Under Texas law, certain large, private companies can self-insure for workers’ compensation claims, while retaining the protection of the Texas Workers’ Compensation Act for the company and for its employees. To qualify, a company must have a minimum workers’ compensation insurance unmodified manual premium of $500,000 and meet other requirements subject to annual review:
- Be a private employer with operations in Texas;
- Have an estimated unmodified manual insurance premium of at least $500,000 in Texas, or at least $10,000,000 nationwide;
- Present audited financial statements;
- Possess qualifying Credit/Debt ratings:Dun & Bradstreet – 3A1 or better or Standard & Poor’s – BBB or better orMoody’s Investor Services Baa or better;
- Present a qualifying Tangible Net Worth to Long Term Debt ratio of 1.5 to 1, with minimum Tangible Net Worth of $5 million;
- Post of a minimum security deposit of $300,000;
- Post of excess insurance in the amount of $5 million per occurrence;
- Submit “Application for Certificate of Authority” to SIR;
- Pay $1,000 of a non-refundable application fee.
Among the corporations that are self-insured in the State of Texas are FedEx Freight, Inc., The Procter & Gamble Company, VF Corporation. So you got the idea…