1. (a) The upper limit of liability for a contract or policy of excess insurance shall be in the amount required by the director. The minimum amount the director may require is $5 million per accident or occurrence.

2. (b) A contract or policy of excess insurance must be issued by an insurance company authorized by the State of Texas to transact such business and shall include the following provisions:

   1. (1) cancellation requires written notice to the director, return receipt requested or by personal delivery at least 60 days before termination;
   2. (2) nonrenewal requires written notice to the director, return receipt requested or by personal delivery at least 60 days before the end of the policy;
   3. (3) the association must be named as an additional insured on the excess policy and may assume the rights and responsibilities of the self-insurer under the policy when the self-insurer is declared to be impaired; and

   4. (4) all of the following benefits to which the injured employee is entitled under the Act must be applied toward reaching the retention amount:

      1. (A) payments made by the employer;
      2. (B) payments due and owing by the employer;
      3. (C) payments made on behalf of the employer by any form of security as required by the Act or commission rules; and
      4. (D) payments made by the association pursuant to Texas Civil Statutes, Article 8308-3.70.

3. (c) The excess insurance carrier must send a letter to the director certifying:

   1. (1) that the self-insurer has a policy of excess insurance which fully complies with the requirements of this section together with a copy of the declarations page of the policy; or
   2. (2) that the policy will be issued to an applicant upon certification.
4. (d) The self-insurer who elects to cancel or chooses not to renew a policy of excess insurance shall notify the director 60 days prior to the cancellation or termination.

Source Note:The provisions of this §114.5 adopted to be effective January 1, 1993, 17 TexReg 7896.