Texas Mutual’s commitment to integrity is supported by a governance structure consistent with and modeled on corporate best practices and principles. The elements of that structure include:
- The Board has established a standing Nominating and Governance Committee that studies and advises the Board on the principles of corporate governance, largely guided by Corporate Governance Standards of the N.Y.S.E.
- Other standing Board committees include the Audit Committee (oversees the Company’s financial condition and risk management process; holds private sessions with internal and independent auditors); the Executive Committee (sets the Board’s agenda; nominates Board officers and members of the Nominating and Governance Committee; and oversees President and CEO evaluation, compensation and succession planning); the Investment Committee (oversees Company’s investments, investment policies, and retirement plans); and the Operations Committee (oversees Underwriting, rate making, Policyholder Services, Human Resources, and IT).
- Each standing committee has a Board-approved charter or job-description, which includes a list of director qualifications relevant to that committee.
- The President and CEO and each of his or her direct reports makes an annual attestation that neither he nor she, nor any person on his or her staff, has failed to report anything of value from a vendor as described in the Employee Handbook.
- Each director files a conflict of interest disclosure statement annually and also whenever a potential conflict of interest arises. The Nominating and Governance Committee reviews these statements and conducts any necessary inquiries.
- Directors, officers and employees receive regularly scheduled ethics training.
- Elected directors are subject to term limits of two full six-year terms.
- The Board’s Audit Committee oversees an anonymous whistleblower hotline that allows confidential reporting of questionable accounting or auditing matters.
- The Company has a zero tolerance policy for internal fraud and a Corporate Ethics Review Committee staffed by senior executives to review any matters reported through the anonymous reporting hotline or otherwise disclosed to the Company. Any such matters are reported to the Chair of the Audit Committee.
- Bylaw amendments require a supermajority vote of directors.
- The Company diligently complies with the National Association of Insurance Commissioners’ Model Audit Rule (the insurance industry’s counterpart to the Sarbanes-Oxley Act), which ensures that the Audit Committee and senior management are accountable for the accuracy of the Company’s financial statements.
- All directors are independent and regularly meet in private session without management.
- The General Counsel delivers a report to the Board at each meeting and has semi-annual private sessions with the Board.
- The General Auditor reports directly to, and has semi-annual private sessions with, the Board.
- A nationally recognized accounting firm conducts an annual independent audit.
- Annual policyholder meetings attended by the Board, senior staff and agents provide for open communication.
Extensive Regulatory Oversight
In addition to the Company-tailored governance structure and commitments described above, Texas Mutual, as a workers’ compensation insurer, is highly regulated and subject to the dual regulatory oversight and enforcement regimes of the Texas Department of Insurance (TDI) and the Division of Workers’ Compensation (DWC). The lists below shows the subject matter over which the TDI and the DWC have jurisdiction.
TDI Oversight and Enforcement
Financial Solvency Regulations:
- Financial Condition
Insurer Market Conduct Surveillance and Examination
General Incorporation and Corporate Governance:
- Company Formation
- Governing Documents
- Management of the Company
Mutual Insurance Company Regulations:
- Surplus Requirements
- Annual Reporting
- Fees and Taxes
Policy Provisions and Forms
- Rate Standards and Filings
- Rate Administration
- Underwriting Guidelines
Health Care Network Regulations
DWC Oversight and Enforcement
Regular Carrier Performance Reviews
Medical Review of Preauthorization Decisions
Administrative Violations and Penalties
Claim Investigation and Notification of Benefits
Payment of Income Benefits – Time Standards
Payment of Income Benefits – Amount
Preauthorization of Medical Care
Payment of Medical Benefits – Time Standards
Payment of Medical Benefits – Reimbursement Amount:
- Medical Fee Guidelines
- Dental Fee Guideline
- Acute Inpatient Hospital Fee Guideline
- Ambulatory Surgical Center Fee Guideline
- Hospital Facility Fee Guidelines
- Pharmacy Fee Guideline
Payment of Death and Burial Benefits
Coverage Reporting and Cancellation
- Benefit Review Conferences
- Contested Case Hearings
- Appeals Panel Review
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