• Increase Text Icon
  • Decrease Text Icon
  • Email Icon
  • Print this page
You are here: Home . rules . 2006 . 0724f-059

SUBCHAPTER M. Filing Requirements

Division 4. Filings Made Easy - Filing Transmittal Form and Requirements for Property and Casualty Form, Rate, Rule, Underwriting Guideline, and Credit Scoring Model Filings 28 TAC §5.9310
Division 6. Filings Made Easy - Rate and Rate Manual Filing Requirements 28 TAC §5.9332
Division 7. Filings Made Easy - Underwriting Guideline Filing Requirements for Personal Automobile, Residential Property, and Workers' Compensation Insurance 28 TAC §§5.9340 and 5.9341
Division 9. Filings Made Easy - Reduced Filing Requirements for Certain Insurers 28 TAC §5.9357

1. INTRODUCTION. The Commissioner of Insurance adopts amendments to §§5.9310, 5.9332, 5.9340, 5.9341, and 5.9357, concerning form, rate, underwriting guideline, and reduced filing requirements for certain property and casualty insurers. The amendments to §§5.9310 and 5.9332 are adopted with changes to the proposed text published in the May 26, 2006 issue of the Texas Register (31 TexReg 4357) to update statutory references changed as a result of the enactment of the Texas Legislative Council's non-substantive Insurance Code revision by the 78th Texas Legislature, Regular Session, 2003, and 79th Texas Legislature, Regular Session, 2005. The amendments to §5.9357 are adopted with changes to correct minor typographical errors in the proposed text published in the May 26, 2006 issue of the Texas Register (31 TexReg 4357). The amendments to §§5.9340 and 5.9341 are adopted without changes to the proposed text.

2. REASONED JUSTIFICATION. The adopted amendments are necessary to conform filings made by certain property and casualty insurers pursuant to Insurance Code Articles 5.13-2, 5.55, and 5.55A to legislative amendments that were enacted by the 79th Legislature, Regular Session, in SB 99, HB 7, and HB 2437, and by the 78th Legislature, Regular Session, in SB 14. SB 99 added Chapter 706 to the Insurance Code which authorizes property and casualty insurers to offer insurance coverage for a loss suffered by a policyholder who is a victim of identity theft or attempted identity theft and also amended Insurance Code Article 5.13-2 to add identity theft insurance coverage as a line of insurance subject to Article 5.13-2. Thus, amendments are necessary to §5.9310(b)(7) to add identity theft insurance as a commercial and a personal line of insurance, each of which is subject to the filing requirements of §5.9310. SB 14 amended Insurance Code Article 5.13-2 §4 (Rate Standards) to remove consideration of contingencies in an insurer's setting of rates under Article 5.13-2, but Insurance Code Articles 5.55 §2(b)(4) and 21.50 §1A(g)(1) were not amended to remove contingencies from factors to be considered by insurers in setting rates under these two statutes. Therefore, workers' compensation insurers and mortgage guaranty insurers, which are regulated under these two statutes, must continue to submit supporting information on a reasonable margin for profit and contingencies with rate filings, and the amendment to §5.9332(e)(1)(N) is necessary to reflect this statutory requirement. Amendments are also necessary for consistency with provisions enacted in HB 7. One of these provisions requires that rates filed in accordance with Article 5.55 consider the effect on premiums of individual risk variations based on loss or expense considerations, and accordingly, a new subparagraph (O) has been added to §5.9332(e)(1). Under HB 7, which added Article 5.55A to the Insurance Code, insurers of workers' compensation insurance are required to file their underwriting guidelines with the Department; prior to this enactment, workers' compensation insurers were only required to provide underwriting guidelines to the Department upon request pursuant to the Insurance Code §38.003. Thus, amendments to §§5.9340 and 5.9341 are necessary to conform these sections to the statutory underwriting guideline filing requirements of new Article 5.55A. HB 2437 amended Insurance Code Article 5.13-2 §13(h) to provide for reduced filing requirements for certain insurers writing personal automobile insurance, and therefore, it is necessary to amend §5.9357(a) to clarify that subsection §5.9357(a) applies to county mutual insurers writing non-standard personal automobile insurance, and to add a new subsection (b) to specify reduced filing requirements for all insurers writing personal automobile insurance that meet the criteria described in Insurance Code Article 5.13-2 §13(h). It is necessary to re-designate the remaining subsections of §5.9357 as subsections (c) and (d) to properly incorporate new §5.9357(b) and to conform the application of re-designated §5.9357(d) to the insurers who qualify for reduced filing requirements specified in subsections (a), (b), or (c) of §5.9357.

