LOCAL GOVERNMENT CODE
CHAPTER 119. COUNTY GOVERNMENT LIABILITY INSURANCE POOL
§ 119.001. DEFINITIONS. In this chapter:
(1) "Board" means the board of trustees of the county
government risk management pool.
(2) "Fund" means the county government risk management
fund.
(3) "Plan" means the plan of operation of the county
government risk management pool.
(4) "Pool" means the County Government Risk Management
Pool created under this chapter.
(5) "Volunteer fire department" means a fire
department that is operated on a not-for-profit basis.
Acts 1987, 70th Leg., ch. 149, § 1, eff. Sept. 1, 1987. Amended
by Acts 1995, 74th Leg., ch. 1056, § 1, eff. Aug. 28, 1995.
§ 119.002. CREATION OF RISK MANAGEMENT POOL. (a) On
the adoption of a resolution by the commissioners courts of at least
10 counties in this state, the County Government Risk Management
Pool is created to insure each county in this state that purchases
coverage in the pool against liability for the acts or omissions of
that county and the officials and employees of that county under the
law.
(b) Any county in this state that meets the criteria
established by the pool in its plan of operation may purchase
coverage from the pool. The county may use county funds to pay any
fees, contributions, or premiums required to be a part of the pool
and to obtain coverage through the pool.
Acts 1987, 70th Leg., ch. 149, § 1, eff. Sept. 1, 1987. Amended
by Acts 1993, 73rd Leg., ch. 561, § 4, eff. Aug. 30, 1993.
§ 119.003. ORGANIZATION OF POOL; TEMPORARY BOARD. On
the creation of the pool, each commissioners court adopting a
resolution to create the pool shall select one representative to
meet with the representatives of the other counties adopting
creation resolutions. At the meeting, the representatives shall
adopt guidelines for developing an organizational plan for the pool
and shall select nine persons from their number to serve as a
temporary board of trustees for the pool.
Acts 1987, 70th Leg., ch. 149, § 1, eff. Sept. 1, 1987.
§ 119.004. PLAN OF OPERATION. (a) Within 30 days after
the date the temporary board is selected, the members of the
temporary board shall meet and begin to prepare a detailed plan of
operation for the pool. The plan may include any matters relating
to the organization and operation of the pool and its finances but
must include:
(1) the organizational structure of the pool,
including the number, method of selection, and method of procedure
and operation of the regular board of trustees for the pool;
(2) a summary of the method for managing and operating
the pool;
(3) a description of the fees, contributions, or
financial arrangements necessary to cover the initial expenses of
the pool, with estimates supported by statistical data of the
amounts of those fees, contributions, or other financial
arrangements;
(4) underwriting standards and procedures for the
evaluation of risks, which must provide that any county that
applies shall be provided coverage for an initial period of at least
one year, regardless of that county's loss history;
(5) procedures for the purchase of reinsurance;
(6) procedures for the processing and payment of
claims;
(7) methods, procedures, and guidelines for:
(A) the establishment of premium rates;
(B) the limits of coverage available through the
pool; and
(C) the management and investment of the county
government risk management fund; and
(8) methods and procedures for defraying losses and
expenses of the pool.
(b) The temporary board shall complete the plan within 90
days after the date the temporary board is appointed.
Acts 1987, 70th Leg., ch. 149, § 1, eff. Sept. 1, 1987.
§ 119.005. BOARD OF TRUSTEES. (a) The board of
trustees shall govern, administer, and operate the pool and the
fund.
(b) Within 15 days after the date the plan is completed by
the temporary board, the initial regular board must be selected and
take office as provided by the plan. A person serving on the board
who is a county officer or employee performs board duties as
additional duties of the person's original office or employment. A
member or employee of the board is not liable with respect to any
claims for which coverage is provided by the pool or brought against
any county covered by the pool.
(c) Each member and each employee of the board who has
authority over money in the fund or over money collected or invested
by the pool must execute a bond in an amount determined by the
board, payable to the pool, and conditioned that the person will
faithfully perform the person's duties. The cost of the bond shall
be paid by the pool.
(d) The board shall determine premium rates and coverage
limits to ensure that the pool and the fund are actuarially sound.
(e) The board may purchase reinsurance for any risks covered
by the pool.
(f) The board may employ a fund manager and other persons
necessary to carry out this chapter and the plan. The board may
employ or contract with insurance carriers or other persons for
underwriting, accounting, claims, and other services.
(g) The board may adopt any rules, exercise any powers, and
enter into any contracts necessary to carry out this chapter and the
plan.
Acts 1987, 70th Leg., ch. 149, § 1, eff. Sept. 1, 1987.
§ 119.006. RISK MANAGEMENT FUND. (a) On taking
office, the initial regular board shall create the county
government risk management fund.
(b) The board shall credit to the fund:
(1) fees, contributions, and premiums collected by the
pool;
(2) investments of money in the fund;
(3) interest earned on investments made by the pool;
and
(4) any other income received by the pool from any
sources.
(c) The board shall manage and invest the money in the fund
in the manner provided by the plan. The money in the fund shall be
used to pay liability claims and judgments against participating
counties up to the limits of the coverage provided by the pool.
Money in the fund also may be used to pay the administrative and
management costs of the pool and the fund up to the limits provided
by the plan.
Acts 1987, 70th Leg., ch. 149, § 1, eff. Sept. 1, 1987.
