Tex.
Labor Code Section 407A.458
Effect of Insolvency of Group
(a)
On determining that a group has become insolvent, the commissioner shall secure release of the surety bond or security deposit required under Section 407A.053 (Financial Requirements) and shall promptly estimate:(1)
the amount of additional funds needed to supplement the bond or security deposit; and(2)
the assets of the insolvent group available to pay all incurred compensation liabilities.(b)
If the bond or security deposit and the available assets of the insolvent group are insufficient to cover all of the group’s incurred compensation liabilities, the commissioner shall direct the insolvent group to immediately assess its members to cover all incurred liabilities under a schedule approved by the commissioner.(c)
If the assessments under Subsection (b) will be insufficient to cover the incurred liabilities, the commissioner shall estimate the additional funds necessary to cover the incurred liabilities for benefit compensation and related administration expenses for the insolvent group. On receipt of the commissioner’s estimate, the board shall provide from the trust fund the additional funds needed for benefit compensation and related administrative expenses for the insolvent group.(d)
Disbursements from the trust fund under Subsection (c) shall be replenished:(1)
if within the 10-year funding period of the trust fund, by adjusting the next year’s schedule of assessments from groups; or(2)
if beyond the initial 10-year funding period, by assessment of all groups.(e)
If, after application of Subsections (b)-(d), the amount available in the trust fund is still insufficient, the board shall assess all groups for the remaining deficiency.(f)
The commissioner may exempt a group from assessment under this section on a determination that the payment of the assessment would render the group insolvent.(g)
The commissioner may, on a finding of insolvency, commence a delinquency proceeding for the purpose of liquidating, rehabilitating, reorganizing, or conserving a group. Such a group shall be considered an insurer for purposes of Article 21.28, Insurance Code, and an insurance company for purposes of 11 U.S.C. Section 109. The conservator, receiver, or other statutory successor of a group shall coordinate with the board in the furtherance of the purposes of this subchapter.
Source:
Section 407A.458 — Effect of Insolvency of Group, https://statutes.capitol.texas.gov/Docs/LA/htm/LA.407A.htm#407A.458 (accessed May 25, 2024).
