In the wake of the devastation caused by Hurricane Katrina, the relocation of hurricane victims and other personal hardships sustained by residents of the Gulf Coast, the Texas Department of Insurance has determined that it is appropriate to issue this bulletin to remind insurers of their obligations pursuant to Section 5 of Article 21.49-2U of the Texas Insurance Code. These obligations apply to the writing of personal insurance in this state, including the writing of personal insurance for Texas residents affected by the hurricane or hurricane victims who relocate to Texas.
Section 5 requires that an insurer provide reasonable exceptions to the insurer's rates, rating classifications, or underwriting rules for a consumer whose credit information has been directly influenced by a catastrophic illness or injury, by the death of a spouse, child, or parent, by temporary loss of employment, by divorce, or by identity theft upon written request from an applicant for insurance coverage or an insured. In such a case, the insurer may consider only credit information not affected by the event or shall assign a neutral credit score. Section 5, (c) also allows an insurer to grant an exception to an applicant for insurance coverage or an insured for an extraordinary event not specifically listed in Section 5.
The Department urges insurers to avoid placing additional burdens on victims of Hurricane Katrina and encourages insurers to accept verbal requests in lieu of written as stated in Article 21.49-2U.
Article 21.49-2U applies to personal insurance which includes personal automobile, residential property, residential fire and allied lines insurance policies; or a noncommercial insurance policy covering a boat, personal watercraft, snowmobile, or recreational vehicle.
Questions regarding this bulletin may be directed to Gary Julian, Personal Lines Division, at 512--322-2266 or gary.julian@tdi.state.tx.us.
Mike Geeslin
Commissioner of Insurance