§ 119.007. CERTAIN REQUIREMENTS FOR INITIAL COVERAGE;
SURCHARGE. (a) To obtain coverage during the initial coverage
period, the standards included in the plan may require a county to
participate in a risk management appraisal and to adhere to the
recommendations made in the appraisal. If the recommended risk
management techniques do not sufficiently reduce losses to meet the
pool's underwriting criteria within the initial coverage period,
the county may be denied subsequent coverage by the pool.
(b) A surcharge may be applied to any risk covered during
the initial period if the risk does not meet the basic underwriting
criteria established by the board.
Acts 1987, 70th Leg., ch. 149, § 1, eff. Sept. 1, 1987.
§ 119.008. NOT INSURANCE; BOARD OF INSURANCE LACKS
JURISDICTION. (a) The pool created under this chapter is not
insurance for purposes of the Insurance Code and other laws of this
state.
(b) The State Board of Insurance has no jurisdiction over
the pool or over any other governmental insurance pool created
under The Interlocal Cooperation Act (Article 4413(32c), Vernon's
Texas Civil Statutes).
Acts 1987, 70th Leg., ch. 149, § 1, eff. Sept. 1, 1987.
§ 119.009. PARTICIPATION BY OTHER POLITICAL
SUBDIVISIONS. (a) A political subdivision other than a county
may participate in the County Government Risk Management Pool
established under this chapter.
(b) A political subdivision participating in the pool under
this section is entitled to the same coverage provided to a county
and may participate under the same terms and conditions as a county.
Added by Acts 1993, 73rd Leg., ch. 561, § 5, eff. Aug. 30, 1993.
§ 119.010. CERTAIN COVERAGE AUTHORIZED; DISTRICT
JUDGES. The pool may provide coverage against liability for the
acts or omissions of a district judge whose judicial district is
located, in whole or in part, within the geographic boundaries of a
county participating in the pool that arise in the course and scope
of the judge's official duties as a judge. A county participating
in the pool, a district judge from personal funds, or both the
county and the judge, may pay the additional cost of this coverage.
Added by Acts 1995, 74th Leg., ch. 1056, § 2, eff. Aug. 28, 1995.
§ 119.011. CERTAIN COVERAGE AUTHORIZED; VOLUNTEER FIRE
DEPARTMENTS. The pool may provide coverage against liability for
the acts or omissions of:
(1) a volunteer fire department that contracts with a
county participating in the pool for the provision of fire
protection or fire-fighting equipment under Subchapter A, Chapter
352;
(2) a volunteer for a fire department described by
Subdivision (1), to the extent the acts or omissions arise in the
course and scope of the volunteer's activities as a volunteer for
the fire department; and
(3) a person described by Section 352.004(b).
Added by Acts 1995, 74th Leg., ch. 1056, § 2, eff. Aug. 28, 1995.
§ 119.012. NOTICE OF CANCELLATION OR CHANGE OF
COVERAGE. (a) Except as provided by Subsection (b), cancellation
of coverage for liability provided through the pool under this
chapter other than cancellation for nonpayment of contribution, or
any change to the terms or conditions of the coverage, may not take
effect before the 60th day after the earlier of the date that
written notice of the change is:
(1) delivered to the county judge or presiding officer
of the governing body of each affected county or other political
subdivision; or
(2) mailed, by certified mail, to the county judge or
presiding officer of the governing body of each affected county or
other political subdivision.
(b) Notice is not required for cancellation or a change to
the terms or conditions of the coverage made:
(1) at the request of the affected county or other
political subdivision; or
(2) by mutual agreement of the governing body, or
authorized agent, of the affected county or other political
subdivision and the pool if:
(A) the mutual agreement is evidenced by a
writing; and
(B) not later than the 72nd hour before the
governing body takes formal action with respect to the agreement,
the writing described by Paragraph (A) is provided, electronically
or by certified mail, to the county judge or presiding officer of
the governing body of the political subdivision.
(c) The notice must be printed in at least 12-point
bold-faced type and must specify the reasons for the cancellation
or change.
(d) In the case of cancellation of the coverage, the notice
must state that, on request of the affected county or other
political subdivision, the pool shall refund to the county or
political subdivision the pro rata unearned paid contribution of
the county or political subdivision. This subsection does not
apply if the refund is paid at the time the notice is made.
Added by Acts 1997, 75th Leg., ch. 1419, § 1, eff. Sept. 1, 1997.
§ 119.013. QUALIFICATIONS OF ADMINISTRATOR. The
individual responsible for administration of the pool, whether
employed by the pool or any other entity:
(1) must hold at least a bachelor's degree in a field
relating to insurance, finance, business management, or law or hold
the professional designation of:
(A) Chartered Property Casualty Underwriter
granted by the American Institute for Property and Liability
Underwriters;
(B) Certified Insurance Counselor granted by the
Society of Certified Insurance Counselors; or
(C) Associate in Risk Management granted by the
Insurance Institute of America;
(2) must have at least five years experience in
administration of risk pools, commercial insurance production or
management, or risk management; and
(3) during each calendar year, shall participate in a
minimum of 20 hours of continuing education that:
(A) is acceptable to the board; and
(B) relates to the types of coverage provided by
the pool, risk management, or administration of risk pools.
Added by Acts 1997, 75th Leg., ch. 1419, § 1, eff. Sept. 1, 1997.
§ 119.014. APPLICATION REQUIREMENTS. The requirements
of Section 119.012 shall apply to cancellation of, or any change to
the terms or conditions of, a contractual obligation to indemnify
for liability for the acts or omissions of a county or its officers
and employees provided to any county through any intergovernmental
risk-sharing pool or insurance coverage.
Added by Acts 1997, 75th Leg., ch. 1419, § 1, eff. Sept. 1, 1997.
