TEXAS DEPARTMENT OF INSURANCE Division of Workers' Compensation Self-Insurance Regulation MS-60 7551 Metro Center Dr., Ste 100 Austin, Texas 78744-1645 (512) 804-4775 FAX (512) 804-4776 www.tdi.texas.gov SURETY BOND for Certified Self-Insurance Liabilities KNOW ALL PERSONS BY THESE PRESENTS, THAT WE a Name of Certificate Holder (Principal) Bond Number (State) corporation with its principal place of business in the City of (City) , State (Name of Surety) of (State) , as Principal, and ,a (State) corporation, authorized to do business in Texas, as Surety, are held and firmly bound unto the Commissioner of the Division of Workers' Compensation for the Obligations and Liabilities of the Principal as a Certified Self-Insurer under the Texas Workers' Compensation Act in the sum of (Written Amount) Dollars ($ (Decimal Amount) ), lawful money of the United States, for the the payment of which sum we bind ourselves, our successors and assigns, jointly and severally, firmly by these presents. In this Bond, these terms have the following meanings: 1. 2. 3. 4. 5. 6. 7. "Act" refers to the Texas Workers' Compensation Act; Texas Labor Code, Title 5, Subtitle A. "Rules" refers to the adopted administrative rules of the Texas Department of Insurance, Division of Workers' Compensation. "Commissioner" refers to the Commissioner of the Division of Workers' Compensation. "Division" refers to the Division of Workers' Compensation. "Bond" means this Surety Bond and all riders and amendments thereto accepted by the Commissioner in accordance with the terms hereof. "Penal Sum" refers to the dollar amount of this Bond. "Security Deposit" refers to the security (Surety Bond, irrevocable letter of credit, cash, or negotiable securities of the United States or Texas) provided by the Principal to the Commissioner to guarantee its Obligations and Liability. "Texas Certified Self-Insurer Guaranty Association" refers to the quasi-governmental entity governed by Subchapter G, Chapter 407, Texas Labor Code. "Declaration of Impairment" refers to the certification by the Division that a Certified Self-Insurer is impaired in accordance with the Act. "Bond Call" refers to the written demand by the Commissioner to secure the release of this Bond's proceeds. 1 of 8 8. 9. 10. DWC-210(Rev.1/06) American LegalNet, Inc. www.FormsWorkFlow.com SURETY BOND Bond Number 11. "Bond Draw" refers to a partial payment by the Surety on the Penal Sum of this Bond in accordance with the terms of this Bond. 12. "Cancellation" refers to the point in time at which the Principal and Surety are no longer incurring Obligations and Liabilities under this Bond. 13. "Termination" refers to the full release of all Surety responsibility under this Bond. 14. "Obligations and Liabilities" means the amount equal to the sum of the amount of the liabilities for the payment of outstanding workers' compensation claims, including claims incurred but not yet reported, and the amount necessary to provide for the payment of the administration of those claims, including legal costs and expenses. 15. "Impaired Employer" means a Certified Self-Insurer: 15.1. who has suspended payment of compensation as determined by the Division; 15.2. who has filed for relief under bankruptcy laws; 15.3. against whom bankruptcy proceedings have been filed; or 15.4. for whom a receiver has been appointed by a court of this state. 16. "Principal" refers to the Certified Self-Insurer and all entities included on all of the self-insurers' Certificates of Authority. WHEREAS, in accordance with the provisions of the Act and Rules, the Principal has elected to selfinsure, and made application for, or received from the Division, a Certificate of Authority to Self-Insure; and WHEREAS, the Principal is required to furnish proof satisfactory to the Commissioner of its ability to self-insure and to assure that all workers' compensation Obligations and Liabilities incurred by the Principal under the Act are promptly met. NOW THEREFORE, the conditions of this Bond or obligation are such that if the Principal shall pay and furnish compensation, pursuant to the terms, provisions and limitations of the Act, then this Bond shall not be liable for those liabilities, which have been paid by the Principal. FURTHERMORE, it is understood and agreed that: 1. Term of This Bond This Bond shall be continuous in term and shall remain in full force and effect unless terminated in the manner provided herein. This Bond and the Obligations and Liabilities in this Bond, shall otherwise remain and continue in full force and effect so long as the liability of the Principal as a self-insurer exists under the Act. DWC-210(Rev.1/06) 2 of 8 American LegalNet, Inc. www.FormsWorkFlow.com SURETY BOND Bond Number 2. Scope of This Bond's Coverage The Surety undertakes and agrees that the obligation of this Bond shall cover and extend to all Obligations and Liabilities of the Principal, as a self-insurer under the Act to the extent of the Penal Sum herein named, without regard to specific injuries, date or dates of injuries, happenings, or events. Obligations and Liabilities are deemed hereby to be incurred on the date an injury is sustained by an employee of the Principal. Limitation of Liability on This Bond The aggregate liability of the Surety shall not exceed the Penal Sum in any event except as expressly stated in this Bond. Cancellation of This Bond 4.1. Scope of Cancellation - This Bond shall secure the payment of all Obligations and Liabilities incurred by the Principal before the effective date of Cancellation. Cancellation of this Bond does not alter or limit: 4.1.1. The Term of this Bond or 4.1.2. The responsibilities of the Surety under this Bond or 4.1.3. The Obligations and Liabilities incurred by the Principal before the effective date of Cancellation. 4.2. Cancellation by Surety - The Surety may cancel this Bond by the Commissioner receiving written notice of Cancellation from the Surety 60 days before the requested effective date of Cancellation. The Commissioner will acknowledge the written notice and promptly notify the Principal of the pending Cancellation date. 4.3. Automatic Cancellation ­ This bond is automatically cancelled on the effective date of the following events: 4.3.1. The Division declares the Principal an Impaired Employer, or 4.3.2. The Division revokes the Principal's Certificate of Authority to Self-Insure, or 4.3.3. The Division does not renew the Principal's Certificate of Aut