(a) The membership of the Texas Certified Self-Insurer Guaranty Association (the Association) shall consist of all certified self-insurers (members) that hold a certificate of authority to self-insure issued by the Commissioner of Workers' Compensation of the Texas Department of Insurance, Division of Workers' Compensation (the Commissioner). Only certified self-insurers may be members of the Association.
  (1) Membership shall begin on the date the certificate of authority to self-insure takes effect and each member shall designate a representative to receive notices from the association.
  (2) The members of the Association shall meet annually at a place and time designated by the Board of Directors. At the Annual Meeting, the members shall conduct any necessary and proper business.
  (3) The association shall have a president and vice-president and may have other officers as necessary to conduct the business of the association.
  (4) Special meetings of the association may be called by the president of the association on 30 days notice to the members of the association.
  (5) A majority of the members present either in person or by proxy at any meeting of the association shall constitute a quorum.
(b) The business of the Association shall be managed by the Board of Directors (the Board).
  (1) The Board shall consist of three members of the Association, one member designated by the Commissioner, and the Public Insurance Counsel. The members of the Board shall hereinafter be referred to as Directors. Each Director representing members of the Association must be a current employee of a member of the Association.
  (2) A quorum of the board is three voting directors. No business may be conducted by the board unless a quorum of its members is present at the meeting. An action by the board requires the concurring vote of three directors. A motion to recommend an application for certification that fails to receive the concurring vote of three directors constitutes disapproval of the application.
  (3) The board shall elect a chair and vice-chair annually. The chair and vice-chair must be voting members of the board of directors. The board may also elect other officers. The chair shall preside at all meetings of the board. In the absence of the chair, the vice-chair shall preside at the meeting.
  (4) The board shall meet at least once during each calendar quarter. Additional meetings may be held as necessary to conduct the business of the association. Meetings shall be held at the call of the chair or upon written request to the chair by any three directors of the board.
  (5) The board shall have the authority to hire an executive director to conduct the day-to-day operations of the association. The board may also authorize the hiring of additional staff as necessary. The executive director serves at the pleasure of the board. The employment or removal of an executive director requires the affirmative vote of at least three members of the board. The salaries of the executive director and staff shall be set by the board and be commensurate with the salaries paid by state agencies.
  (6) The board shall have the authority to contract with others for any services necessary for the operation of the association, including administration of the trust fund and administration of claims of impaired self-insurers.
  (7) A director shall abstain from voting on any matter in which he or she has, directly or indirectly, a personal, private, or business interest. As used in this rule, personal, private, or business interest includes being an officer, director, or affiliate of a person or entity subject to an action by the board, or directly or indirectly having a material financial interest in a matter before the board.
  (8) The directors shall serve without compensation. But, the directors shall be reimbursed for any reasonable expenses incurred in carrying out the duties of the board.
(c) The members of the Association shall elect directors to represent the Association and shall elect officers of the Association annually. The terms for the elected directors will begin on January 1 of each year. The Association shall annually elect one director for a term of three years. Directors may serve consecutive terms on the Board.
  (1) Prior to the election, the President shall appoint from the membership of the Association a Nominations Committee of at least three members, which shall be responsible for nominating Officers and Directors to be elected by the Association. The Board shall provide a method by which nominations may also be made by members of the Association. Any nominee must be a current employee of a member of the Association.
  (2) Each member of the association may cast one vote for each director or officer to be elected by the association.
  (3) If a vacancy occurs in any office elected by the association, including a director representing the members of the association (by death, resignation, or otherwise), the president, or in the event of a vacancy in the office of the president, the vice president, shall appoint a committee of at least three members which shall select a successor to fill the vacancy for the unexpired term. A vacancy occurs when a term expires, a director resigns, dies, is adjudicated mentally incompetent, or is convicted of a felony. If a director is convicted of a felony, and cannot be removed by statute, the director is prohibited from voting on any matter before the board.
(d) The Board shall levy assessments against each member necessary to create and maintain the Texas Certified Self-Insurer Guaranty Trust Fund (the Trust Fund). Assessments shall be levied in amounts that will provide at least $1 million, but not more than $2 million. For purposes of assessments, "payments" means all income benefits paid in the preceding reported calendar year pursuant to obligations as a certified self-insurer, or in the case of a first-year member of the Association, made by the member's carrier on behalf of the member, pursuant to the Texas Workers' Compensation Act. All earned income of the trust fund is retained by the trust fund and may be used by the Board of Directors as provided in subsection (f)(1) of these Bylaws.
  (1) The amount assessed against each individual member shall be based on the ratio of the payments made by the member to the total payments made by or on behalf of all certified self-insurers.
  (2) If the security deposit of an impaired certified self-insurer (or former self-insurer) is not adequate to cover its self-insured liabilities for workers' compensation benefits, the funds required to pay the additional benefits shall be paid from the Trust Fund and reimbursed to the Trust Fund through assessment. The Board shall assess those currently unimpaired self-insurers and former self-insurers that were members of the Association for any time during the five years immediately preceding the date of assessment (the "members subject to assessment"), in accordance with this section. The Board shall provide for the calculation of the estimated total amount necessary to pay all benefits and to reimburse the Trust Fund (the "estimated total assessment"). The estimated total assessment shall be assessed by the Board. The amount assessed against each of the members subject to assessment shall be based on the ratio of payments by a member to total payments.
  (3) When all liabilities of an impaired certified self-insurer (or former self-insurer) have been paid, and the trust fund has been reimbursed, excess funds may be held in lieu of or in reduction of an Administrative Fee, paid to the Division of Workers' Compensation in lieu of or in reduction of a regulatory fee, used by the Board to pay administrative expenses of the Association, or otherwise used for the benefit of the members of the Association.
  (4) The Board of Directors shall have the authority to collect from the impaired certified self-insurer (or former self-insurer) any amount that has been assessed against other self-insurers to pay the liabilities of the impaired certified self-insurer (or former self-insurer). The board may use any appropriate means for collection of the assessment up to and including filing suit against the impaired member or former member. Continued failure to pay the assessment may result in a recommendation to the Commissioner that the member's certificate of self-insurance be revoked.
  (5) If the Trust Fund is terminated for any reason, the funds then held in the Trust Fund shall be paid to the Division of Workers' Compensation to be used for the administration of the Workers' Compensation Act.
(e) The association shall mail notice of any assessment to the designated representative of each member or former member of the association. Each member or former member shall pay all assessments not later than 30 days after it is notified of the assessment. Late payments shall accrue interest at the rate of 1.5% per month on any unpaid balance. The board may use any appropriate means for collection of the assessment up to and including filing suit against the member or former member and continued failure to pay the assessment may result in a recommendation to the Commissioner that the member's certificate of self-insurance be revoked.
Cont'd...