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You are here: Home . bulletins . 2014 . cc9

COMMISSIONER'S BULLETIN # B-0010-14

W.C. Circular Letter No. 740

April 11, 2014


To: ALL INSURANCE COMPANIES, CORPORATIONS, EXCHANGES, MUTUALS, RECIPROCALS, ASSOCIATIONS, LLOYDS, OR OTHER INSURERS WRITING WORKERS' COMPENSATION AND EMPLOYERS' LIABILITY INSURANCE IN THE STATE OF TEXAS, THEIR AGENTS AND REPRESENTATIVES, AND THE PUBLIC GENERALLY


Re: RATE FILING INSTRUCTIONS FOR INSURERS TO REFERENCE NCCI'S MISCELLANEOUS VALUES FILING, WHICH INCLUDES THE LOSS ELIMINATION RATIOS FOR THE WORKERS' COMPENSATION AND EMPLOYERS' LIABILITY INSURANCE DEDUCTIBLE OPTIONS

The Texas Department of Insurance accepts the rate filing from the National Council on Compensation Insurance (NCCI) for miscellaneous values, which includes the loss elimination ratios (LERs) for the deductible options. NCCI filed the LERs for insurers to use in determining the deductible credits for the three promulgated Texas workers' compensation deductible options. Under Insurance Code Section 2053.202, all insurers must offer at least three optional deductible plans to policyholders. In addition to offering these, insurers may continue to offer negotiated deductibles.

All insurers writing policies with an effective date on or after June 1, 2014, must make a rate filing referencing NCCI's miscellaneous values filing. The effective date of an insurer's filing must be the same as its effective date for using the NCCI Basic Manual with Texas exceptions, and the national and Texas-specific endorsements and forms in the NCCI Forms Manual, but no later than October 1, 2014.

Commissioner's Order No. 3142, dated March 21, 2014, adopts the NCCI Basic Manual with Texas exceptions, and the national and Texas-specific endorsements and forms in the NCCI Forms Manual. The adopted Texas exceptions replace two previously available deductible options with the per claim deductible and the medical-only deductible options. The Texas exception pages do not include the premium credits for any of the deductible options. Instead, insurers must use the LERs in NCCI's miscellaneous values filing to calculate their premium credits for the per accident, per claim, and medical-only deductible options.

Required Actions

Insurance Code Section 2053.003 requires each insurer to file with TDI all rates, supplementary rating information, and reasonable and pertinent supporting information for risks written in Texas. To comply, all insurers must submit a rate filing referencing NCCI's miscellaneous values filing (TDI Link Number 132317).

The filing must also include the formula used to arrive at the premium credits for the deductibles, the selected expenses used in the formula, and the resulting deductible credits for the three deductible options using NCCI's LERs. Insurers must use the NCCI LERs. If an insurer applies a safety factor or other relevant factors to the LERs, the insurer must explain and support the use of these factors. Additionally, insurers must support their expense selections with relevant historical expense data. If the selected expenses differ from the historical expenses, insurers must include an explanation of and support for the difference.

Insurers that fail to comply with the filing requirements in this bulletin may be subject to regulatory action.

Filing Forms and Exhibits

The Filings Made Easy Guide at www.tdi.texas.gov/pubs/pc/rspceasy.html specifies filing requirements. Insurers may provide the required information using the transmittal form and filing exhibits in the Filings Made Easy Guide, or they may use their own forms and formats.

Where to Send Filings

Submit filings via SERFF or mail or deliver them to Property and Casualty Filings Intake at the appropriate address:

Mail to:

Deliver to:

Texas Department of Insurance

Texas Department of Insurance

Property and Casualty Filings Intake

Property and Casualty Filings Intake

Mail Code 104-3B

Tower 1, Room 103

P. O. Box 149104

333 Guadalupe Street

Austin, TX 78714-9104

Austin, TX 78701

TDI Contact

For further information or questions concerning this bulletin, please contact the Property and Casualty Actuarial Office by phone at 512-475-3017, or by email at pcactuarial@tdi.texas.gov.

J'ne Byckovski
Chief Actuary
Property and Casualty Actuarial Office



Last updated: 09/07/2014

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