• Increase Text Icon
  • Decrease Text Icon
  • Email Icon
  • Print this page
You are here: Home . rules . 2002 . file40-2002
Archived File – for Reference Use.
Links and contact information may be outdated.

EXEMPT FILING NOTIFICATION PURSUANT TO THE INSURANCE CODE

CHAPTER 5, SUBCHAPTER L, ARTICLE 5.96

Notice is given that the Commissioner of Insurance will consider a proposal made in a staff petition which seeks amendments of the Texas Automobile Rules and Rating Manual (the Manual), Rule 74, regarding a companion policy discount. Staff´s petition (Ref. No. A-1002-40-I), was filed on October 30, 2002.

Staff proposes to add 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). Staff is not seeking withdrawal of 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 Staff´s proposal 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. Staff is aware of support for a companion policy discount for the Manual and believes its proposal will be in the interest of both insurers and insureds.

A copy of the petition, including an exhibit with the full text of the proposed amendments to the Manual is available for review in the office of the Chief Clerk of the Texas Department of Insurance, 333 Guadalupe Street, Austin, Texas. For further information or to request copies of the petition, please contact Sylvia Gutierrez at (512) 463-6327; refer to (Ref. No. A-1002-40-I).

Comments on the proposed changes must be submitted in writing no later than 5:00 p.m. on December 9, 2002 to the Office of the Chief Clerk, Texas Department of Insurance, P. O. Box 149104, MC 113-2A, Austin, Texas 78714-9104. An additional copy of comments is to be submitted to Marilyn Hamilton, Associate Commissioner, Property & Casualty Program, Texas Department of Insurance, P. O. Box 149104, MC 104-PC, Austin, Texas 78714-9104.

A public hearing on this matter will not be held unless a separate request for a hearing is submitted to the Office of the Chief Clerk during the comment period defined above.

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).

PETITION FOR ADOPTION OF AMENDMENTS TO RULE 74,

TEXAS AUTOMOBILE RULES AND RATING MANUAL,

COMPANION POLICY DISCOUNT

The Staff of the Texas Department of Insurance files this petition proposing adoption of amendments to Rule 74, Texas Automobile Rules and Rating Manual (the Manual), regarding a companion policy discount. The Insurance Code, Articles 5.10, 5.96, 5.98, and 5.101 authorize the filing of this petition and the action requested of the Commissioner.

Proposed for Consideration and Adoption

Staff proposes to add 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.

Background and Justification

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). Staff is not seeking withdrawal of 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 Staff´s proposal 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. Staff is aware of support for a companion policy discount for the Manual and believes its proposal will be in the interest of both insurers and insureds.

III. Requested Action

It is requested that the amendments set forth in the attached Exhibit "A" be adopted to become effective 15 days after notification of the Commissioner´s action is published in the Texas Register.

Exhibit

"A"

Amend Rule 74 by adding a new section to read:

K. Companion Policy

1. This Rule does not apply to autos that are a part of a risk that is:

a. subject to experience or composite rating;

b. assigned through the Texas Automobile Insurance Plan Association; or

c. a miscellaneous type vehicle.

2. A personal auto policy may be afforded a discount not to exceed ten percent (10%) based on the issuance of a companion policy issued in the same company or company group. The "Companion Policy" may not be a life or health insurance policy. The amount of the discount and specification of the companion policy is optional with the company, but the discount must be applied uniformly to the applicable coverages.

The discount shall be applicable to bodily injury/property damage liability, personal injury protection/medical payments, collision, comprehensive, and specified causes of loss coverages.

The effect of a discount under this Rule may be in addition to the effect of any other surcharge or discount applicable under this manual or under any other rating manual approved by the Texas Department of Insurance.

3. The election to give a companion policy discount must be filed with the Department prior to the effective date of such discount. If a company chooses to withdraw the companion policy discount, written notification must be given to the Department prior to such withdrawal.



For more information, contact:

Contact Information and Other Helpful Links