(a) LP-gas licensees or applicants for license shall
comply with the minimum amounts of insurance specified in Table 1
of this section or with the self-insurance requirements in subsection
(i) of this section. Before LP-Gas Operations grants or renews a license,
an applicant shall submit either:
Attached Graphic
  (1) An insurance Acord™ form; or any other form
approved by the Texas Department of Insurance that has been prepared
and signed by the insurance carrier containing all required information.
The forms must be issued by an insurance company authorized or accepted
by the Texas Department of Insurance; or
  (2) properly completed documents demonstrating the
applicant's compliance with the self-insurance requirements set forth
in subsection (i) of this section.
(b) Each licensee shall file LPG Form 999 or other
written notice with LP-Gas Operations at least 30 calendar days before
the cancellation of any insurance coverage. The 30-day period commences
on the date the notice is actually received by LP-Gas Operations.
(c) A licensee or applicant for a license that does
not employ or contemplate employing any employee to be engaged in
LP-gas related activities in Texas may file LPG Form 996B in lieu
of filing a workers' compensation, including employer's liability
insurance, or alternative accident and health insurance coverage.
The licensee or applicant for a license shall file the required insurance
form with LP-Gas Operations before hiring any person as an employee
engaged in LP-gas related work.
(d) A licensee, applicant for a license, or an ultimate
consumer that does not operate or contemplate operating a motor vehicle
equipped with an LP-gas cargo container or does not transport or contemplate
transporting LP-gas by vehicle in any manner may file LPG Form 997B
in lieu of a motor vehicle bodily injury and property damage insurance
form, if this certificate is not otherwise required. The licensee
or applicant for a license shall file the required insurance form
with LP-Gas Operations before operating a motor vehicle equipped with
an LP-gas cargo container or transporting LP-gas by vehicle in any
manner.
(e) A licensee or applicant for a license that does
not engage in or contemplate engaging in any LP-gas operations that
would be covered by completed operations or products liability insurance,
or both, may file LPG Form 998B in lieu of a completed operations
and/or products liability insurance form. The licensee or applicant
for a license shall file the required insurance form with LP-Gas Operations
before engaging in any operations that require completed operations
and/or products liability insurance.
(f) A licensee or applicant for a license that does
not engage in or contemplate engaging in any operations that would
be covered by general liability insurance may file LPG Form 998B in
lieu of filing a general liability insurance form. The licensee or
applicant for a license shall file the required insurance form with
LP-Gas Operations before engaging in any operations that require general
liability insurance.
(g) A licensee may protect its employees by obtaining
accident and health insurance coverage from an insurance company authorized
to write such policies in this state as an alternative to workers'
compensation coverage. The alternative coverage shall be in the amounts
specified in Table 1 of this section.
(h) A state agency or institution, county, municipality,
school district, or other governmental subdivision shall meet the
requirements of this section for workers' compensation, general liability,
and/or motor vehicle liability insurance by filing LPG Form 995 with
LP-Gas Operations as evidence of self-insurance, if permitted by the
Texas Labor Code, Title 5, Subtitle C, and Texas Natural Resources
Code, §113.097.
(i) Self-insurance requirements.
  (1) This subsection applies to a licensee's or a license
applicant's motor vehicle bodily injury and property damage liability
coverage and general liability coverage. A licensee or license applicant
shall not elect to self-insure for more than 12 consecutive months,
exclusive of the six-month period for which a letter of credit is
required to remain in effect pursuant to paragraph (4) of this subsection.

  (2) A licensee or license applicant desiring to self-insure
shall file with LP-Gas Operations a properly completed LPG Form 28,
Notice of Election to Self-Insure (created 11/02) and a properly completed
LPG Form 28-A, Bank Declarations Regarding Irrevocable Letter of Credit
(created 11/02). The licensee or license applicant shall attach to
the LPG Form 28-A any documentation necessary to show that the bank
issuing the irrevocable letter of credit meets the requirements in
paragraph (5)(E) of this subsection.
  (3) The irrevocable letter of credit shall be in an
amount that is no less than the total of all minimum insurance coverage
amounts required by the Commission in the Table in subsection (a)
of this section for every coverage for which the licensee or license
applicant seeks to self-insure.
  (4) The irrevocable letter of credit shall be valid
until the expiration date shown on LPG Form 28, which shall be no
sooner than six months after the earlier of either:
    (A) the expiration date of the license; or
    (B) the effective date of insurance coverage.
  (5) A letter of credit commemorated by LPG Form 28-A
shall:
    (A) be irrevocable during its term;
    (B) be payable to the Commission or Commission's designee
in part or in full as directed by the Commission in compliance with
an order from state or federal court;
    (C) include a guarantee from the bank that issues the
letter of credit (irrevocable confirmed credit);
    (D) not apply to the licensing requirements for worker's
compensation insurance including employers liability insurance or
alternative accident/health insurance; and
    (E) be issued by a federally insured bank authorized
to do business in the State of Texas which meets or exceeds the following
requirements:
      (i) Bank management shall attest that the bank is not
subject to any outstanding written enforcement action, agreement,
order, capital directive, or prompt corrective action directive issued
by a state or federal bank regulatory agency;
      (ii) The bank shall be "well capitalized" as defined
in federal bank regulatory statutes with:
        (I) a total risk-based capital ratio of 10% or greater;
        (II) a Tier 1 risk-based capital ratio of 6% or greater;
and
        (III) a leverage ratio of 5% or greater.
      (iii) The bank shall have received a satisfactory or
better rating at its most recent Community Reinvestment Act (CRA)
examination by a federal bank regulatory agency;
      (iv) The bank management shall attest that the full
amount of the letter of credit, when added to other indebtedness of
the licensee or applicant for license to the bank, is within the bank's
regulatory lending limit; and
      (v) The issuing bank shall be in good standing with
the State Comptroller's Office regarding the payment of franchise
taxes and other obligations to the state.
  (6) Within 30 days of the occurrence of any incident
or accident involving the business activities of a self-insured LP-gas
licensee that results in property damage or loss and/or personal injuries,
the licensee shall notify LP-Gas Operations in writing of the incident.
The licensee shall include in the notification a list of the names
and addresses of any individuals known to the licensee who may have
suffered losses in the incident. The licensee shall also provide written
notice to all such individuals of the licensee's status as being self-insured
and of the expiration date of the licensee's letter of credit.
(j) Each licensee shall promptly notify LP-Gas Operations
of any change in insurance coverage or insurance carrier by filing
a properly completed revised Acord™ form; other form approved
by the Texas Department of Insurance that has been prepared and signed
by the insurance carrier containing all required information; or documents
demonstrating the applicant's compliance with the self-insurance requirements
set forth in subsection (i) of this section. Failure to promptly notify
LP-Gas Operations of a change in the status of insurance coverage
or insurance carrier may result in an enforcement action and an administrative
penalty.


Source Note: The provisions of this §9.26 adopted to be effective February 1, 2001, 26 TexReg 947; amended to be effective September 10, 2001, 26 TexReg 6883; amended to be effective March 31, 2003, 28 TexReg 2741; amended to be effective September 1, 2005, 30 TexReg 4810; amended to be effective November 12, 2007, 32 TexReg 8122; amended to be effective December 24, 2012, 37 TexReg 9913