A new Texas law backed by agents groups requires professional employer organizations (PEOs) and staff leasing firms to provide workers’ comp loss information to employer clients in a timely manner. The Independent Insurance Agents of Texas strongly supported House Bill 625 and worked with various stakeholders to help craft the legislation.
IIAT Executive Director David VanDelinder said the reluctance of some PEOs to provide loss information to their employer clients impeded agents’ ability help those employers find workers’ compensation insurance outside of the PEO.
The problem came to the attention of the IIAT when a Houston agent was trying to shop workers’ compensation insurance for a client but the business was unable to get the loss information it needed from a staff leasing firm. “So when they went out to shop they had to say to the insurance company I don’t have any loss information,” Van Delinder said. “It’s very hard to get workers’ comp without that data.”
“For years we’ve had a law in the statutes that said if a customer wants workers’ comp loss information and requests that of his insurance company, that company has to provide that within 30 days,” VanDelinder said. But PEOs were exempt from that requirement.
He said while most PEOs would ultimately provide the information, some would not. HB 625 “simply corrects that situation and makes it clear that if you are outside or inside a PEO, if you’re an employer, you have access to that loss information,” VanDelinder said.
He added that PEO professional organizations were in favor of standardizing the requirements and were instrumental in drafting some of the language in the bill.
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