Relating to discontinuing group self-insurance coverage and dissolving the Texas self-insurance group guaranty fund and trust fund under the Texas Workers' Compensation Act.

Contracts

• SIG Participation Agreements: Legal counsel must immediately review existing agreements with your Group Administrator. Specifically, analyze "surplus distribution" and "dissolution" clauses to determine if the refund from the Guaranty Fund belongs to the Group’s general reserves or must be passed through to individual member businesses.
• Lending Covenants: If your business relies on SIG coverage to satisfy bank loan covenants, verify that the dissolution of the Guaranty Fund (the backstop) does not trigger a "material adverse change" in your coverage status.

Hiring/Training

• Risk Management: Risk managers must be briefed that the "safety net" for SIG insolvency is being abolished. The reliance on Joint and Several Liability among group members is now absolute without a state fund buffer.

Reporting & Record-Keeping

• Proof of Solvency: To qualify for the fund distribution, your Group must be designated as a "qualified group." You must ensure your Group Administrator maintains up-to-date financial filings with the Texas Department of Insurance (TDI) to avoid an insolvency determination prior to the payout date.
• Distribution Receipt: Finance teams must track the receipt of liquidated funds for tax purposes, distinguishing between a return of premium (often not taxable) versus a gain.

Fees & Costs

• Positive Cash Flow (One-Time): This bill triggers a payout. The Guaranty Fund and Trust Fund assets will be returned to qualified groups.
• Risk Cost: While there are no new fees, the *contingent liability* cost increases. If a fellow member of your SIG defaults, the financial burden on your company is higher due to the absence of the Guaranty Fund.