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You are here: Home . bulletins . 2004 . b-0028-4
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COMMISSIONER'S BULLETIN # B-0028-04

June 21, 2004


To: Texas, TDI, bulletin, 2004, B-0028-04, Standard Rate index for County Mutual Insurance Companies


Re: STANDARD RATE INDEX

On June 21, 2004, the Commissioner of Insurance (Commissioner), in accordance with the statutory requirements of Article 5.13-2 § 13 (c) Texas Insurance Code, issued Commissioner's Order No. 04-0625 relating to the standard rate index for personal automobile insurance issued by a county mutual insurance company.

The current benchmark rate, which was established under Commissioner's Order No. 01-1038, was adopted as the initial standard rate index. The effective date of the standard rate index is December 1, 2004 to coincide with the effective date of Article 5.13-2 § 13 as amended by Senate Bill 14, Acts of the 78th Legislature, Regular Session, 2003.

The purpose of the standard rate index is to define non-standard auto business. To qualify as an insurer of non-standard auto business, rates for new policies issued by county mutuals on and after December 1, 2004, must be 30 percent or more above the standard rate index.

An exception is made for policies with a 12-month anniversary date between June 1, 2004, (in the case of 6-month policies; January 1, 2004 in the case of monthly policies) and November 30, 2004, inclusive, and which must be renewed on or after December 1, 2004. In such a case, renewals of such policies on or after December 1, 2004 until the first subsequent 12-month anniversary date may be made at the same rate as the original policy even if it is less than 30 percent above the standard rate index, and this will not be considered in determining if an insurer qualifies as a non-standard auto writer. However, if there is a change in the rate on or after December 1, 2004, it must be actuarially justified and will be considered in determining if an insurer qualifies as a non-standard auto writer. For additional information companies may refer to the FAQ's in the industry section of the TDI website at www.tdi.state.tx.us.

Other questions regarding this bulletin should be directed to:

Philip Presley ( PCActuarial@tdi.state.tx.us)
Property and Casualty Chief Actuary
Texas Department of Insurance, MC 105-5F
P. O. Box 149104
Austin, TX 78714-9104
(512) 475-3017

Sincerely,

__________________________________________
Philip Presley
Property and Casualty Chief Actuary



Last updated: 09/07/2014

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