✅Relating to discontinuing group self-insurance coverage and dissolving the Texas self-insurance group guaranty fund and trust fund under the Texas Workers’ Compensation Act

✅ SB 264: Phasing Out an Outdated Self-Insurance Program

What it says it does:
SB 264 ends Texas’s group self-insurance program for workers’ compensation, a system that once let businesses in the same industry pool funds to cover employee injuries.

What it actually changes:
It stops the Insurance Commissioner from approving any new self-insurance groups after September 1, 2025. The last remaining Guaranty Fund and Trust Fund must submit a plan to wind down operations and distribute leftover money, then the funds and their board will be permanently dissolved.

Who is pushing for it:
Sen. Charles Perry authored the bill. Witness lists show support from the Texas Cotton Ginners’ Association, the Texas Cotton Ginners’ Trust, the Insurance Council of Texas, and the Texas Department of Insurance.

Who benefits:
The Cotton Ginners’ Trust receives the final payout from the fund. Private insurance companies benefit as small and mid-size employers move back into the commercial insurance market. The Department of Insurance gains efficiency by closing an inactive program.

Who gets left out or exposed:
Small businesses that might have wanted to form new groups in the future lose that option. Workers technically lose a backup fund that once paid claims if a group collapsed, though few are affected because nearly all groups have already shut down.

Why this matters long term:
This bill clears an old system off the books and shifts all workers’ comp coverage back to the private market. It also concentrates final oversight authority in the Insurance Commissioner, which makes the cleanup faster but less transparent.

What to watch next:
Keep an eye on how remaining funds are distributed and whether the Commissioner’s office issues a public closing report. Future legislatures may look at this model as a precedent for phasing out other low-use programs.

Bottom line:
SB 264 is a straightforward cleanup bill that winds down a nearly defunct insurance structure. It’s a rare case where Texas ends a program rather than expanding one, but transparency in the final payout should still be watched.

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