The following words and terms, when used in this subchapter, have the following meanings, unless the context clearly indicates otherwise:
  (1) Affiliate--A person is defined as an affiliate under §7.202(a)(2) of this title (relating to Definitions).
  (2) Approved PEO--A PEO that has received a certificate of approval from TDI to sponsor a plan.
  (3) Cash--Currency and demand deposits with banks and other financial institutions.
  (4) Client--A person who enters into a professional employer services agreement with a licensed PEO.
  (5) Coemployment relationship--A contractual relationship between a client and a PEO that involves the sharing of employment responsibilities with or allocation of employment responsibilities to covered employees in compliance with the professional employer services agreement and Labor Code Chapter 91, concerning Professional Employment Organizations.
  (6) Commissioner--The commissioner of insurance.
  (7) Contracting regulated entity--An entity regulated by TDI that has contracted with an approved PEO to accept responsibility for the performance of any requirement of this subchapter.
  (8) Controlling person--A person that directly or indirectly and alone or under an agreement with one or more other persons, exercises such a controlling influence over the management or policies of the PEO that it is necessary or appropriate in the public interest or for the protection of the PEO's covered employees that the person be considered to control the PEO. A person is presumed to be a controlling person if:
    (A) the person or a person and members of the person's immediate family directly or indirectly, own, control, or hold with the power to vote 10 percent or more of the voting securities or authority of the PEO; or
    (B) the person holds proxies representing 10 percent or more of the voting securities or authority of the PEO, but is not a corporate officer or director of the PEO.
  (9) Covered employee--An individual having a coemployment relationship with a PEO and a client.
  (10) Dependent--A person eligible to enroll in a plan because of the person's relationship to a covered employee.
  (11) Fiduciary--To the extent not inconsistent with the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §1002, concerning Definitions, a person is a plan fiduciary to the extent that the person:
    (A) exercises any discretionary authority or discretionary control with respect to management of the plan, or exercises any authority or control with respect to management or disposition of plan assets; or
    (B) has any discretionary authority or discretionary responsibility in the administration of the plan.
  (12) Health status-related factor--Health status; medical condition, including both physical and mental illnesses; claims experience; receipt of health care; medical history; genetic information; evidence of insurability, including conditions arising out of acts of domestic violence; and disability, to the extent not inconsistent with ERISA, 29 U.S.C. §1182, concerning Prohibiting Discrimination Against Individual Participants and Beneficiaries Based on Health Status.
  (13) Organizational documents--With respect to the plan and trust, the contracts, articles, bylaws, agreements, plan documents, trust agreements, or other documents or instruments describing the rights and obligations of:
    (A) the PEO, its clients and coemployees; and
    (B) the plan sponsor, its plan, plan trustees, administrators, and participants.
  (14) Participant--A covered employee or dependent enrolled in a plan, to the extent not inconsistent with ERISA, 29 U.S.C. §1002 and §1144, concerning Other Laws.
  (15) Person--An individual, corporation, partnership, association, joint stock company, trust, or unincorporated organization, or a similar entity or a combination of the listed entities acting in concert. The term does not include a securities broker while performing no more than a function that is usual and customary for a securities broker.
  (16) Professional employer organization or PEO--A business entity that offers professional employer services, as defined in Labor Code Chapter 91.
  (17) Plan--A self-funded employee health benefit plan established under Labor Code Chapter 91.
  (18) Qualified financial institution--An institution that:
    (A) is organized or, in the case of a United States branch or agency office of a foreign banking organization, licensed under the laws of the United States or any state of the United States; and
    (B) is regulated, supervised, and examined by a federal or state authority that has regulatory authority over banks and trust companies.
  (19) Reserves--A liability representing plan benefit obligations that have been incurred, whether known or unknown.
  (20) TDI--The Texas Department of Insurance.
  (21) TDLR--The Texas Department of Licensing and Regulation.
  (22) Third party administrator--A person that holds a certificate of authority under Insurance Code Chapter 4151, Third Party Administrators.
  (23) Trust--A trust established under Texas Property Code Title 9, Subtitle B, and ERISA, 29 U.S.C. §1103, concerning Establishment of Trust.
  (24) Trustee--A person defined as a trustee under Texas Property Code Title 9, Subtitle B, to the extent not inconsistent with ERISA as provided in ERISA, 29 U.S.C. §1144, concerning Other Laws.
  (25) Ultimate controlling person--A person that is not controlled by another person.

Source Note: The provisions of this §13.513 adopted to be effective May 17, 2016, 41 TexReg 3479