(a) A licensee or registered manufacturer shall not perform any activity authorized by its license or registration under §9.6 of this title (relating to License Categories, Container Manufacturer Registration, and Fees) unless insurance coverage required by this section is in effect. LP-gas licensees, registered manufacturers, or applicants for license or manufacturer registration shall comply with the minimum amounts of insurance specified in Table 1 of this section or with the self-insurance requirements in subsection (i) of this section, if applicable. Registered manufacturers are not eligible for self-insurance. Before AFS grants or renews a manufacturer registration, an applicant for a manufacturer registration shall submit the documents required by paragraph (1) of this subsection. Before AFS grants or renews a license, an applicant for a license shall submit either:
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  (1) An insurance Acord™ form; or any other form approved by the Texas Department of Insurance that has been prepared and signed by the insurance carrier containing all required information. The forms must be issued by an insurance company authorized or accepted by the Texas Department of Insurance; or
  (2) properly completed documents demonstrating the applicant's compliance with the self-insurance requirements set forth in subsection (j) of this section.
(b) Each licensee or registered manufacturer shall file LPG Form 999 or other written notice with AFS at least 30 calendar days before the cancellation of any insurance coverage. The 30-day period commences on the date the notice is actually received by AFS.
(c) A licensee or applicant for a license that does not employ or contemplate employing any employee to be engaged in LP-gas related activities in Texas may file LPG Form 996B in lieu of filing a workers' compensation insurance form, including employer's liability insurance, or alternative accident and health insurance coverage. The licensee or applicant for a license shall file the required insurance form with AFS before hiring any person as an employee engaged in LP-gas related work.
(d) A licensee, applicant for a license, or an ultimate consumer that does not operate or contemplate operating a motor vehicle equipped with an LP-gas cargo container or does not transport or contemplate transporting LP-gas by vehicle in any manner may file LPG Form 997B in lieu of a motor vehicle bodily injury and property damage insurance form, if this certificate is not otherwise required. The licensee or applicant for a license shall file the required insurance form with AFS before operating a motor vehicle equipped with an LP-gas cargo container or transporting LP-gas by vehicle in any manner.
(e) A licensee, registered manufacturer, or applicant for a license or manufacturer registration that does not engage in or contemplate engaging in any LP-gas activities that would be covered by completed operations or products liability insurance, or both, may file LPG Form 998B in lieu of a completed operations and/or products liability insurance form. The licensee, registered manufacturer, or applicant for a license or manufacturer registration shall file the required insurance form with AFS before engaging in any operations that require completed operations and/or products liability insurance.
(f) A licensee, registered manufacturer, or applicant for a license or manufacturer registration that does not engage in or contemplate engaging in any operations that would be covered by general liability insurance may file LPG Form 998B in lieu of filing a general liability insurance form. The licensee, registered manufacturer, or applicant for a license or manufacturer registration shall file the required insurance form with AFS before engaging in any operations that require general liability insurance.
(g) A licensee may protect its employees by obtaining accident and health insurance coverage from an insurance company authorized to write such policies in this state as an alternative to workers' compensation coverage. The alternative coverage shall be in the amounts specified in Table 1 of this section.
(h) A state agency or institution, county, municipality, school district, or other governmental subdivision shall meet the requirements of this section for workers' compensation, general liability, and/or motor vehicle liability insurance. The requirements may be met by filing LPG Form 995 with AFS as evidence of self-insurance, if permitted by the Texas Labor Code, Title 5, Subtitle C, and Texas Natural Resources Code, §113.097.
(i) Self-insurance requirements.
  (1) This subsection applies to a licensee's or a license applicant's motor vehicle bodily injury and property damage liability coverage and general liability coverage. A licensee or license applicant shall not elect to self-insure for more than 12 consecutive months, exclusive of the six-month period for which a letter of credit is required to remain in effect pursuant to paragraph (4) of this subsection.
  (2) A licensee or license applicant desiring to self-insure shall file with AFS a properly completed LPG Form 28, Notice of Election to Self-Insure and a properly completed LPG Form 28-A, Bank Declarations Regarding Irrevocable Letter of Credit. The licensee or license applicant shall attach to the LPG Form 28-A any documentation necessary to show that the bank issuing the irrevocable letter of credit meets the requirements in paragraph (5)(E) of this subsection.
  (3) The irrevocable letter of credit shall be in an amount that is no less than the total of all minimum insurance coverage amounts required by the Commission in the Table in subsection (a)of this section for every coverage for which the licensee or license applicant seeks to self-insure.
  (4) The irrevocable letter of credit shall be valid until the expiration date shown on LPG Form 28, which shall be no sooner than six months after the earlier of either:
    (A) the expiration date of the license; or
    (B) the effective date of insurance coverage.
  (5) A letter of credit commemorated by LPG Form 28-Ashall:
    (A) be irrevocable during its term;
    (B) be payable to the Commission or Commission's designee in part or in full as directed by the Commission in compliance with an order from state or federal court;
    (C) include a guarantee from the bank that issues the letter of credit (irrevocable confirmed credit);
    (D) not apply to the licensing requirements for worker's compensation insurance including employers liability insurance or alternative accident/health insurance; and
    (E) be issued by a federally insured bank authorized to do business in the State of Texas which meets or exceeds the following requirements:
      (i) Bank management shall attest that the bank is not subject to any outstanding written enforcement action, agreement, order, capital directive, or prompt corrective action directive issued by a state or federal bank regulatory agency;
      (ii) The bank shall be "well capitalized" as defined in federal bank regulatory statutes with:
        (I) a total risk-based capital ratio of 10% or greater;
        (II) a Tier 1 risk-based capital ratio of 6% or greater; and
        (III) a leverage ratio of 5% or greater.
      (iii) The bank shall have received a satisfactory or better rating at its most recent Community Reinvestment Act (CRA)examination by a federal bank regulatory agency;
      (iv) The bank management shall attest that the full amount of the letter of credit, when added to other indebtedness of the licensee or applicant for license to the bank, is within the bank's regulatory lending limit; and
      (v) The issuing bank shall be in good standing with the State Comptroller's Office regarding the payment of franchise taxes and other obligations to the state.
  (6) In addition to the requirements of §9.36 of this title (relating to Report of LP-Gas Incident/Accident), within 30 days of the occurrence of any incident or accident involving the business activities of a self-insured LP-gas licensee that results in property damage or loss and/or personal injuries, the licensee shall notify AFS in writing of the incident. The licensee shall include in the notification a list of the names and addresses of any individuals known to the licensee who may have suffered losses in the incident. The licensee shall also provide written notice to all such individuals of the licensee's status as being self-insured and of the expiration date of the licensee's letter of credit.
(j) Each licensee or registered manufacturer shall promptly notify AFS of any change in insurance coverage or insurance carrier by filing a properly completed Acord™ form; other form approved by the Texas Department of Insurance that has been prepared and signed by the insurance carrier containing all required information; or documents demonstrating the applicant's compliance with the self-insurance requirements set forth in subsection (i) of this section. Failure to promptly notify AFS of a change in the status of insurance coverage or insurance carrier may result in an enforcement action and an administrative penalty.

Source Note: The provisions of this §9.26 adopted to be effective February 1, 2001, 26 TexReg 947; amended to be effective September 10, 2001, 26 TexReg 6883; amended to be effective March 31, 2003, 28 TexReg 2741; amended to be effective September 1, 2005, 30 TexReg 4810; amended to be effective November 12, 2007, 32 TexReg 8122; amended to be effective December 24, 2012, 37 TexReg 9913; amended to be effective January 6, 2020, 45 TexReg 127