The Department has adopted changes to §§5.9310 and 5.9332 to delete obsolete statutory citations. Insurance Code Articles 21.35A and 21.35B, which are referenced in the §5.9310(b)(4) definition of Interline filing and also referenced in the §5.9332(a)(3) filing requirements, were repealed in the non-substantive Insurance Code revision, Acts 2003, 78th Legislature, Chapter 1274, §26(a)(1), effective April 1, 2005. Article 21.35A was re-adopted as §§4005.001 - 4005.003 in the same non-substantive Insurance Code revision, and Article 21.35B was re-adopted as §550.001 in the same non-substantive Insurance Code revision. Therefore, the references to the repealed statutes in §§5.9310(b)(4) and 5.9332(a)(3) are deleted, and the updated and correct references are substituted. Insurance Code Article 21.49-2U, which is referenced in the §5.9332(a)(1) filing requirements, was repealed in the non-substantive Insurance Code revision, Acts 2005, 79th Legislature, Chapter 728, §11.020(b), effective September 1, 2005. Article 21.49-2U was re-adopted as Chapter 559 in the same non-substantive Insurance Code revision. Therefore, the reference to the repealed statute in §5.9332(a)(1) is deleted, and the updated and correct reference is substituted. Minor changes were also made to §5.9357(b) as proposed in the text published in the May 26, 2006 issue of the Texas Register (31 TexReg 4357) to correct typographical errors of capitalization of the term insurer and the term insurance.

3. HOW THE SECTIONS WILL FUNCTION. Amended §5.9310(b)(7) adds identity theft insurance as a commercial and a personal line of insurance in accordance with Chapter 706, each of which is subject to the filing requirements of §5.9310. Section 5.9310 specifies the form and content of the filing transmittal form that is to be used with form, rate, rule, underwriting guideline, and credit scoring model filings. Amended §5.9332(e)(1)(N) provides that profit and contingency provisions should be included in the actuarial supporting information that is submitted with a rate filing made in accordance with the Insurance Code Article 5.55 (Workers' Compensation Rates) or Article 21.50 (Mortgage Guaranty Insurance). Amended §5.9332(e)(1) adds subparagraph (O) to require that rates filed in accordance with Article 5.55 consider the effect on premiums of individual risk variations based on loss or expense considerations. Amendments to §§5.9340 and 5.9341 regarding underwriting guideline filing requirements for workers' compensation insurance apply the underwriting guideline filing requirements in those sections to workers' compensation insurers. Amended §5.9340 amends the purpose of Division 7, which regulates underwriting guideline filing requirements, to include workers' compensation insurance. Amended §5.9341 provides that the definitions set forth in Insurance Code Article 5.55A apply to insurers filing underwriting guidelines for workers' compensation insurance. Amended §5.9357(a) clarifies that the reduced filing requirements of this subsection apply to county mutual insurers that meet certain criteria, and new subsection (b) specifies reduced filing requirements for all insurers writing personal automobile insurance that meet the criteria described in Insurance Code Article 5.13-2 §13(h). The remaining subsections of §5.9357 are re-designated as subsections (c) and (d).

4. SUMMARY OF COMMENTS AND AGENCY RESPONSE TO COMMENTS.

Comment: One commenter expresses support of the adoption of the proposed amendments to 28 TAC §§5.9340 and 5.9341.

Agency Response: The Department appreciates the support.

5. NAMES OF THOSE COMMENTING FOR AND AGAINST THE SECTIONS.

For: Insurance Council of Texas.

Against: None.

