portion of a claim against a public entity and the entity's 
officers and employees that:
		(1)  exceeds $1 million;  and                                                 
		(2)  is finally determined or settled or is included in 
a final judgment of a court.
	(b)  The amount paid by the pool under this section may not 
exceed the amount the board determines is actuarially sound for the 
pool.
	(c)  The pool may participate in evaluating or defending a 
claim made under the insurance coverage.

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


	§ 2208.302. BASIS OF COVERAGE.  The pool may provide 
excess insurance coverage on a claims-made basis or an occurrence 
basis.

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


	§ 2208.303. PUNITIVE DAMAGES NOT COVERED.  Excess 
insurance coverage provided by the pool may not include coverage 
for punitive damages.

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


	§ 2208.304. RATES AND LIMITS OF COVERAGE.  (a) To ensure 
that the pool is actuarially sound, the board shall:
		(1)  set the premium rates charged;  and                                      
		(2)  determine the maximum limits of insurance coverage 
provided.           
	(b)  The pool manager, for the board's consideration, shall:                   
		(1)  collect and compile statistical data relating to 
the insurance coverage provided by the pool, including relevant 
loss, expense, and premium data and other information;
		(2)  prepare the proposed premium rate schedules for 
the approval of the board;  and
		(3)  prepare the maximum limits of insurance coverage.                        
	(c)  The board shall periodically reexamine the rate 
schedules and the maximum limits of insurance coverage as 
conditions change.

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


	§ 2208.305. USE OF PUBLIC MONEY FOR POOL COVERAGE 
AUTHORIZED.  A public entity may use the entity's money to pay any 
contributions or premiums required by the pool to purchase excess 
insurance coverage from the pool.

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


	§ 2208.306. COVERAGE PERIOD.  A public entity that 
accepts coverage provided by the pool shall maintain that coverage 
for at least 35 calendar months following the month in which the 
pool issued the coverage.

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


	§ 2208.307. NONRENEWAL OF COVERAGE.  The pool may refuse 
to renew the insurance coverage of a public entity that fails to 
comply with the pool's underwriting or risk management guidelines.

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


	§ 2208.308. SUBSEQUENT COVERAGE.  (a) A public entity 
that voluntarily discontinues insurance coverage provided by the 
pool may not subsequently obtain coverage from the pool for at least 
36 calendar months following the month in which the entity 
discontinues the coverage.
	(b)  A public entity whose insurance coverage is not renewed 
by the pool is not eligible to subsequently apply for coverage 
during the 11 calendar months following the month in which the pool 
gives written notice of nonrenewal.

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


	§ 2208.309. PAYMENT OF CLAIMS AND JUDGMENTS.  (a) If 
money in the fund would be exhausted by the payment of all final and 
settled claims and final judgments during a fiscal year, the pool 
shall prorate the amount paid to each person having the claim or 
judgment.
	(b)  If the amount paid by the pool is prorated under this 
section, each person described by Subsection (a) shall receive an 
amount equal to the percentage that the amount owed to that person 
by the pool bears to the total amount owed, outstanding, and payable 
by the pool.
	(c)  The public entity incurring the original liability 
shall pay the remaining amount that is due and unpaid to a person 
who receives a prorated payment under this section.

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