e-Texas e-Texassmaller smarter faster governmentDecember, 2000
Carole Keeton Rylander
Texas Comptroller of Public Accounts

Recommendations of the Texas Comptroller

Chapter 2: Competitive Government

Privatize the Texas Workers’ Compensation Insurance Fund


The Texas Workers’ Compensation Insurance Fund has made workers’ compensation more available to all Texas employers by providing coverage to small employers and serving as an insurer of last resort. Created by the state government, the fund is a large state asset, with a surplus of approximately $600 million. The state could benefit from this asset and improve the efficiency of the fund by selling it to the highest bidder in a carefully managed auction. Revenue from this sale should be deposited into the state’s constitutionally-created Economic Stabilization (“Rainy Day”) Fund.


Employers want to maintain a healthy, able, experienced workforce, to provide affordable insurance coverage to their employees, and to keep their costs to a minimum. Employees need a workers’ compensation system that creates incentives for safety but provides fair compensation for injuries. And all Texans deserve a system that preserves a healthy climate for doing business and creating jobs.

Texas made sweeping changes in its workers’ compensation system in the late 1980s and early 1990s. Those reforms improved the system enormously, reducing the costs that employers face in purchasing workers’ compensation insurance and improving the benefits available to injured workers. The Texas Workers’ Compensation Insurance Fund, a major component of those reforms, has served as a principal source of insurance for small employers and as an insurer of last resort for many.

The fund is part of a larger system of workers’ compensation in Texas that consists of a state-regulated insurance system that pays medical bills and replaces lost wages for employees with work-related diseases or illnesses. Employers who choose to have insurance may purchase insurance policies from private insurance companies. They can self-insure if they meet the requirements of the Texas Workers’ Compensation Act and are certified by the Texas Workers’ Compensation Commission. If opting for self-insurance, employers have the same rights and responsibilities as employers who buy policies from private insurance companies. If an employer cannot obtain insurance in the voluntary market or self-insure, the fund provides another means of addressing the risk: if two insurance companies have refused to provide coverage to an employer, that employer is deemed part of the “residual market,” and is eligible to obtain insurance from the fund.

The fund plays an important role in the Texas workers’ compensation system by carrying out three important responsibilities in the marketplace:

  1. It acts as a competitive force in the voluntary workers’ compensation insurance market by creating rate competition.
  2. It acts as an insurer of last resort—a place where companies that cannot obtain or afford private workers’ compensation insurance can turn. The fund provides workers’ compensation coverage to businesses that cannot find coverage in the voluntary insurance market.
  3. It ensures the availability of workers’ compensation coverage by providing coverage to small employers who formerly had difficulty finding coverage in Texas.[1]

The fund operates like a private insurance company and is regulated by the Texas Department of Insurance and the Texas Workers’ Compensation Commission.

A major role of the fund is to provide insurance to small employers. Since the size of the employer’s payroll partly determines the amount of the premium, the amount of premiums tends to indicate the relative number of employees. Almost three-quarters of the fund’s policies carried premiums of less than $5,000 as of December 31, 1999, indicating that the fund’s portfolio consists primarily of small and medium-sized companies. The average premium for those policies was $1,800. About 95 percent were for amounts below $25,000.[2]

The reforms of a decade ago made workers’ compensation insurance so much more affordable and available that the residual market has declined from 12 percent of the market in 1993 to less than 0.4 percent as of July 2000. The cost of premiums for such policies accounted for only $11 million out of the $266 million worth of policies in the fund’s portfolio.[3]

The Surplus

An important measure of the fund’s performance is its “combined ratio,” which is the sum of three other ratios: the ratio of losses to premiums, the ratio of loss adjustment expenses to premiums, and the ratio of company expenses to premiums. The combined ratio shows whether an insurance company is making or losing money from its underwriting. A company losing money on underwriting may be making enough money on its investments to cover the losses and still make a profit. The fund’s combined ratio for 1999 was 106.8, an increase from 104.8 in 1998.[4] Although this ratio appears lower than those of some competing carriers of workers’ compensation insurance, such comparisons should be made only with caution, since the fund does not pay federal corporate income taxes, a factor which would alter several elements in the combined ratio. The fluctuating combined ratio, together with the fund’s success in its investment activities, is a key factor in accumulating the large surplus.

