Texas Department of Insurancewww.tdi.state.tx.us - Consumer Helpline 1-800-252-3439
COMMISSIONER'S BULLETIN NO. B-0049-97December 15, 1997 TO: ALL INSURANCE COMPANIES, CORPORATIONS, MUTUALS, ASSOCIATIONS, OR OTHER INSURERS WRITING RESIDENTIAL PROPERTY INSURANCE IN THE STATE OF TEXAS Re: Residential Property: Homeowners, Tenants, Dwelling Fire, Extended Coverage, Additional Extended Coverage and Physical Loss Form Benchmark Rates On August 21, 1997, the Commissioner of Insurance, in accordance with the statutory requirement of Article 5.101, Texas Insurance Code, made the following determinations as they relate to benchmark rates for residential property, homeowners, tenant homeowners, dwelling fire, extended coverage, additional extended coverage and physical loss form insurance rates. The Commissioner ordered changes in benchmark rates for the above-listed residential property coverages. The overall residential property rate change is +11.8%. The changes in benchmark rates by coverage are summarized in the attached machine letter. Please note that the conversion to the Public Protection Class (PPC) system is incorporated in this machine letter. The PPC system is intended to take the place of the current Key Rate system. Senate Bill 1499, effective September 1, 1997, for insurance policies delivered, issued for delivery, or renewed on or after January 1, 1998, changed the rates for Farm and Ranch owners and Farm and Ranch coverage from benchmark to file and use rates. Since the rates determined in the Commissioner´s Order become effective after January 1, 1998, the Commissioner did not set benchmark rates for Farm and Ranch owners and Farm and Ranch coverage. The changes in the benchmark rates ordered by the Commissioner are effective February 1, 1998. For flex rate filings, Article 5.101 of the Texas Insurance Code states that within 30 days of the effective date of the benchmark rates each insurer that proposes to write that line of insurance during the effective period of the benchmark rates shall make a rate filing with the Texas Department of Insurance. The new rates take effect on the date specified by the insurer, but not later than the 60th day after the date of filing of the rates with the Department. From and after the effective date of the benchmark, February 1, 1998, and prior to the new filing, the insurer´s previously filed rates shall remain in effect. Any policy effective on or after the effective date of the new flex rate filing must be written using the new rates. Enclosed for your use are revised rates and rating factors for companies utilizing EDP equipment to generate the February 1, 1998, rates. The benchmark rates and rating factors in this bulletin incorporate the conversion to the PPC system and also incorporate the new rating rules associated with this conversion. The enclosed rates and rating factors are for risks written in the regulated market. Please refer to the enclosed rating samples for homeowners and dwelling coverages for complete, detailed examples of the new rating rules. These examples are intended to incorporate most of the rating rules in the new Texas Personal Lines Manual, and as such, do not necessarily represent scenarios that would actually occur. Also, please note that the only material changes made to the rate tables at the December 3, 1997, hearing to adopt the new Texas Personal Lines Manual were to the Dwelling Extended Coverage Territory Multipliers for territories 8, 9 and 10. Other minor changes to correct typographical mistakes and misspelled words were made which do not affect the content of this machine letter. All flex filings should be submitted to: TEXAS DEPARTMENT OF INSURANCE Questions regarding residential property rate filings should be directed to Charles Lowe, Property & Casualty Actuarial Section, (512) 475-3019, or to Christi Wooley, Property & Casualty Actuarial Section, (512) 475-3016. Sincerely, Philip Presley, FCAS, MAAA For further information, contact: ChiefClerk@tdi.state.tx.us |
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