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You are here: Home . rules . 2003 . 1105a-059
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EXEMPT FILING NOTIFICATION PURSUANT TO THE INSURANCE CODE, CHAPTER 5, SUBCHAPTER L, ARTICLE 5.96

The Commissioner of Insurance at a public hearing under Docket No. 2578 scheduled for December 2, 2003 at 9:30 a. m. in Room 100 of the William P. Hobby Building, 333 Guadalupe Street in Austin, Texas will consider proposals to adopt various changes to the Texas Basic Manual of Rules, Classifications and Experience Rating Plan for Workers´ Compensation and Employers´ Liability Insuranc e (the Manual) pertaining to the Terrorism Risk Insurance Act of 2002 as proposed by the American International Companies. The Manual provides insurers licensed in Texas to write workers´ compensation insurance with the rules, classifications, endorsements, forms and experience rating plan applicable to Texas workers´ compensation policies. American International Companies originally filed its petition requesting the changes on July 17, 2003 (Ref. No. W-0703-14) and amended its request on September 2, 2003 and on October 14, 2003 .

The proposed amendments to the Manual are summarized as follows:

1. Amend Rule III E., Line 18 to show the option of calculating Terrorism premium by multiplying the Premium Subject to Experience Modifier (Line 8), which includes the premium incentive for small employers, by the Terrorism rate and adding that premium to the Estimated Standard Premium.

2. Amend Rule VI J. to add the option of calculating Terrorism premium based on premium rather than payroll. The proposed amendment to this rule indicates that the carrier will select the methodology used to calculate Terrorism premium and file that selection with the Texas Department of Insurance (TDI). The current rule states that Terrorism premium is not subject to the premium incentive for small employers. The proposed amendment to the rule contemplates that if Terrorism premium is calculated on premium rather than payroll, then the Terrorism premium is determined after the application of the premium incentive for small employers, if applicable. In addition, the current rule states that Terrorism premium does not apply to Code 0913 ­ Domestic Workers ­ Residences Per Capita Basis. The proposed amendment to the rule states that if Terrorism premium is calculated based on the current rule of using total payroll, then premium developed under Code 0913 would not be included in the calculation of Terrorism premium. This proposed amendment implies that if Terrorism premium is based on a methodology other than the current rule, then Terrorism premium would include premium developed under Code 0913.

3. Amend Rule XV D. to state that if Terrorism premium is calculated based on the current rule of using total payroll, then premium developed under Code 0913 would not be included in the calculation of Terrorism premium. This

4. Amend Rule XVII F. to indicate that if Terrorism premium is calculated on the basis of premium rather than payroll, then the Terrorism premium is determined after the application of the premium incentive for small employers, if applicable.

5. Amend Part III 16. of the Texas Workers´ Compensation Statistical Plan to match the changes proposed to Rule III E., Rule VI J., Rule XV D. and Rule XVII F. of the Manual and described above.

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

A copy of the full text of the proposed amendments is available for review in the Office of the Chief Clerk of the Texas Department of Insurance, 333 Guadalupe Street , Austin , Texas 78714-9104 . For further information or to request copies of the amendments, please contact Ms. Sylvia Gutierrez at (512) 463-6327 (refer to Ref. No. W-0703-14).

The staff and the Commissioner request that written comments to these proposed amendments be submitted no later than 5:00 p. m. on December 15, 2003 to the Gene Jarmon, General Counsel and Chief Clerk, Texas Department of Insurance, P. O. Box 149104 , MC 113-2A, Austin , Texas 78714-9014 . An additional copy of the comments should be submitted to Nancy Moore, Deputy Commissioner, Workers´ Compensation, Texas Department of Insurance, P. O. Box 149104 , MC 105-2A, Austin , Texas 78714-9104 .

This notification is made pursuant to the Insurance Code, Article 5.96, which exempts it from the requirements of the Government Code, Chapter 2001 (Administrative Procedure Act).



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