What is a Texas Administrator or Service Company for a Workers’ Compensation SIG Bond
Know what this bond is for and how to obtain it!
As stated in Chapter 407A of the Labor Code, an association of five or more employers who are unincorporated may form a Worker’s Compensation Self-Insured Group (SIG), subjected to the approval of the Commissioner of Insurance.
The group will need to be issued a Certificate of Approval to be recognized as such. In order to procure one from the Commissioner, the group will need to fulfill certain requirements, and one of which is a surety bond posted by the group’s Administrator or Service Company.
The surety bond’s Principal will be the Worker’s Compensation Self-Insured Group’s Administrator or Services Company.
Each Worker’s Compensation Self-Insured Group is required to appoint an Administrator in order to manage their daily activities.
They are also permitted, but not required, to appoint a Services Company. The Services Company’s duties are as follows:
- Claims adjustment
- Safety engineering
- Compilation of statistics and the preparation of premium, loss, and tax reports
- Preparation of other required self-insurance reports
- Development of members’ assessments and fees
- Administration of a claim fund
The bond will serve as an assurance that the Administrator and Services Company will strictly abide by the provisions of Chapter 407A of the Labor Code, Chapter 4151 of the Insurance Code, and all rules and regulations that govern them.
What are the bond amounts?
The Administrator is required to post a $250,000 fidelity bond.
The Services Company is required to post a $250,000 fidelity bond plus a $250,000 performance bond.
Know more about its bond costs by getting your FREE quote here!
What are the Workers’ Compensation Self-Insured Group bond conditions?
- The bond should be issued by a surety bond company that is licensed in the State of Texas such as Surety Bond Authority
- The bond should be made payable to the State
- The bond will be used by the State in case a claim arises due to, but not limited to, the Administrator or Service Company’s fraudulent acts, misconduct, inability of the said Principals to fulfill their duties and obligations, or violate the provisions of the Code
How can I obtain these bonds?
The first step is to apply for the said bond.
Once we have received your application, we will immediately process it. We will then guide you through the next step of the bond process which is prequalification.
An underwriter will assess your financial history, job performance history, and credit score. Once done, we will execute the bond, complete the Administrator or Service Company for a Workers’ Compensation SIG Bond form (FIN464), then send you the surety bond.
Other Workers’ Compensation Self-Insured Group (SIG) Certificate of Approval Forms
- Completed Worker’ Compensation SIG application form (FIN465)
- Completed Worker’ Compensation SIG Employer Membership form for each member (FIN467)
- Completed Workers Compensation Group Self-Insurance Coverage Acknowledgement of Indemnity Agreement (FIN404)
- Workers Compensation SIG Application Checklist (FIN466)
For more information about your bond requirements, contact us now!