COMMISSIONER'S BULLETIN #B-0015-07

April 13, 2007

TO: ALL INSURANCE COMPANIES, CORPORATIONS, MUTUALS, RECIPROCALS, ASSOCIATIONS, LLOYDS, OR OTHER INSURERS LICENSED TO WRITE FIRE AND ALLIED LINES, MULTIPLE PERIL CROP, FARMOWNERS MULTIPLE PERIL, HOMEOWNERS MULTIPLE PERIL, COMMERCIAL MULTIPLE PERIL, INLAND MARINE, MEDICAL MALPRACTICE, OTHER GENERAL LIABILITY, PRODUCTS LIABILITY, PRIVATE PASSENGER AUTOMOBILE, COMMERCIAL AUTOMOBILE, FIDELITY, AND SURETY IN THE STATE OF TEXAS

RE: 2007 TEXAS DISALLOWED EXPENSE CALL FOR CALENDAR YEAR 2006 EXPERIENCE

Pursuant to the authority of Texas Insurance Code §38.001, the Texas Department of Insurance requests all companies writing property, residential, medical malpractice, other general liability, products liability, fidelity, surety, and automobile insurance in Texas to submit information relating to disallowed expenses.

Article 5.13-2, §5(a)(3) of the Insurance Code, prohibits the consideration of certain incurred expenses in the determination of individual company rates for lines of insurance regulated under this article.  This call is designed to provide quantification of such "disallowed" expenses as defined under Article 5.13-2, §3(a)(1).

Please note:  §5.9331(b)(1) of Title 28 of the Texas Administrative Code provides that for filings made in accordance with Article 5.13-2 of the Insurance Code, the following are no longer considered disallowed expenses:  payments to advisory organizations licensed to do business in Texas for services authorized by Article 5.73 of the Insurance Code for the development of statistical plans, data collection and reporting, the development and distribution of prospective loss costs, supplementary rating information, policy forms and endorsements, research, and the performance of inspections, and other reasonably related activities.

This call must be completed in accordance with the general instructions and returned no later than May 15, 2007.  Underlying data, individual source documents and other information utilized in the development of your call response must be maintained in your records for a minimum of two years following the date of your submission to the department.

Please download the forms, instructions, reporting forms, and affidavit from the Department’s website.

If you do not have internet access, have an earlier version of Excel or are otherwise unable to download the forms, please contact Data Services at (512) 475-1878 to have the forms sent to you.

Submissions:

Upon completion, please save the Excel file according to the following standard:

GRP# NAIC# DER2006.xls.  Example:  GRP 1 44444 DER2006.xls  For non group filings, enter the group number as “0”.  Please e-mail the Excel file to datacall@tdi.state.tx.us, using the Excel file name as the subject, and fax the signed, notarized (ink-stamp notary seal) affidavit to (512) 463-6122.  If a crimp-style notary seal is used, please send the original affidavit to the address listed below.  If unable to e-mail submission, please send a copy of the Excel file on diskette or CD with the signed, notarized original affidavit to the address listed below.  You do not need to submit a hard copy of the report.

Mail:                                                               Courier:

Texas Department of Insurance             Texas Department of Insurance

Attn:  Charlie Lowe                                          Attn:  Charlie Lowe

Data Services (MC 105-5D)                            Data Services (MC 105-5D)

P.O. Box 149104                                             333 Guadalupe

Austin, TX  78714-9104                                  Austin, Texas  78701

Failure to comply with the requirements of this call within the time limits specified may constitute a violation or violations of the Insurance Code and may subject the insurer to the penalties provided by law.

Questions concerning this call should be directed to the Data Services Division at the Texas Department of Insurance at (512) 475-1878.

Sincerely,

Gary Gola

Director, Data Services

Forms and Instructions

For more information contact: ChiefClerk@tdi.state.tx.us