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You are here: Home . rules . 2006 . 1219-059

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 (Commissioner) adopts the amendments proposed by the Texas Department of Insurance (Department) staff in a petition (Ref. No. W-1006-21-I) filed on October 20, 2006. Notice of the proposal was published in the November 3, 2006, issue of the Texas Register (41 TexReg 3059). No comments were received on the proposed changes and no hearing was requested. The amendments are adopted without changes.

The adopted amendments include revised Texas Workers' Compensation Classification Relativities (classification relativities) to replace those adopted in Commissioner's Order No. 05-0906, dated October 18, 2005, 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) concerning the Expected Loss Rates and Discount Ratios used in experience rating.

The Commissioner has jurisdiction over this matter pursuant to Articles 5.60 and 5.96 of the Insurance Code. Article 5.60(a) authorizes the Commissioner to determine hazards by classes and fix classification relativities applicable to the payroll in each class for workers' compensation insurance. Article 5.60(d) provides that the Commissioner revise the classification system at least once every five years.

The Commissioner has determined that it is necessary to revise the classification relativities and the Basic Manual as proposed by staff in the petition so that the classification relativities and the Basic Manual are based on the most recent experience data available.

The revised classification relativities schedule and Basic Manual table have been on file with the Office of the Chief Clerk of the Department since October 23, 2006, and are incorporated by reference into this Commissioner's Order.

This adoption is made pursuant to Article 5.96 of the Insurance Code, which exempts actions taken under it from the requirements of the Administrative Procedures Act (Government Code, Title 10, Chapter 2001).

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

The Department hereby certifies that the amendments to the classification relativities and the Basic Manual have been reviewed by legal counsel and found to be a valid exercise of the Department's authority.

IT IS THEREFORE THE ORDER of the Commissioner of Insurance that the amendments to the classification relativities and the Basic Manual proposed by the staff petition (Ref. No. W-1006-21-I) 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 March 1, 2007, unless the insurer makes an independent filing to justify insurer-specific classification relatives.

IT IS FURTHER ORDERED that the amendments to the Basic Manual apply to all policies with an effective date on or after March 1, 2007.



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