Texas Mutual's corporate governance structure

Texas Mutual's Commitment

As a mutual insurance company, Texas Mutual is solely owned by its policyholders. Good faith stewardship of policyholder assets is, therefore, central to our mission. To that end, we are committed to and governed by the highest standards of integrity.

Governance Structure

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; oversees CEO evaluation, compensation and succession planning; and reviews committee job descriptions); 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.
  • A Code of Conduct for directors, officers and employees is expressed in the Company’s Bylaws and 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.
  • We have a zero tolerance policy for internal fraud and a Fraud Issues Referral Committee staffed by senior executives to review any matters reported through the anonymous reporting hotline or otherwise disclosed to the Company.
  • 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 Internal Audit Department reports directly to 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:

  • Audits
  • Examinations
  • Financial Condition
  • Dividends
  • Investments
  • Reserves

Insurer Market Conduct Surveillance and Examination

General Incorporation and Corporate Governance:

  • Company Formation
  • Governing Documents
  • Management of the Company

Mutual Insurance Company Regulations:

  • Organization
  • Rates
  • Dividends
  • Reinsurance
  • Surplus Requirements
  • Annual Reporting
  • Fees and Taxes

Policy Provisions and Forms

Rate Regulations:

  • Rate Standards and Filings
  • Rate Administration
  • Underwriting Guidelines
  • Reporting

Health Care Network Regulations

Enforcement

DWC Oversight and Enforcement

Regular Carrier Performance Reviews

On-site Audits

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

Attorney Fees

Coverage Reporting and Cancellation

Dispute Resolution