For the past decade, the Texas Workers’ Compensation Insurance Fund has served as Texas’ insurer of last resort and has developed a surplus of $606 million according to its last annual report.[5] The surplus exceeds current expectations of future claims, and also provides added protection for changes in general economic circumstances, the workers’ compensation insurance markets or in the number and nature of claims. Even so, the surplus is prompting a new look at the fund, as policymakers ask whether the state could make better use of an underutilized state asset.

On May 24, 2000, a subcommittee of the Texas House Committee on Business and Industry held a hearing concerning transferring the surplus to the State’s General Revenue Fund. As noted in the hearing, Chapter 316 of the Government Code provides that funds with an unobligated balance in excess of that necessary to fulfill an agency’s statutory duties are to be identified and appropriated to the General Revenue Fund.[6] In fact, the fund is not a state agency, except as recognized in statutes or by the courts, and its surplus is not a residue of unspent appropriations.

A direct transfer of the surplus for other uses may be precluded by the fund’s enabling statute and could trigger income tax liability for the fund.[7] Since the surplus is the amount remaining after the fund’s liabilities have been subtracted from its assets, it serves as added protection for policyholders if unexpected losses render the reserves inadequate. Large increases in loss patterns could cause the surplus to dwindle. Reducing the surplus would tend to reduce the added protection that the fund’s policyholders enjoy.

A State-owned Enterprise

Beyond the fact of the surplus, however, it is appropriate to ask whether the state should even be operating a workers’ compensation fund, since its status as a state-owned enterprise removes it from some of the disciplines shaping the operations of other insurance companies. The core missions of government are not generally considered to include operating profit-making enterprises.

The fund belongs to the State of Texas. An examination of the statute creating the fund concluded, among other things, that the “policyholder insureds do not have a controlling or ownership interest in the TWCIP surplus.”[8] Bonds issued to create the fund were not backed by the credit of the state, and they were repaid by a maintenance tax surcharge imposed by the Legislature.[9] State law specifically provided that the tax could be passed through to policyholders. However, the court of appeals ruled that the maintenance tax surcharge was a franchise tax imposed for the privilege of doing business in the Texas.[10] The tax was returned through refunds of the maintenance tax to insurance companies, who were obligated to pass them through to their policyholders once the fund was capitalized.[11]

Although the fund earns income from its investments, including that portion of its assets that constitutes the fund’s surplus, the state receives no financial benefit from the fund, unlike the owner of an asset in the private sector who receives dividends or interest. In this sense, the fund and its surplus constitute an underused state asset. The state’s benefit from the fund is its implementation of a public policy that encourages employers to carry workers’ compensation insurance and that seeks to protect workers from financial losses ensuing from injuries on the job. However, the current arrangement is not the only way these objectives can be promoted, nor is it necessarily the best way.

The Possibility of Privatization

Other states, such as Michigan and Nevada, have found ways to redeploy the assets of their state funds. One possible solution is privatization of all or part of the fund.

Clearly, insurance against workers’ compensation claims can be a profitable business. The very success of the fund, especially given the near-elimination of the residual market, raises the question of whether the state still needs to own and control the fund, rather than selling it to one or more new owners in the private sector.

Like other organizations, governments perform best when focusing on core missions. Organizations achieve their greatest efficiency and effectiveness when they concentrate their goals, attention, resources, and energy on well-defined core missions and functions. Many successes in turning around failing businesses or strengthening healthy ones involve pruning back activities that do not contribute to the business’s central concept or relate to the company’s strengths. Government can be stronger and more efficient at the things it must do if it pulls back from those things it need not do.

That privately owned firms are more efficient than state-owned enterprises has become accepted globally as a principle of public policy.[12] As a recent summary of more than 60 studies of privatization in a variety of industries and many different countries noted, “We know that privatization ‘works,’ in the sense that divested firms almost always become more efficient, more profitable, increase their capital investment spending, and become financially healthier.”[13] Such lessons now are being applied to workers’ compensation funds.

The Michigan Experience

Michigan provides a model for the successful privatization of a state fund. The Michigan Accident Fund had a history reaching back to 1912, when workers’ compensation was first established in the state.[14] After many years of controversy over the fund’s status as a state agency, the Michigan Legislature moved to privatize the fund in 1993.[15]

As privatization approached, various figures were cited on the size of the Accident Fund’s excess reserves, but according to A.M. Best Co., a compiler and publisher of economic data on the insurance industry, the accident fund had a “policyholders surplus” of $110.4 million at the end of 1993.[16] Forecasting the fund’s sale price also proved difficult; the generally-prevailing estimate of the likely sales price was $250 million.[17]

