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You are here: Home . orders . 1211B-059

Order Allowing a Companion Policy Discount on Auto Policies

TEXAS DEPARTMENT OF INSURANCE

EXEMPT FILING NOTIFICATION PURSUANT TO THE INSURANCE CODE

CHAPTER 5, SUBCHAPTER L, ARTICLE 5.96

ADOPTION OF AMENDMENTS TO RULE 74,

THE TEXAS AUTOMOBILE RULES AND RATING MANUAL

COMPANION POLICY DISCOUNT

The Commissioner of Insurance is adopting amendments proposed by Staff to Rule 74, Texas Automobile Rules and Rating Manual (the Manual), regarding a companion policy discount. Staff´s petition (Ref. No. A-1002-40-I) was published in the November 8, 2002 issue of the Texas Register (27 TexReg 10621).

This amendment adds a new section K to Rule 74 in the Manual to allow an insurer the option of implementing a discount up to 10% on a personal auto policy if a companion policy is issued in the same company or company group. A life or health insurance policy shall not qualify as a companion policy, but an insurer offering the discount shall otherwise specify in its filing what constitutes a companion policy, as well as the amount of the discount.

If an insurer elects to implement the discount, the discount must apply to bodily injury/property damage liability, personal injury protection/medical payments, collision, comprehensive, and specified causes of loss coverages. The discount must be applied uniformly to the applicable coverages.

Any election to give this discount must be filed with the Texas Department of Insurance (Department) prior to the effective date of the discount. If an insurer chooses to withdraw this discount, the insurer must give written notice to the Department prior to such withdrawal.

The Personal Lines Manual already allows a companion policy discount for residential property insurance policies when a companion policy, including a personal auto policy, is issued in the same company or company group.

Regarding personal auto policies, certain insurers have received the Department´s approval on individual company rating manual filings under Insurance Code Article 5.101 for companion policy discounts (as subclassifications). Today's action does not withdraw the Department´s previous approval of such filings. An insurer may still seek approval of a rating manual filing for a companion policy discount that exceeds 10%, although statistical support must be furnished in such a filing.

Adoption of this amendment will save time for the Department and insurers by eliminating the need for individual company filings for such discounts of 10% or less, as well as saving costs for insurers in this regard. The Commissioner is aware of support for a companion policy discount for the Manual and believes this amendment will be in the interest of both insurers and insureds.

The amendments as adopted by the Commissioner of Insurance are shown in an exhibit on file with the Chief Clerk under Ref. No. A-1002-40-I, which is incorporated by reference into Commissioner´s Order No. 02-1279.

The Commissioner of Insurance has jurisdiction over this matter pursuant to Insurance Code Articles 5.10, 5.96, 5.98, and 5.101.

This notification is made pursuant to Insurance Code Article 5.96, which exempts it from the requirements of the Government Code, Chapter 2001 (Administrative Procedure Act).

Consistent with Insurance Code Article 5.96(h), the Department will notify all insurers writing automobile insurance of this adoption by letter summarizing the Commissioner´s action.



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Last updated: 09/06/2014

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