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You are here: Home . rules . 2003 . 0219-059
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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), to adopt new Endorsement TE 99 87, Exclusion of Acts of Terrorism as Defined in the Federal Terrorism Risk Insurance Act of 2002, and new Endorsement TE 99 88, Cap on Losses from Acts of Terrorism Pursuant to the Federal Terrorism Risk Insurance Act of 2002. Staff´s petition (Ref. No. A-0203-04-I), was filed on February 19, 2003.

The purposes of these amendments are to provide a possible option for commercial automobile policyholders with respect to the terrorism risk insurance coverage that is required to be made available by insurers pursuant to the Terrorism Risk Insurance Act of 2002 (the federal Act), and to disclose to commercial automobile policyholders that the Texas Department of Insurance-promulgated commercial automobile policy forms containing coverage for acts of terrorism are subject to the cap on liability for payment for insured losses pursuant to the federal Act. Insurance Code Articles 5.06, 5.10, 5.96, and 5.98 authorize the filing of this petition and the action requested of the Commissioner.

Staff proposes the consideration and adoption of amendments to the Manual as follows:

(1) Add Endorsement TE 99 87, Exclusion of Acts of Terrorism as Defined in the Federal Terrorism Risk Insurance Act of 2002;

(2) Add Endorsement TE 99 88, Cap on Losses from Acts of Terrorism Pursuant to the Federal Terrorism Risk Insurance Act of 2002;

Staff proposes that an insurer may offer Endorsement TE 99 87, Exclusion of Acts of Terrorism as Defined in the Federal Terrorism Risk Insurance Act of 2002, to each applicant or insured regarding the commercial automobile policies named in the endorsement.

Staff further proposes Endorsement TE 99 88, Cap on Losses from Acts of Terrorism Pursuant to the Federal Terrorism Risk Insurance Act of 2002, that an insurer may attach to the promulgated commercial automobile policies that provide terrorism insurance coverage.

Commissioner´s Bulletin No. B-0074-02, concerning the federal Act, sets forth in pertinent part:

The Act preserves the Texas Department of Insurance's (Department) jurisdiction and regulatory authority over rates and forms except for the period from the date of enactment of the Act through December 31, 2003, rates and forms for certain terrorism coverage shall not be subject to prior approval or a waiting period. However, it should be noted that this exception to Texas' filing laws applies only to coverage that is applicable to losses covered under the Federal program. As a means of providing policyholders with an option respecting the coverage made available under the Act, the Department will consider endorsements excluding coverage for acts of terrorism as defined by the Act. The Act preserves the Department's authority to disapprove any rates pertaining to such losses if it finds them to be excessive, inadequate or unfairly discriminatory.

To the extent that the promulgated commercial automobile policies provide coverage for acts of terrorism and in accord with Insurance Code Article 5.06, Staff finds it necessary for the department to promulgate the proposed endorsements as a means of providing policyholders a possible option with respect to the coverage made available under the federal Act and to inform policyholders that such coverage is subject to caps on losses as provided in the federal Act.

Comments on the proposed changes must be submitted in writing no later than 5:00 p.m. on March 30, 2003 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 simultaneously 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).



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