Michigan’s method for privatizing the Accident Fund was essentially an auction. The state contracted with the investment banking firm Barclays de Zoete Wedd to advise the state on privatization.[18] Working with Barclays, the fund’s executives offered the fund through auction.[19] Blue Cross/Blue Shield of Michigan won the right to buy the accident fund with a bid of $291 million, with an additional $3.9 million as its equivalent tax payment. (The state eventually received $255 million from the sale.) The employees of the fund were given a 60-day period to put together a bid matching that of the winner, but their bid was unsuccessful.[20]

At the time of the sale, the state maintained a facility for distributing “assigned risks” among all firms writing workers’ compensation insurance in the state. The purpose of the state’s Accident Fund was to provide insurance for small companies; that is, companies who would pay small premiums. The state’s facility, operating in conjunction with the fund and all insurance companies participating in the workers’ compensation insurance market in Michigan, served as an insurer of last resort. The legislation authorizing privatization required the company acquiring the fund’s assets and liabilities to continue to provide workers’ compensation insurance to small employers in the same manner as the Accident Fund had during the year before the transfer.[21]

A Solution for Texas

Privatization would allow the state to realize the benefit of the assets developed by the fund while maintaining its commitment to the public policy goals served by the fund under state ownership. The debate over the size of the surplus would become immaterial, since privatization would not directly affect the size of the surplus. Instead, the board and management of the fund could determine its ideal size based on incentive-driven business judgment.

Privatization would relieve the state of the operation of a profitable insurance company, an activity not among the state’s core functions. It would allow the fund to benefit from the efficiencies resulting from management fully driven by market structures and incentives. It would give the fund greater access to capital markets and, if acquired by another insurance company, could provide the fund with benefits from the synergies of operating in the context of a unified group of insurance companies.

Privatization would eliminate the debate over who is entitled to the surplus in the fund, since the surplus would be part of the capital structure sold with it. So long as the state fund holds a large surplus, the temptation to remove it and use it for other purposes will remain, even though it could undermine the fund’s financial structure. Yet the state could benefit from better use of this large asset.

Opponents of privatization may contend that a privatized fund would no longer enjoy the exemption from federal corporate income taxes. The exemption has benefited the fund by allowing it to build a large surplus. However, neither the people of Texas nor the state’s treasury directly benefit from the fund’s tax exemption. For them, the benefits are indirect and remote. Meanwhile, the state cannot benefit from this state asset because the surplus remains captive within the fund.

Some believe that the fund will not be an attractive investment so long as it remains the insurer of last resort. However, the residual market has now declined to such a small part of the entire market (less than 0.4 percent) and even of the fund’s portfolio (about 1.2 percent) that this assumption must be reexamined, especially in light of the surplus. Because of the reforms of a decade ago, particularly the effective deregulation of premium rates, the probability of new growth in the residual market is small. If the small number of residual market cases presents an obstacle to privatization, the state nevertheless could benefit from selling the fund and creating a new allocation mechanism to distribute the small number of residual market cases among the insurers participating in the Texas market.

How the Fund Could Be Privatized

The Legislature could begin the process of privatizing the fund by adopting a statute authorizing privatization and providing the necessary legal framework. The statute should specify:

  1. the objectives of privatization as ensuring that state government focuses on its core missions and objectives; improving the efficiency of the fund as a provider of affordable workers’ compensation insurance to Texas employers; and maximizing the proceeds received by the state.
  2. the entity within government that would conduct all aspects of the sale.
  3. the conditions under which the sale would be conducted.
  4. permanent provisions governing the conditions under which the fund’s successor would operate.
  5. open and equitable criteria for qualifying winners, a reasonable timetable, and clear standards for performance.[22]

Phase 1: Outside Advisers

After the enactment of the legislation, the agency authorized to conduct the privatization would designate an internal manager to direct the effort. This manager would develop a general plan and schedule for privatization of the fund and hire outside advisors and managers. At a minimum, the agency should hire an investment banking or financial consulting firm to conduct the sale. The internal manager should issue a request for information or a request for proposals to ask qualified firms to provide expressions of interest in conducting the sale. The investment banking firm or other financial management firm’s fee could be paid on a “success basis,” with its fee fixed at a percentage of the proceeds of the sale. The internal manager also would decide whether to employ legal counsel separately or to allow the financial consultant to hire counsel to provide advice on the transaction.

