EXEMPT FILING NOTIFICATION PURSUANT TO THE INSURANCE CODE

CHAPTER 5, SUBCHAPTER L, ARTICLE 5.96

ADOPTION OF AMENDMENTS TO THE

TEXAS WORKERS´ COMPENSATION STATISTICAL PLAN

The Commissioner of Insurance has adopted the amendments proposed by the Texas Department of Insurance (TDI) staff in a petition filed on February 24, 2003. Notice of the proposal (Reference No. W-0203-06-I) was published in the March 7, 2003 issue of the Texas Register (28 TexReg 2128). No hearing was requested on this matter. The Texas Department of Insurance received no comments concerning the proposed amendments.

The Commissioner adopted the amendments proposed by staff with no changes to the proposed amendments as published in the Texas Register. The adopted amendments to the Texas Workers´ Compensation Statistical Plan (the Plan) provide insurers licensed in Texas to write workers´ compensation insurance with the necessary instructions for the reporting of statistics to the Texas Department of Insurance. The purpose of the adopted amendments to the Plan is to set forth the guidelines for implementation of the Terrorism Risk Insurance Act of 2002.

The adopted amendments to the plan are as follows:

1. Add Item 16 to Exposure and Premium Reporting Instructions to explain how Terrorism Premiums are to be reported using statistical code 9740.

2. Amend Statistical Code listing to include statistical code 9740 for Terrorism Premiums. Add statistical code 9740 for Terrorism Premiums to the Statistical Code listing.

3. Remove references to statistical code 0020 for the "Texas old Program" from Exposure and Premium Reporting Instructions. Delete references to statistical code 0020 of the "Texas Old Program" from Exposure and Premium Reporting Instructions.

The adopted amendments to the Plan are on file in the Chief Clerk´s Office of the Texas Department of Insurance under Reference No. W-0203-06-l and are incorporated by reference into Commissioner´s Order No. 03-0274.

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

IT IS THEREFORE THE ORDER of the Commissioner of Insurance that the amendments proposed by staff to the Plan be and hereby are adopted.

IT IS FURTHER ORDERED that the proposed amendments to the Texas Workers´ Compensation Statistical Plan will go into effect 15 days after notice of adoption is published in the Texas Register.

See Illustration 3 in PART XII for an example of reporting a policy with split modifications.

For risks not subject to experience modification, leave this line blank.

8. TOTAL MODIFIED PREMIUM

Report the total adjusted policy premium resulting from the application of an experience rating plan (the product of lines AxB).

For risks not subject to experience modification, leave this line blank.

9. PREMIUM NOT SUBJECT TO EXPERIENCE MODIFICATION-LINES D, E, F, & G

Report the statistical codes, exposures, rates, and corresponding premium for those statistical codes not subject to experience modification. Refer to PART X, for those statistical codes not subject to experience modification.

10. MINIMUM PREMIUMS

The determination of whether or not a risk falls under the minimum premium criteria is made by comparing the premium obtained by extension of payroll plus the expense and loss constants to the highest minimum premium shown on the state rate pages for the classes on the policy. When the premium plus expense constant and loss constant, if any, is less than the minimum premium, then the minimum premium must be charged. When a minimum premium is charged for a policy, the additional premium required to bring the total risk standard premium up to the minimum premium shall be assigned to statistical code 0990. The amount reported under 0990 should NOT include loss, and expense constants. They are reported separately on the Unit Statistical Report.

If the minimum premium applies to a multistate policy, the additional premium required to bring the total risk standard premium up to the minimum premium shall be allocated to the state with the highest minimum premium shown in the rate pages for the states and classes on the policy.

11. LOSS CONSTANT

The loss constant, if any, shall be reported with special classification code 0032.

12. RISK TOTALS--STANDARD

Report the sum of the exposure and premium above this line. The total shall be the premium charged for the policy EXCLUDING the expense constant and premium discounts.

PART X

In the event that more than one unit card is necessary, report the totals on the last card only.

13. RISK TOTALS OTHER (EXPOSURE ONLY)

Report the total exposure other than payroll.

In the event that more than one unit card is necessary, report the totals on the last card only.

14. PREMIUM DISCOUNT

The premium adjustment resulting from the application of the Texas premium discount plan shall be reported under statistical code 0063. This premium credit shall not be included in the standard premium.

15. EXPENSE CONSTANT

The premium adjustment resulting from the application of the Texas expense constant shall be reported with statistical Code 0900 (Texas Revised Program). The expense constant on multistate policies shall be allocated to the state with the highest expense constant applicable. In the event that two or more states included on the policy have the same highest expense constant, the expense constant is to be allocated to the state developing the highest standard premium of the states with the highest expense constant.

* 16. TERRORISM PREMIUM

The premium, if any associated with the implementation of the Terrorism Insurance Act of 2002 shall be reported under statistical code 9740. Terrorism premium is excluded from determination of the standard premium, does not apply to Code 0913, the per capita code for Domestic Workers ­ Residences and is not subject to the premium incentive for small employers, schedule rating, experience rating, retrospective rating or premium discount.

PART X

Premium Not Subject to Experience Rating -- Reported in "Risk Totals" Section

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PART X