The Texas Department of Insurance is issuing this bulletin to remind insurers that certain rating plans for automobile insurance are prohibited by the Texas Insurance Code.
Pursuant to §1953.051 of the Insurance Code, insurers, other than county mutuals, writing private passenger or commercial automobile insurance in the state of Texas, may not assign a rate consequence to a charge or conviction for a violation of Subtitle C, Title 7, Transportation Code. A rating plan may not use any violation listed in chapters 541 to 600 of the Transportation Code, to assign any rate consequence or otherwise cause premiums to be increased whether the violation results in a charge or conviction. This proscription applies equally to new business and renewal business.
The Department urges insurers to review their automobile rating plans to ensure compliance with the above statute and make any revisions necessary. Insurers should take particular care to review rating plans for any consideration of violations of the Transportation Code as a criterion in determining rating factors, surcharges, discounts, removals of discounts, and any tier placement or other risk classification that may have rate consequences.
Subtitle C of Title 7 of the Transportation Code is available at: https://statutes.capitol.texas.gov/
Insurance Code §1953.051 is available at:
Please direct questions regarding this bulletin to the Property and Casualty Actuarial Division at 512-475-3017 or PCActuarial@tdi.state.tx.us.
Chief Actuary, P&C Actuarial Division
Property & Casualty Program