Phase 2: Valuation

Once the agency has hired outside advisers, the managers of the sale would need to establish a preliminary estimate of the fund’s value.[23] The value of a business enterprise essentially is the worth of the stream of earnings expected to flow from the enterprise in the future. A common method of estimating this value is called discounted cash flow, which essentially estimates the net earnings expected to be received by the firm each year into the future and adds together the present value of each future year’s earnings, as reduced (“discounted”) by a compounded interest rate.

The first task would be a valuation of the fund’s assets and liabilities. Although workers’ compensation policies are written for terms of one year, the financial consultants would want to consider the mix of insurance policies contained in the fund’s portfolio as they evaluate its future prospects. In addition, the financial consultants would need an actuarial opinion that covers, at a minimum, the adequacy of reserves for losses (that is, claims of injured workers) and the costs of processing claims.[24]

Purchasers of all or part of the fund would not enjoy exemption from federal corporate income taxes.[25] In addition, the sale of the fund may result in a requirement of payment of back taxes; qualified tax counsel and the US Department of the Treasury would determine whether and how much tax for income realized in the years prior to the sale might be due. In any event, such taxes would be an important factor affecting the valuation.

Finally, it is important to emphasize that the valuation is only an estimate of what the sale of the fund should bring in an auction or other sale; only a willing buyer and seller can determine the price at which an enterprise will be sold.[26]

The potential market of buyers who could purchase the fund is large. More than 100 groups of insurance companies and more than 250 individual companies have participated in the Texas market since 1996.[27] Sixteen of the largest property and casualty groups of insurance companies in the US should be considered among the potential buyers. Together, they have about $300 billion in assets, with average assets at about $18.5 billion, and about $76 billion in surplus, with an average surplus of $4.8 billion.[28] All of these groups have one or more companies that do business in Texas. Other companies are potential buyers as well, since purchase of the fund or a part of it might be an attractive means of entering the Texas market or might fit into a large insurance company’s corporate strategy.

Phase 3: Restructuring and Reorganization

The financial adviser must analyze the possible need for restructuring or reorganizing the fund. This analysis would help in the evaluation of several options for the sale:

  • Sale of the fund in its entirety. The fund would be sold as a whole, in its current form. Both the authorizing legislation and the contract for sale would require the acquiring company to continue to serve as the state’s insurer of last resort and as an insurer for small employers.
  • Sale of the fund in its entirety, with an allocation mechanism for residual market employers. With the radical decline in the size of the residual market, the burden of such cases is greatly reduced. A new allocation mechanism could distribute this burden fairly and evenly among more than 250 workers’ compensation insurers in the Texas market.
  • Spin-off and sale of part of the portfolio. The state could choose to sell only part of the fund’s portfolio by creating another insurance company, transferring part of the portfolio to the new company, and then selling the company. For example, the new company could include many or all of the small employers and other policyholders. The new company could be sold with an obligation to sell such policies to small employers. The remainder of the fund could continue to operate otherwise unchanged, including its obligation to serve as the insurer of last resort.
  • Division of the fund into two or more companies for sale. The fund could be divided into several companies, each of which would receive part of the current portfolio, including a proportionate share of the small employers and high-risk residual market policies. The successor companies would continue to be obligated to accept such customers, but the Texas Department of Insurance could limit the obligation so that none of the successor companies would receive a disproportionate share of residual market cases.

A privatized fund would be subject to the continuing obligation to serve as an insurer of last resort and an insurer for small enterprises. The legislation authorizing the sale should require the company acquiring the fund to assume these obligations. Essentially, the fund or its successor company or companies would continue to be obligated to issue a policy to any employer in Texas who has been refused a workers’ compensation insurance policy by two insurance companies. The contract for the sale of the fund should specify any additional obligations assumed by the acquiring company. The legislation and contract of sale will determine the relationship between the state and the fund after the sale.

Several methods could be used to determine the buyer, the price, and the other specifications of the transaction. Although the fund could be sold through a public offering, it is much more likely that the fund would be sold to another insurance company or another buyer through a direct transaction. For a direct transaction, the leading methods are auctions, negotiated sales, management employee buyouts, and a placement with investors. These methods could be combined. For example, even if a controlling interest in the fund is sold through auction, a part of the shares could be reserved for the employees of the fund.

The management team would announce the auction publicly both by communicating through business and financial media and by sending invitations to bid to firms known to be potential buyers. A formal invitation to bid would specify the rules of participation, the financial and technical qualifications that bidders must meet, the amount of the minimum bid, and the deadline by which bids must be submitted.

