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eXpendit

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Miscellaneous Expenditures
Insurance

The rules on the purchase of insurance in this section apply to all agencies and institutions of higher education, except the:

  • Texas Department of Transportation
  • The University of Texas System
  • The Texas A&M University System
  • The Texas Tech University System

SORM’s role in administering and managing insurance services

With certain exceptions, the State Office of Risk Management (SORM) is responsible for administering and managing insurance services for state agencies and institutions of higher education. A state agency or institution of higher education may not purchase property, casualty, or liability insurance coverage without the approval of SORM, regardless of the source of funds used to pay the premium.

State agencies must contact SORM prior to the purchase of insurance. SORM has established several statewide insurance programs for state agency participation, eliminating the need for procurement by the individual state agency.

State agencies are required to utilize SORM-established insurance programs when available. However, an agency may seek a waiver from SORM if the agency finds another insurance policy that better meets the needs of the agency and has a lower overall anticipated cost to the State.

With the approval of SORM, an institution of higher education may purchase insurance using any funds available to the institution.

Administrative rules promulgated by SORM on the purchase of insurance are contained in Texas Administrative Code (TAC) Chapter 252, Subchapter C. See SORM for more information.

SORM does not administer the purchase of health and life insurance.

Sources [+]

Texas Labor Code Sections 412.011, 501.024, 501.022, 412.051(b); Texas Education Code 51.966 (a)–(b).

Insurance as part of compensation

A state agency may purchase insurance that names an employee as the insured and does not directly benefit the State, if the agency provides the insurance as part of the employee’s compensation.

A group health insurance plan for state employees is an example of insurance being part of compensation.

A state agency must have specific statutory authority to provide insurance as part of compensation.

Sources [+]

Texas Labor Code Section 412.011(c)(2); Opinion of Texas Attorney General Nos. MW 276 (1980), MW 156 (1980), H 602 (1975), WW 731 (1959), WW-1101 (1961); O 2469 (1940).

Documentation Requirements [+]

  1. When a state agency purchases insurance as part of an officer’s or employee’s compensation, the Comptroller's office may require the agency to cite the agency’s statutory authority to provide insurance as part of compensation.
  2. Comptroller object 7204 must be used.