Texas Senate Bill SB531

Texas 2013 - 83rd Regular

Caption

Relating to self-insurance funds established by governmental units.

Impact

The impact of this legislation is significant for governmental units in Texas. By formalizing the ability to purchase reinsurance, these units can better manage their exposure to risk. Furthermore, the bill clarifies that any laws requiring insurance can be satisfied by coverage provided through the self-insurance fund. This means that local governments might have more flexibility in demonstrating compliance with insurance requirements, potentially leading to cost savings and more efficient use of resources.

Summary

SB531 relates to self-insurance funds established by governmental units within Texas. The bill amends existing statutes, specifically Section 2259.031 of the Government Code, to introduce provisions that allow governmental units to purchase reinsurance for risks covered through their self-insurance funds. This amendment aims to enhance the risk management capabilities of these units and provides clarity on how they can comply with existing insurance regulations.

Contention

While the bill received broad support, there could be underlying tensions concerning the implications of self-insurance among governmental units. The provision that allows these units to satisfy insurance requirements through internal funds might raise questions regarding the adequacy of coverage and the potential risks posed if a large claim arises that exceeds the fund’s capabilities. Additionally, there may be concerns that some local governments could misuse self-insurance provisions to cut costs without ensuring adequate risk mitigation.

Notable_points

SB531 passed through both chambers of the Texas Legislature without opposition, indicating a consensus on the need for clearer regulations surrounding self-insurance. Its implementation is set to take effect on September 1, 2013, signifying a prompt adjustment for governmental units. Stakeholders, including local government officials and insurance advocates, may continue to monitor the bill's outcomes to gauge its effectiveness in reducing compliance burdens while maintaining necessary insurance protections.