It is important that all key aspects of the transaction be set and shared with the bidders before they submit their offers, because negotiation after the award and modification or amplification of the key terms will tend to render the auction meaningless. Any negotiations after the auction must be seen as fair and reasonable, supported by the advice of lawyers and other counselors, and made by accountable officials.[29] After the bids have been received, they would be evaluated and a winning bid selected. Afterwards, lawyers would draw up documents of transfer and the transaction would be completed. The winning bidder would make arrangements to deliver the sum to be paid to the state.

Economic Stabilization Fund

The Economic Stabilization Fund (ESF), popularly known as the “Rainy Day Fund,” was created by a constitutional amendment approved by the voters in November 1988 to provide a more even flow of state revenues and expenditures, even in times of economic adversity.[30] The ESF receives one-half of any unencumbered positive balance of general revenues on the last day of the State’s budget biennium and an amount equal to 75 percent of the amount by which revenue from oil and gas production taxes exceeds that received in fiscal year 1987.[31] However, the ESF may also receive any other money appropriated to it by the Legislature.[32]

A larger sum in the ESF would allow state government better to cope with economic fluctuations in the future. If the amount grows sufficiently large, the state’s creditworthiness rating could improve and, thus, reduce the cost of the state’s borrowing.


A. State law should be amended to direct the Texas Department of Insurance (TDI), in consultation with the Texas Workers’ Compensation Commission, to sell the Texas Workers’ Compensation Insurance Fund by auction.

State law should require the acquiring entity to accept the continuing obligation of serving as the insurer of last resort and as an insurer for small employers, in a manner similar to that used in Michigan. The legislation also should include a contingent provision for the creation of an allocation mechanism to distribute the small number of residual market cases, if that should prove necessary to complete the sale. Furthermore, the law should allow parts of the fund’s portfolio to be sold as separate insurance companies.

TDI should employ an investment banking firm to serve as an advisor and organizer of an auction. It should begin this process by issuing a request for proposals inviting investment banks, accounting, and consulting firms to provide quotes on the range of tasks involved in conducting the auction. The investment banking firm or TDI also should employ legal counsel and an accounting firm. After preliminary analysis and valuation, the investment banking firm should decide whether to sell the fund as a whole, to divide it into several companies, or sell only part of the portfolio. For a sale of the fund as a whole or in several parts, the minimum bid should be set at $300 million, plus the amount of the negotiated commission. The statute could include provisions to guarantee employment for current fund employees (other than termination for cause) for a fixed period after the sale and for repurchase by the state in case of insolvency.

B. State law should be amended to provide that all proceeds from the sale be deposited in the Economic Stabilization (“Rainy Day”) Fund.

Depositing the proceeds from the sale into the Economic Stabilization Fund would bring three advantages to the state. First, the state would earn interest from the sums. The funds would improve the state’s financial management by assisting with managing the uneven flows of money into and out of the state Treasury during the course of the fiscal year.[33] Finally, the money would contribute toward building the Economic Stabilization Fund to a level that would tend to improve the state’s rating by financial rating services and ultimately reduce the interest rate the state must pay for debt issued in financial markets.

Fiscal Impact

E-Texas estimates that about $300 million would become available in the second fiscal year of the biennium, after payment of a reasonable commission to the financial advisory firm that conducts the sale. Interest earnings from the sale proceeds would add an estimated $17.3 million in fiscal 2004, $18.2 million in fiscal 2005, and $19.3 million in fiscal 2006 to the Economic Stabilization Fund.

The Legislature could make appropriations in this amount contingent on the successful sale of the fund. Because of the uncertainty as to how much revenue would be raised and other advantages related to the state’s sound financial management, it is recommended that the proceeds be earmarked for deposit to the state’s Economic Stabilization Fund. After deposit, the proceeds would begin to earn interest that would continue to be added to the fund in the following years.

Fiscal Year
Gain to the Economic Stabilization Fund

[1] 14A Vernon’s Ann. Civ. St., Insurance Code, Art. 5.76-3, § 2(a).

[2] Testimony of Russell R. Oliver, president, Texas Workers’ Compensation Insurance Fund, before the Subcommittee of the House Committee on Business and Industry, Austin, Texas, May 24, 2000.

[3] Interview with Scott McAnally, executive director, Research and Oversight Council on Workers’ Compensation, Austin, Texas, August 14, 2000.

[4] Texas Workers’ Compensation Insurance Fund, “1999 Management’s Discussion and Analysis, NAIC Company Code 22945,” Austin, Texas, 2000, p. 5.

