Commissioner's Order No. 98-0581 issued on May 19, 1998, adopted amendments to the Texas Statistical Plan for Residential Risks (Stat Plan) as proposed by the staff of the Texas Department of Insurance. The Commissioner adopted the amendments to add fields to capture experience on "roof coverings", "premium discounts for hail-resistant roofs", the use of an "exclusion of cosmetic damage to roof coverings" endorsement, the use of an "actual cash value for roofs" endorsement, and to expand the options available in the existing "cause of loss" field.
The adopted changes are necessary in order to gather information on the use of recently adopted premium discounts for the use of hail-resistant roofing materials and to act on the long needed ability to further distinguish the cause of losses. Also added is the ability to gather data on the use of two newly approved endorsements that relate to roofs. All amendments and associated changes to the Stat Plan reporting requirements are effective January 1, 1999, with the exception of the amendments relating to the data for the "actual cash value for roofs" endorsement, which must be reported beginning July 1, 1998. Please replace the current same numbered pages with the attached revised pages in the Stat Plan. Changes are noted with strike-through or underline marks as applicable. Specific changes to the Stat Plan are as follows.
Premium Records:
Two new options have been added to fields 46-47. Option "K. Roof Coverings Discount" is to be used for voluntary premium credits given for hail-resistant roofs. Only credits that are not eligible to be reported in fields 84-88 should be reported here. Option "L. Actual Cash Value for Roofs Endorsement" is to be used to indicate that this type of endorsement is attached to a policy. These endorsements can only be written by companies who have received prior approval from the department to use them. Please note that when using fields 46-47, a corresponding premium discount amount should be reported in fields 80-82.
Fields 83-88 have been added to the Stat Plan to gather information pertaining to roof construction. Field 83 is for reporting the type of roof covering material used. Please select the predominant roof covering that best fits the roofing material used. Fields 84-88 are to be used to report the mandatory class of premium credit that is applied to a policy. The "class x credit" refers to the ratings given in the UL 2218 test, or any other test that the department may approve in the future, for hail-resistant roofs. Also to be reported here is the year in which the hail-resistant roof was installed.
Field 89 has been added to indicate the use of an "exclusion of cosmetic damage to roof coverings" endorsement. This endorsement is applicable to certain hail-resistant roofs that were given a premium credit in fields 84-88.
Loss Records:
The "cause of loss" reporting requirements were expanded and moved from field 60 to fields 90-91.
Fields 83-89 were added and are subject to the same criteria as stated above in the premium records section.
Field 92 was added to indicate the use of an "actual cash value for roof" endorsement.
Fields 93-97 were added to report the difference in the actual cash value of a roof and the replacement cost of a roof with a like kind and quality product. For example, if a damaged roof is determined to have an actual cash value of $2,500 prior to the loss occurrence, and the cost to replace this roof with a like kind and quality product would be $3,000, you would report the difference of $500 in this field. This field only applies to policies that have an actual cash value endorsement attached.
Questions relating to this bulletin should be directed to the undersigned at 512-475-3026 or Jennifer Vaughn at 512-305-8125.
Sincerely,
Gary Gola
Special Projects Director
Technical Analysis (MC 105-5S)