Day: June 5, 2013

Brownsville ISD Board To Reconsider HealthSmart Lawsuit?

ham

It’s As Easy As Suing A Ham Sandwich!

The Brownsville Independent School District Board of Trustees approved a motion last night to reconsider implementation of a lawsuit against HealthSmart.  Controversy over PPO discounts, allegedly promised but not delivered,  have simmered for the past several years. A previous Board of Trustees instituted a lawsuit against HealthSmart, only to subsequently drop it after a new School Board was sworn in. Now, once again, another new Board of Trustees is in place (Board No. 3) and the HealthSmart matter is once more front and center.

Elections seem to have consequences, especially in deep South Texas where local politics are taken seriously – a blood sport.

See Brownsville Herald story here: http://m.brownsvilleherald.com/news/local/article_dbbd11f2-ce55-11e2-93d8-0019bb30f31a.html?mode=jqm

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Texas Passes Captive Law

By   | May 31, 2013

Texas has passed a law allowing for the formation of pure captive insurance companies within the state.

Companies doing business in the state are now authorized to self-insure, or provide reinsurance for, its own and its affiliate’s operational risks such as employee benefit plans, liability insurance and worker’s compensation insurance.

The new law allows for companies to open its own carriers in the state, but does not permit the formation of independent captive insurance carriers in Texas. However, the Texas Department of Insurance (TDI) may approve foreign captives to transfer domiciles to the state on a case-by-case basis.

In an analysis of the bill, the state’s House wrote, “CSSB 734 would create a healthier business climate for corporations that have or would like to have a domestic captive insurance company. When a Texas-based corporation must form its captive in another state, in incurs additional expenses and administrative burdens. For example, other states often require captives to engage locally based management companies, hold a minimum number of board meetings within their first jurisdiction each year, and appoint a local resident to the board.”

In order to obtain a certificate of authority from the TDI, the pure captive must have significant operations and keep its principal office and records in Texas, and hold at least one board of directors meeting in the state each year.

Captives will be taxed on half of one percent of a captive’s premium receipts and other forms of revenue from its annual insurance policies. The maximum tax would be half of one percent on a captive’s taxable premium receipts and other forms of revenue from annual insurance policies. The annual minimum captive tax is set $7,500 and the annual maximum tax is $200,000.

The captive will have to maintain a capital and surplus of at least $250,000 in order to operate.

“Allowing domestic captives to form in Texas would attract new business to the state and would help retain existing Texas companies. In addition to lowered taxes for re-domesticated firms, the bill would attract high paying jobs, including attorneys, accountants, actuaries, and their support personnel. It would also result in new revenue for the state through the insurance premium tax,” said the House analysis.

Texas captives would not be allowed to participate in any insolvency pools or funds in the state