[5] Texas Workers’ Compensation Insurance Fund, Annual Statement of the Texas Workers’ Compensation Insurance Fund of Austin in the State of Texas to the Insurance Department of the State of Texas for the Year Ended December 31, 1999 (Austin, Texas, 2000), p. 3.

[6] V.T.C.A, Government Code, §316.031.

[7] Memorandum from Donald L. Howell and Greer H. Pagan, Vinson and Elkins L.L.P., to Mary Barrow Nichols, senior vice president and general counsel, Texas Workers’ Compensation Insurance Fund, March 26, 2000; and letter from William H. Caudill, partner, Fullbright and Jaworski, L.L.P., to Mary Barrow Nichols, senior vice president and general counsel, Texas Workers’ Compensation Insurance Fund, March 14, 2000.

[8] Donald L. Howell and Greer H. Pagan, Vinson and Elkins L.L.P., to Mary Barrow Nichols, senior vice president and general counsel, Texas Workers’ Compensation Insurance Fund, March 26, 2000.

[9] 14A Vernon’s Ann. Civ. St., Insurance Code, Art. 5.76-5, § 10(b).

[10] American Home Assur. v. Texas Dept. of Ins. 907 S.W.2d 90 (C.A. 3d Dist. 1995), writ den.

[11] Testimony of Martin H. Young, Jr., Chairman of the Board, Texas Worker’s Compensation Insurance Fund, before the subcommittee of the House Committee on Business and Industry, Austin, Texas, May 24, 2000. See also 14A Vernon’s Ann. Civ. St., Insurance Code, Art. 5.76-5, § 10(a).

[12] Daniel Yergin and Joseph Stanislaw, The Commanding Heights (New York: Simon & Schuster, 1998), pp. 13-14.

[13] William L. Megginson and Jeffry M. Netter, “From State to Market” (Norman, Oklahoma, August 31, 2000), p. 49; draft article from a forthcoming issue of Journal of Economic Literature.

[14] Fun ’N Sun R.V. Inc. v. State of Michigan, 447 Mich. 765, 771; 527 N.W.2d 468, 471 (1994).

[15] Gongwer Michigan Report (September 23 and September 29, 1993). (Newsletters.)

[16] A.M. Best Company, Inc., BestWire (September 14, 1994).

[17] Gongwer Michigan Report (September 23, 1993). (Newsletter.)

[18] Gongwer Michigan Report (September 3, 1993). (Newsletter.)

[19] Gongwer Michigan Report (January 5, 1994). (Newsletter.)

[20] Gongwer Michigan Report (July 15, 1994 and September 14, 1994). (Newsletters.)

[21] Michigan Statutes Annotated, §24.12301, §24.15601 (1993).

[22] E. S. Savas, Privatization and Public-Private Partnerships (New York: Chatham House Publishers, 2000), p. 145.

[23] Pierre Guislain, The Privatization Challenge (Washington, DC: The World Bank, 1997), pp. 88, 118-121, 164-165; and Savas, Privatization and Public-Private Partnerships, pp. 230-231.

[24] Insurance Accounting & Systems Associates, Inc., Property-Casualty Insurance Accounting (Durham, North Carolina, 1994), pp. 4-24 - 4-25.

[25] Title 26, U.S.C. § 501(c)(27) (2000).

[26] Pierre Guislain, The Privatization Challenge, p. 119; and E.S. Savas, Privatization and Public-Private Partnerships, p. 145.

[27] Research and Oversight Council on Workers Compensation, The Effects of Reforms on the Texas Workers Compensation Market (Austin, Texas, 1999), p. 9.

[28] Texas Comptroller of Public Accounts, data compiled from lists of insurance companies selling workers compensation insurance in Texas; “Workers’ Compensation: Leading Writers By Line—1999,” Best’s Review (July 2000), p. 60; and A. M. Best Company, Best’s Insurance Reports: Property-Casualty United States (Oldwick, New Jersey, 2000).

[29] Pierre Guislain, The Privatization Challenge, p. 126.

[30] Comptroller of Public Accounts, 2000 Annual Cash Report, Volume Two (Austin, Texas, November 2000), p. 189.

[31] Vernon’s Ann. Tex. Const. Art. III, § 49-g(b)-(d).

[32] Vernon’s Ann. Tex. Const. Art. III, § 49-g(f).

[33] Vernon’s Ann. Tex. Const. Art. III, §49g.

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