6. STATUTORY AUTHORITY. The amendments are adopted under Insurance Code Articles 5.13-2, 5.55, 5.55A, 5.98, and 21.50, Chapter 706, and §§38.003, and 36.001. Article 5.13-2 governs rates and forms for certain property and casualty insurance lines and the respective filing requirements in this state. Article 5.13-2 §4(b)(7) was amended by the 78th Legislature, Regular Session, in SB 14 to delete "contingency provisions" from the factors to be considered by insurers in setting rates under Article 5.13-2 and therefore, from supporting information that insurers must submit with rate filings under Article 5.13-2. Article 5.13-2 §13 was amended by HB 2437, 79th Legislature, Regular Session, to provide for reduced filing requirements for personal automobile insurers that meet the statutorily specified criteria. Article 5.55 governs workers' compensation rates, and §2(b)(4) of Article 5.55 provides that an insurer in setting rates must consider a reasonable margin for profit and contingencies. Article 5.98 authorizes the Commissioner to adopt reasonable rules that are appropriate to accomplish the purposes of Chapter 5. Article 21.50 governs mortgage guaranty insurance rates, and §1A(g)(1) of Article 21.50 requires insurers to file, with any rate filing, adequate supporting data, including information on a reasonable margin for profit and contingencies. HB 7, 79th Legislature, Regular Session, amended various provisions of the workers' compensation regulatory statutes, including adding subdivision (2-a) to Article 5.55 to define "premium" to mean the amount charged for a workers' compensation insurance policy, including any endorsements, after the application of individual risk variations based on loss or expense considerations. HB 7 also added Article 5.55A to the Insurance Code to require that workers' compensation insurers file their underwriting guidelines with the Department. In accordance with Article 5.55A §3, Article 5.55A may be enforced in the manner provided by Section 38.003(g). Chapter 706 was enacted and Article 5.13-2 §2 was amended in SB 99 by the 79th Legislature, Regular Session, to add specific regulations for identity theft as a commercial insurance product and as a personal insurance product. Section 36.001 provides that the Commissioner of Insurance may adopt any rules necessary and appropriate to implement the powers and duties of the Texas Department of Insurance under the Insurance Code and other laws of this state.

7. TEXT.

SUBCHAPTER M. Filing Requirements

Division 4. Filings Made Easy - Filing Transmittal Form and Requirements for Property and Casualty Form, Rate, Rule, Underwriting Guideline, and Credit Scoring Model Filings

§5.9310. Property and Casualty Filing Transmittal Form.

(a) Purpose. The purpose of this division is to specify the form and content of the filing transmittal form that is to be used for property and casualty form, rate, rule, underwriting guideline, and credit scoring model filings and provide information on obtaining such form.

(b) Definitions. Words and terms not defined in this division may be defined in the Insurance Code Article 5.13-2 and Subchapter D of Chapter 5 and shall have the same meaning when used in this division. The following words and terms when used in this division shall have the following meanings unless the context indicates otherwise:

(1) Department--Texas Department of Insurance (TDI).

(2) TDI file number--The number assigned by the department to a filing submitted by an individual company.

(3) TDI link number--The number assigned by the department to link individual TDI file numbers to a filing which is submitted for more than one company within a group.

(4) Interline filing--A filing submitted for an endorsement that may be used with more than one line of insurance provided the endorsement does not have an impact on rates or a rate filing that may be used with more than one line of insurance that contains only information concerning policy fees, service fees, and other fees that are charged or collected by the insurer under Insurance Code §§4005.001 - 4005.003 or §550.001.

(5) Reference filing--A filing that references the use of adopted or approved policy form(s), endorsement(s), manual rule(s), rate(s), or other acceptable policy form(s), or endorsement(s), manual rule(s), or rate(s), to which the department has assigned a TDI file number.

(6) Dual filing--A monoline filing submitted for a specific line of insurance that may also be written as part of a multi-peril policy.

(7) Line of insurance--For purposes of this section, each of the following is a line of insurance:

(A) automobile-commercial;

(B) automobile-personal;

(C) boiler and machinery;

(D) casualty (personal and commercial);

(E) credit;

(F) credit-involuntary unemployment;

(G) crime;

(H) crop hail;

(I) excess liability;

(J) excess umbrella;

(K) farm and ranch;

(L) farm liability;

(M) farm and ranch owners;

(N) fidelity bonds;

(O) financial guaranty bonds or insurance;

(P) guaranteed auto protection (GAP) (commercial);

(Q) guaranteed auto protection (GAP) (personal);

(R) general liability;

(S) glass;

(T) identity theft (commercial);

(U) identity theft (personal);

(V) inland marine (commercial);

(W) inland marine (personal);

(X) involuntary unemployment;

(Y) miscellaneous casualty;

(Z) miscellaneous liability;

(AA) mortgage guaranty;

(BB) multi-peril;

(CC) personal liability;

(DD) professional liability;

(EE) property-commercial;

(FF) property-residential (dwelling);

(GG) property-residential (homeowners);

(HH) rain;

(II) surety bonds (other than criminal court appearance bonds);

(JJ) umbrella-commercial;

(KK) umbrella-personal; and

(LL) workers' compensation.

