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You are here: Home . bulletins . 2005 . b-0044-05
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COMMISSIONER'S BULLETIN # B-0044-05

September 09, 2005


To: ALL INSURANCE COMPANIES, CORPORATIONS, EXCHANGES, MUTUALS RECIPROCALS, ASSOCIATIONS, LLOYDS, OR OTHER INSURERS WRITING PROPERTY AND CASUALTY INSURANCE IN THE STATE OF TEXAS AND TO AGENTS AND REPRESENTATIVES AND THE PUBLIC GENERALLY


Re: Hurricane Katrina - An Extraordinary Event; Change in Classification of Commercial Auto Vehicles from Local to Intermediate or Long Haul, Cancellation or Non-renewal of Policies, or Refusal to Provide Coverage due solely to participation in the relief effort

This bulletin is issued for those insurers that are looking for guidance in re-classifying local haul Commercial Auto vehicles at audit because they have participated or are participating in the relief efforts of Hurricane Katrina. In such case, where the Commercial Auto vehicles were temporary participants in the relief effort of Hurricane Katrina, the Texas Department of Insurance is of the opinion that these vehicles should NOT be re-rated at audit as intermediate or long-haul.

On September 1, 2005, Governor Perry issued a proclamation certifying that Hurricane Katrina, a disaster in sister states, has created an emergency disaster and emergency conditions for the people in the State of Texas beginning September 1, 2005. Insurers are encouraged to NOT place additional and unnecessary burden on efforts of relief for hurricane assistance.

Insurance Code article 1.02(b) requires that rates used under the Code be just, fair, and reasonable. Article 5.13-2 requires that rates not be unreasonable. In the current disaster circumstances, it is NOT reasonable to change policyholders' rating classifications and increase their insurance rates solely because they are assisting disaster relief by driving longer routes.

Also, the Department is of the opinion that an insurer should NOT cancel a policy or refuse to write coverage for a prospective insured solely because of temporary participation in relief efforts in Hurricane Katrina.

Questions regarding this bulletin may be directed to P&C Actuarial Division, at (512)-305-8125 or Kathy.Poppe@tdi.state.tx.us.

Sincerely,

Philip O. Presley
Chief Actuary
Property & Casualty



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Last updated: 09/16/2014

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