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EXEMPT FILING NOTIFICATION PURSUANT TO THE INSURANCE CODE

CHAPTER 5, SUBCHAPTER L, ARTICLE 5.96

ADOPTION OF REVISED WORKERS´ COMPENSATION CLASSIFICATION RELATIVITIES; AMENDMENTS TO THE TEXAS BASIC MANUAL OF RULES, CLASSIFICATION AND EXPERIENCE RATING PLAN FOR WORKERS´ COMPENSATION AND EMPLOYERS´ LIABILITY INSURANCE UPDATING EXPECTED LOSS RATES AND DISCOUNT RATIOS

The Commissioner of Insurance has adopted the amendments proposed by the Texas Department of Insurance (TDI) staff in a petition filed on August 30, 2002. Notice of the proposal (Reference No. W-0802-35-I) was published in the September 13, 2002 issue of the Texas Register (27 TexReg 8781). The amendments were considered at a public hearing held under Docket No. 2530 on October 17, 2002 at 1:30 a.m. in Room 100 of the William P. Hobby Building, 333 Guadalupe Street in Austin, Texas.

The Commissioner adopted the amendments proposed by staff with changes to the proposed amendments as published in the Texas Register. The adopted amendments include revised Texas Workers' Compensation Classification Relativities (classification relativities) and a revised table amending the Texas Basic Manual of Rules, Classification and Experience Rating Plan for Workers' Compensation and Employers' Liability Insurance (Basic Manual). Errors were detected in the data originally provided to TDI by the National Council on Compensation Insurance (NCCI). This data was used to calculate the proposed classification relativities and the expected loss rates and discount ratios. Subsequently, NCCI provided corrected data, and the department staff recalculated the classification relativities, expected loss rates, and discount ratios. The recalculated classification relativities, expected loss rates, and discount ratios were presented at the hearing held October 17, 2002.

The Commissioner has jurisdiction of this matter pursuant to Articles 5.60 and 5.96 of the Texas Insurance Code.

The Commissioner has determined that it is necessary to revise the classification relativities and the table in the Basic Manual as proposed by staff at the October 17, 2002 hearing so that they will be based on the most recent experience data available.

The revised classification relativities and the amendments to the Basic Manual are on file in the Chief Clerk's Office of the Texas Department of Insurance under Reference No. W-0802-35-I and are incorporated by reference into Commissioner's Order No. 02-1122 .

This notification is made pursuant to the Texas Insurance Code Article 5.96, which exempts action taken under Article 5.96 from the requirements of the Administrative Procedures Act (Government Code, Title 10, Ch. 2001).

Consistent with the Texas Insurance Code Article 5.96(h) prior to the effective date of this action, the Texas Department of Insurance will notify all insurers affected by this action.

IT IS THEREFORE THE ORDER of the Commissioner of Insurance that the amendments proposed by staff to the classification relativities and the Basic Manual are adopted.

IT IS FURTHER ORDERED that the revised classification relativities are available for immediate use by insurers and that their use is mandatory for all policies with an effective date on or after January 1, 2003.

IT IS FURTHER ORDERED that the amendments to the Basic Manual apply to all policies with an effective date on or after January 1, 2003.



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