SB1455

A combined limit, not an automatic 2.7% charge. The sum of the surcharge rates under Insurance Code Chapter 255 and Labor Code Chapters 403 and 405 may not exceed 2.7% of the applicable gross premiums. Previously, the corresponding insurer limits were 0.6%, 2% and 0.1%, which also totaled 2.7%. The act substitutes a combined limit for those separate limits; regulators still set rates based on the statutory funding needs and available funds. It does not raise the aggregate ceiling or require every component to be charged at 2.7%. The premium base continues to include modified annual premiums before deductible credits. Final law, sections 10, 15, 17, 19 and 23; Former 0.6% limit; Former 2% insurer limit; Former 0.1% research limit.

Who pays and who can recover the cost. The insurer surcharge provisions expressly allow recovery by including the surcharge as an expense in a required rate filing or charging policyholders. That is permission, not a requirement that every policyholder receive an identical added charge. Certified self-insurers and self-insurance groups also move to surcharge terminology and linked assessments. Certified self-insurers retain the separate 2% aggregate-base limit in Section 407.103(a), with their base calculated from prior-year claim liabilities and administration expenses multiplied by 1.02. Group assessments use premiums for retained risk and exclude premiums collected for excess insurance. Existing governmental-entity exclusions in the administration and research provisions remain. Final law, sections 10, 15, 20 and 23–30; Self-insurer base and limit; Group assessment framework.

Collection and funding safeguards. The act updates the comptroller’s collection authority, account deposits, annual rate setting, the 45-day rate-notification rule and late-rate adjustments to include surcharges. Existing annual or semiannual insurer payment rules and the $2,000 prior-year liability condition for requiring semiannual payments are retained. Certified self-insurers’ fee and surcharge remain due on the 60th day after certification and annual renewal. Late payment remains an administrative violation for self-insurers and groups, and amounts owed remain collectible after withdrawal or termination. The subsequent injury fund’s backup assessment becomes a surcharge while retaining the existing 120%-of-projected-unfunded-liabilities standard for the next biennium. Group examination-cost references are also updated. These are funding and administration changes, not an increase in an injured worker’s benefit amount. Final law, sections 3–10, 14–19, 21 and 25–30; Prior backup-fund standard; Prior self-insurer collection rules.

Important Senate substitute. The introduced bill did not contain the final comptroller-authority amendment or the special treatment of these surcharges under Insurance Code Chapter 281. The Senate committee substitute added both. The final law treats the specified workers’ compensation surcharges as fees paid in Texas for that chapter’s comparison of Texas and other states’ insurer charges, despite the usual exclusion for surcharges recoverable directly from policyholders. The Senate-passed, House committee and final versions retain the substitute’s operative text; no floor amendments are listed. Introduced; Senate substitute; Senate-passed; House committee; Final law, sections 4 and 12; Version index; Amendment index; Insurer tax-comparison rule; Ordinary surcharge exclusion.

Compare the published text versions in the official text index. A change is not attributed to a specific amendment here without a verified record.

Regulators gain flexibility to allocate funding within the combined insurer ceiling. Insurers gain explicit ways to recover the specified charges, so employers buying coverage may bear those costs through pricing or direct charges. The act alone does not establish the actual annual rates, what any employer will pay or whether total insurance prices rise or fall. It changes how regulation is funded rather than rewriting workers’ benefit eligibility. Final law.

The April 11 fiscal note for the Senate substitute anticipates no significant state or local fiscal impact and assumes implementation costs can be absorbed with existing resources. The earlier March 26 note predicted an unquantified increase in Texas retaliatory taxes—charges based on how other states treat Texas insurers—but evaluated the introduced version before the new Chapter 281 treatment was added. That earlier prediction is not a final-law revenue estimate. Neither note establishes actual policyholder costs. The act makes no appropriation. Substitute fiscal note; Earlier introduced-version fiscal note; Final law.