(c) Form and content of transmittal form. The filing transmittal form must be typed and contain, at a minimum, the following information:

(1) company name;

(2) NAIC number of the company;

(3) company group name and group NAIC number;

(4) type of filing:

(A) new filing; or

(B) revision or replacement of an existing filing. If revising or replacing an existing filing, the TDI file number or link number of the filing that is being revised or replaced must be provided.

(5) line of insurance:

(A) all filings must specify the line of insurance for which the filing is being made;

(B) interline filings must indicate all lines of insurance to which the filing is applicable;

(C) dual filings must indicate multi-peril insurance and a specific line of insurance to which the filing is applicable;

(6) basic description of the filing:

(A) rate filing, rating manual filing, and rating rule filing;

(B) policy form;

(C) endorsement;

(D) manual rules, other than rating manual rules;

(E) reference filing--must list the TDI file number or TDI link number of the filing being referenced;

(F) credit scoring model; or

(G) underwriting guidelines;

(7) proposed effective date; and

(8) contact person, including name, telephone number, mailing address, fax number, and e-mail address (if available).

(d) Availability of transmittal form. The Filing Transmittal Form (FTF) is a form that is provided by the department for insurers who are making the filings specified in subsection (c)(6) of this section. This form may be obtained from the TDI website at www.tdi.state.tx.us.

(e) Alternative transmittal forms. An insurer may use, as an alternative, a transmittal form published by the National Association of Insurance Commissioners (NAIC) or any other transmittal form if the information included in the transmittal form, or in an addendum to the transmittal form, contains all the information required under subsection (c) of this section.

(f) The department maintains the Filings Made Easy guide to assist insurers in submitting filings and complying with statutory requirements. This guide may be obtained from the TDI website at www.tdi.state.tx.us.

(g) Filings under Divisions 4, 5, 6, 7, 8, and 9 of this subchapter must be submitted to the Texas Department of Insurance, Property & Casualty Intake Unit, 333 Guadalupe, Austin, Texas 78701 or to the Texas Department of Insurance, Property & Casualty Intake Unit, Mail Code 104-3B, P.O. Box 149104, Austin, Texas 78714-9104.

Division 6. Filings Made Easy - Rate and Rate Manual Filing Requirements

§5.9332. Filing Requirements.

(a) An insurer shall keep the following information current with the department and is not required to re-file unless affected by the proposed filing or requested by the department or commissioner:

(1) All prospective loss cost multipliers, rates, and rating manuals as required by Insurance Code Articles 5.13-2, 5.41-3, 5.55, 5.171, 21.50, and Chapter 559 or other articles that impose specific filing requirements for any line of insurance;

(2) Supplementary rating information; and

(3) Information concerning all policy fees, service fees, and other fees that are charged or collected by an insurer under Insurance Code §§4005.001 - 4005.003 or §550.001.

(b) For rates filed pursuant to Insurance Code Article 5.13-2 or 5.41-3, a filing containing rate information must contain the information described in paragraphs (1) - (3) of this subsection:

(1) A filing transmittal form as required in Division 4 of this subchapter (relating to Filings Made Easy--Filing Transmittal Form and Requirements for Property and Casualty Form, Rate, Rule, Underwriting Guideline, and Credit Scoring Model Filings).

(2) The filing memorandum briefly explaining the purpose of the filing, and all material background details relating to the filing including a statement on the overall impact of the filing. For example, a filing memorandum may include one or more of the following, as applicable:

(A) reasons for entry into a new market;

(B) reasons for offering additional coverages;

(C) reasons for offering new discounts or applying new surcharges;

(D) reasons for changing rates;

(E) changes in the insurer's goals and objectives; or

(F) an explanation of changes in insurer or insurer group operations.

(3) Rating information can be any rate pages detailing information described in subsection (a) of this section or any supporting information required by §5.9941 or §5.9960 of this title (relating to Differences in Rates Charged Due Solely to Difference in Credit Scores and Exception to Territory Rating Requirements under Insurance Code Article 5.171) or any other applicable statute or rule.

(4) In accordance with Article 5.41-3, insurers filing commercial group property rates shall clearly identify the group of businesses or the association to be insured.

