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You are here: Home . orders . co-02-1067

Order CO-02-1067 Requires Market Assistance Participation

No. 02-1067

Official Order of the

Commissioner of Insurance of the

State of Texas

Austin, Texas

Date: October 14, 2002

Subject Considered:

IMPLEMENTATION OF MANDATORY PARTICIPATION BY INSURERS IN THE RESDENTIAL PROPERTY MARKET ASSISTANCE PROGRAM

General remarks and official action taken:

On this day came on for consideration by the Commissioner of Insurance the matter of requiring mandatory participation in the Market Assistance Program (MAP) of all insurers writing residential property insurance in Texas.

The Commissioner has jurisdiction of this matter pursuant to the Insurance Code Article 21.49-12 and 28 TAC §5.9411. Article 21.49-12 § 2(a) provides that all insurers licensed to write property or casualty insurance and actually writing residential property insurance in this state, including Lloyds, reciprocals, and interinsurance exchanges may participate in the program unless insurer participation is made mandatory by the Commissioner based on criteria provided in the plan of operation. Subsection 5.9411 (b) of the MAP plan of operation provides the criteria for the implementation of a mandatory MAP on the Commissioner´s own motion that include: (1) less than 60% of the eligible applications, either on a statewide basis, or in one or more designated underserved areas, or in unprotected portions of designated underserved areas, referred to participating insurers in the preceding 12 months, or in any other period as determined by the Commissioner, result in the issuance of at least one premium quote per application, or (2) less than 40% of the eligible applications, either on a statewide basis, or in one or more designated underserved areas, or in unprotected portions of designated underserved areas, referred to participating insurers in the preceding 12 months, or in any other period as determined by the Commissioner, result in the issuance of residential property insurance policies. Pursuant to § 5.9411 (b)(2), the Commissioner may after notice and hearing implement mandatory participation in the MAP if either of the foregoing criteria are met.

A public hearing to consider this matter was held under Docket No. 2536 on October 10, 2002, at 8:30 a.m. in Room 225 of the William P. Hobby, Jr. State Office Building Tower 2, 333 Guadalupe Street, Austin, Texas. Notice of this hearing was posted at the Secretary of State on October 2, 2002.

After careful consideration, the Commissioner has determined that a mandatory MAP should be implemented pursuant to Article 21.49-12 of the Insurance Code and § 5.9411 of the Texas Administrative Code. The determination is based on the review by the Texas Department of Insurance of the performance data of the MAP for the first six months of this year (January 1, 2002 to June 30, 2002). The performance data shows that 54% of the eligible MAP applications that were sent to participating insurers resulted in premium quotes. This percentage is less than the 60% threshold for implementing mandatory MAP. In addition, 37% of eligible MAP applications that were sent to participating insurers resulted in policies being written. This percentage is below the 40% threshold for implementing mandatory MAP. (A copy of the MAP statistics is attached as Exhibit A and incorporated by reference for all purposes.) In light of the fact that both the percentage of eligible policies quoted and the percentage of eligible policies written are below the thresholds for implementing mandatory MAP, the Commissioner determined that mandatory participation in MAP of all insurers writing residential property insurance in Texas is necessary.

IT IS THEREFORE THE ORDER of the Commissioner of Insurance that for the reasons specified herein, participation in the residential property Market Assistance Program is mandatory for all insurers writing residential property insurance in Texas.

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Last updated: 09/06/2014

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