(c) For rates filed pursuant to Insurance Code Article 5.55, a filing containing rating information must contain the information described in paragraphs (1) - (3) of subsection (b) of this section. An insurer may not make such filing more frequently than every six months in accordance with Insurance Code Article 5.55, §3(a).

(d) For rates filed pursuant to Insurance Code Article 21.50, a filing containing rating information must contain the information described in paragraphs (1) - (3) of subsection (b) of this section. In accordance with Article 21.50 rates must be filed at least 15 days before they are to become effective and must include a certification as described in Article 21.50, §1A(g)(4).

(e) Except as provided in Division 9 of this subchapter (relating to Filings Made Easy--Reduced Filing Requirements for Certain Insurers), insurers must provide supporting information as necessary for the department to establish that a filing produces rates which are adequate, not excessive or unfairly discriminatory for the risks to which they apply. Categories of supporting information are listed in paragraphs (1) - (7) of this subsection, but are not necessarily required for every rate filing. Insurers must only provide sufficient materials to justify specific rates or changes being proposed. To the extent the information originally submitted in a rate filing is insufficient, the department may request additional information as deemed necessary by the department or commissioner.

(1) Actuarial support. Actuarial support generally includes rate indications and support, including the data and methodologies utilized by the insurer to derive such indications. Supporting information that is submitted with a filing should include each of the following to the extent applicable:

(A) premiums at current rate level and applicable on-level factors;

(B) incurred and paid losses;

(C) loss and claim development factors;

(D) premium and loss trend factors;

(E) rate relativities (e.g., classification, territory, amount of insurance);

(F) increased limits factors;

(G) hurricane and non-hurricane catastrophe factors or loss provisions;

(H) definition of a catastrophe and how it has changed over the experience period used to calculate the provisions;

(I) deductible credits and debits;

(J) description and support for discounts and surcharges;

(K) off-balance factors if there have been changes in relativities (e.g., discounts, surcharges, territorial definitions);

(L) credibility;

(M) expense and profit provisions;

(N) for rates filed in accordance with Articles 5.55 or 21.50, profit and contingency provisions; and

(O) for rates filed in accordance with Article 5.55, the effect on premiums of individual risk variations based on loss or expense considerations.

(2) Projected and historical expense information. As applicable to the insurer's filing, the information set out in subparagraphs (A) - (C) of this paragraph should be filed. For Texas, and if applicable, country-wide experience, the insurer should provide projected and historical expense information. The loss adjustment expenses would be shown as a dollar amount as well as a ratio to incurred losses. All other expenses should be shown as a dollar amount as well as a ratio to direct written premium. All expense items should be on a direct basis.

(A) Three years of historical Texas experience for commission and brokerage expenses incurred; taxes, licenses, and fees incurred; losses incurred; and, defense and cost containment expenses incurred. These shall be the amounts, or a subset of the amounts, reported on the Exhibit of Premiums and Losses (Statutory Page 14 Data) in the insurer's Annual Statement.

(B) Three years of historical countrywide experience for commission and brokerage expenses incurred, other acquisition expenses incurred, general expenses incurred, losses incurred, defense and cost containment expenses incurred and adjusting and other loss adjustment expenses incurred. These shall be the amounts reported in the insurer's Insurance Expense Exhibit, Part III (IEE) in the insurer's Annual Statement.

(C) Three years of historical countrywide experience for each category of disallowed expenses shall be the amounts reported in the insurers' response to the annual Texas Department of Insurance Call for Disallowed Expense Data. Total other acquisition expenses and general expenses each adjusted for disallowed expenses should be listed. The total adjusted general expense percentage should reflect any necessary adjustment due to the capping of general expenses at 110% of the industry median for the line of insurance.

(D) To the extent the expense provisions that underlie the rates differ from the historical expenses, support should be provided. For filings submitted under Insurance Code Article 5.13-2, the expense provisions should be net of the disallowed expenses as defined in §5.9331 of this division (relating to Definitions). Provisions for commissions and brokerage expenses; other acquisition expenses; general expenses; taxes, licenses and fees; and profit and contingencies, should be displayed and a sum computed. In addition, a permissible loss and loss adjustment expense ratio shall be computed as unity less the sum of these expense provisions.

(3) Historical experience information. This displays an insurer's most recent five year historical experience for Texas which are the amounts, or a subset of the amounts pertinent to the subline, reported on the Exhibit of Premiums and Losses (Statutory Page 14 Data) in the insurer's Annual Statement. It also includes the most recent five year countrywide experience which are the amounts, or a subset of the amounts pertinent to the subline, reported on the insurer's IEE, part III. Direct premiums written, direct premiums earned, direct losses and defense and cost containment expenses paid, and direct losses and defense and cost containment expenses incurred are shown as well as the ratio of the incurred loss and defense and cost containment expenses incurred to direct earned premiums, for both Texas and countrywide experience.

(4) Profit provision information. A brief description of the methodology and assumptions used to arrive at the profit provisions underlying the proposed rates.

(5) Rate change information. This generally includes a rate change history, the statewide average proposed rate change for each applicable coverage, form, or classification and the total average rate change for all coverages, forms, and classifications combined, even if only the rates for some of the coverages or forms are being changed. For loss cost reference filings, rate change information would include the proposed percentage change in the underlying loss costs, the change in the insurer's loss cost multiplier, and the rate level change (i.e., the product of the change in the loss costs and the loss cost multipliers, expressed as a factor). For workers' compensation filings, change information would include the impact of the change in relativities if the filing includes adopting a new set of relativities using either the insurer's own class distribution or the industry wide distribution, the change in the insurer's deviation, and the rate level change (i.e., the product of the change in the relativities and the deviation, expressed as a factor).

(6) Loss cost reference information. This includes the following:

(A) The TDI file number, link number, or reference number of the loss costs being referenced;

(B) The derivation of the loss cost multiplier proposed including any loss cost modification factor and the following expense and profit provisions:

(i) commission and brokerage expenses;

(ii) other acquisition expenses;

(iii) general expenses;

(iv) taxes, licenses and fees; and

(v) underwriting profit and contingencies;

(C) The loss cost multiplier to be used as of the effective date of the filing; and

(D) For rate change filings, the loss cost multiplier used immediately prior to the effective date of the filing, and the effective rate level change due to any change in loss cost multiplier.

(7) Rate reference information. Rate reference information includes:

(A) A description of the rates being referenced including the line of business and TDI file number or link number;

(B) If an insurer is developing package modification factors, proposed modification factors and supporting data; and

(C) If an insurer is referencing package modification factors, a description of the package modification factor including a TDI file number or link number.

(f) Any filings that do not fully comply with all of the filing requirements described in this division may be considered incomplete and may be returned to the filer for completion with a notice stating that the filing is not complete and shall identify the additional information that is required for completion of the filing.

(g) The department may request additional information as necessary related to a rate filing, including actuarial or other reasonable support of rates as deemed necessary by the department or commissioner.

(h) Filings under this division may be combined with filings made in accordance with Division 5 of this subchapter (relating to Filings Made Easy--Requirements for Property and Casualty Policy Form, Endorsement, and Manual Rule Filings). These combined filings may utilize a single transmittal form. Filings under this division may not be combined with filings made in accordance with Division 7 or 8 of this subchapter (relating to Filings Made Easy--Underwriting Guideline Filing Requirements for Personal Automobile, Residential Property, and Workers' Compensation Insurance and Filings Made Easy--Credit Scoring Models Filing Requirements for Personal Insurance) due to distinct and separate statutes governing underwriting guidelines and credit scoring models.

(i) The department maintains the Filings Made Easy guide to assist insurers with compliance of statutory requirements. Insurers may refer to the Filings Made Easy guide for rate filing forms that insurers may use to display necessary supporting information described in subsection (e) of this section. This guide may be obtained from the TDI website at www.tdi.state.tx.us.

Division 7. Filings Made Easy - Underwriting Guideline Filing Requirements for Personal Automobile , Residential Property, and Workers' Compensation Insurance

§5.9340. Purpose. The purpose of this division is to specify underwriting guideline filing requirements under Insurance Code §38.002 and Article 5.55A for those insurers writing personal automobile insurance, residential property insurance, or workers' compensation insurance in this state.

§5.9341. Definitions. The definitions set forth in Insurance Code §38.002 apply to insurers filing underwriting guidelines for personal automobile or residential property insurance. The definitions set forth in Insurance Code Article 5.55A apply to insurers filing underwriting guidelines for workers' compensation insurance.

Division 9. Filings Made Easy - Reduced Filing Requirements for Certain Insurers

§5.9357. Filing Requirements.

(a) County mutual insurers writing non-standard personal automobile insurance. County mutual insurers required to file under the provisions of Insurance Code Article 5.13-2 may make rate filings for personal automobile according to the requirements described in this subsection if they issue policies only at non-standard rates as defined under Article 5.13-2, §13(f) and if the insurer and the insurer's affiliated companies or group have a market share of less than 3.5 percent.

(1) Insurers who qualify to file under this subsection shall file in accordance with Division 6 of this subchapter (relating to Filings Made Easy--Rate and Rate Manual Filing Requirements) with the following exceptions:

(A) Insurers must include a Certification of Article 5.13-2, §13 Exemption Compliance (EC-2) with each filing, or in lieu of submitting the EC-2, an insurer may submit a certification of compliance which certifies that the insurer writes only at non-standard rates and the market share of the insurer and the insurer's affiliated companies or group have a market share of less than 3.5 percent.

(B) In lieu of the supporting information required in §5.9332(e) of this subchapter (relating to Filing Requirements), insurers may substitute rate change information as described in §5.9332(e)(5) of this subchapter.

(2) The Certification of Article 5.13-2, §13 Exemption Compliance (EC-2) form is provided by the department for use by insurers seeking an exemption from rate fling and approval requirements pursuant to Article 5.13-2, §13. This form may be obtained from the Texas Department of Insurance website http://www.tdi.state.tx.us or by requesting such form from the Property and Casualty Actuarial Division, Mail Code 105-5F, P.O. Box 149104, Austin, TX 78714-9104.

(b) Insurers writing personal automobile insurance. An insurer that writes personal automobile insurance and that meets the criteria in the Insurance Code Article 5.13-2 §13(h), is subject to the filing requirements specified in subsection (a) of this section if:

(1) the insurer, along with the insurer's affiliated companies or group, issues personal automobile liability insurance policies only below 101 percent of the minimum limits required by the Transportation Code Chapter 601; and

(2) the insurer, along with the insurer's affiliated companies or group, has a market share of less than 3.5 percent of the personal automobile insurance market in this state.

(c) Underserved residential property. In accordance with Article 5.13-2C, §3(b) insurers otherwise exempt from the rate filing requirements of Insurance Code Article 5.13-2, shall make rate filings in accordance with this subsection. Insurers who qualify to file under this subsection shall file as required in §5.9332(a) - (b) of this subchapter (relating to Filings Made Easy - Rate and Rate Manual Filing Requirements) and must:

(1) include a Certification of Article 5.13-2C Exemption Compliance (EC-1) as specified in §5.3702 of this chapter (relating to Designation of Underserved Areas for Residential Property Insurance for Purposes of the Texas Insurance Code Article 5.13-2C).

(2) submit rate change information when applicable as described in §5.9332(e)(5) of this subchapter.

(d) Additional provisions. The following provisions apply to any rate or rate manual filing made pursuant to subsection (a), (b), or (c) of this section:

(1) The reduced filing requirements provided under this division do not affect the requirements to file supporting data under §5.9941 and §5.9960 of this chapter (relating to Differences in Rates Charged Due Solely to Difference in Credit Scores and Exception to Territory Rating Requirements under Insurance Code Article 5.171). Insurers making a rate or rate manual filing under this division may include supporting data required under §5.9941 and §5.9960 of this chapter with the filing made under this division.

(2) Any filings that do not fully comply with all of the filing requirements described in this division may be considered incomplete and may be returned to the filer for completion with a notice stating that the filing is not complete and shall identify the additional information that is required for completion of the filing.

(3) The department may request additional information related to a rate filing, including actuarial or other reasonable support of rates, as deemed necessary by the department or commissioner. The insurer shall respond by the date specified in the request.

(4) Filings under this division may be combined with filings made in accordance with Division 5 of this subchapter (relating to Filings Made Easy--Requirements for Property and Casualty Policy Form, Endorsement, and Manual Rule Filings). These combined filings may utilize a single transmittal form. Filings under this division may not be combined with filings made in accordance with Division 7 or 8 of this subchapter (relating to Filings Made Easy--Underwriting Guideline Filing Requirements for Personal Automobile, Residential Property, and Workers' Compensation Insurance and Filings Made Easy--Credit Scoring Models Filing Requirements for Personal Insurance) due to distinct and separate statutes governing underwriting guidelines and credit scoring models.



For more information, contact:

Contact Information and Other Helpful Links