Order Updating Consumer Bills of Rights

TEXAS DEPARTMENT OF INSURANCE
EXEMPT FILING NOTIFICATION PURSUANT TO THE INSURANCE CODE
CHAPTER 5, SUBCHAPTER L, ARTICLE 5.96

ADOPTION OF A REVISED
CONSUMER BILL OF RIGHTS FOR
PERSONAL AUTOMOBILE INSURANCE AND
A REVISED CONSUMER BILL OF RIGHTS FOR
HOMEOWNERS, DWELLING AND RENTERS INSURANCE

The Commissioner of Insurance, pursuant to deliberation after a public hearing held March 29, 2001, at 9:00 a.m. under Docket No. 2482 in Room 100 of the William P. Hobby Jr. State Office Building, 333 Guadalupe Street, Austin, Texas adopted amendments proposed by Staff to amend the " Consumer Bill of Rights for Personal Automobile Insurance" and the " Consumer Bill of Rights for Homeowners, Dwelling and Renters Insurance" and corresponding revisions to the requisite manual rules and Special Instructions for the auto policy. Staff´s petition was filed on February 13, 2001; notice of this petition (Reference No. AP-0201-02-I) was published in the February 23, 2001, issue of the Texas Register (26 TexReg 1753). The Consumer Bills of Rights set forth a summation of consumers´ most important rights with regard to each line of insurance, including consumers´ rights to receive information from the Department of Insurance and their insurers, rights relating to buying insurance, rights regarding cancellation and refusal to renew policies, rights regarding claims made under policies, rights regarding non-discrimination, and enforcement rights. Since the original publication of the Consumer Bills of Rights in 1993, legislative acts and departmental actions have resulted in changes affecting both policyholders and insurers. It is necessary to incorporate these changes so that insurers will be distributing to current and future policyholders updated information informing them of their rights.

The Commissioner adopted the proposal as noticed in the February 23, 2001, issue of the Texas Register, with grammatical and typographical corrections, as well as other changes to the revised Consumer Bills of Rights as follows: The language referring to unfair discrimination between individuals of the same class and of essentially the same hazard has been deleted from each of the Consumer Bills of Rights since the interpretation of the statute which is the subject of this language is currently in litigation. The words "or access to less expensive coverage offered by other insurance companies represented by your agent or insurance company representative" have been deleted from item 4 in each Consumer Bill of Rights so as to track more specifically the statute that is the subject of that right relating to "Buying Insurance." An additional note has been added to item 4 in each Consumer Bill of Rights to clarify the duties regarding this right as applied to insurance companies and independent agents. The word "statistically" has been deleted from item number 28 in the Consumer Bill of Rights for Personal Automobile Insurance and from item number 24 in the Consumer Bill of Rights for Homeowners, Dwelling and Renters Insurance so as to track more specifically the statute that is the subject of that right relating to "Discrimination." At the end of the "Discount" section of the Consumer Bill of Rights for Personal Automobile Insurance, the language regarding county mutuals has been clarified to note that the amount of a discount, if offered, is determined by the county mutual and may be different from those percentages listed in the bill of rights. In the "Enforcing Your Rights" section of the Consumer Bill of Rights for Personal Automobile Insurance, item number 32 begins with the newly added phrase, "If you file a claim under your comprehensive or collision coverage," which more accurately reflects the right to demand appraisal, and for clarity, the references to "the" insurance company have been changed to "your" insurance company. The Spanish language translations have also been revised in accord with the changes noted herein in addition to grammatical and typographical corrections. The adopted rules: (1) implement Insurance Code Article 1.35A, Sec. 5(b)(8), which provides that the Public Counsel for OPIC "shall submit to the department for adoption a consumer bill of rights appropriate to each personal line of insurance regulated by the department to be distributed upon the issuance of a policy by insurers to each policyholder under rules adopted by the department;" (2) update the current bills of rights to reflect the changes brought about by legislative acts and departmental actions that affect both policyholders and insurers; (3) incorporate these changes so that insurers will be distributing to current and future policyholders updated information informing them of their rights; and (4) update the bills of rights in general to provide simplified language and to clarify various provisions.

The adoption revises the " Consumer Bill of Rights for Personal Automobile Insurance" which revised version is required to be distributed with each new policy and with the next renewal notice to the current policyholder pursuant to the Texas Automobile Rules and Rating Manual, Section I, General Rules, 16. The adoption also makes editorial revisions to rule 16 and further revises the Texas Standard Provisions for Automobile Policies, Special Instructions for the Texas Personal Auto Policy, by adding new number 12, to reflect the requirement of providing a " Consumer Bill of Rights for Personal Automobile Insurance" in accord with rule 16 of the Texas Automobile Rules and Rating Manual.

Additionally, the adoption reflects the following:
(1) The document has been updated to reflect legislative acts and departmental actions.
(2) The document has been updated in general to provide simplified language and to clarify various provisions.
(3) The reference to required discounts has been revised.
(4) The references to insureds´ rights under the Texas Automobile Insurance Plan Association (TAIPA) have been updated.
(5) The "Claims" provisions have been revised.
(6) The addresses of the department and OPIC have been updated and expanded to include electronic addresses.

The adoption revises the " Consumer Bill of Rights for Homeowners, Dwelling and Renters Insurance" which revised version is required to be distributed with each new policy and with the next renewal notice to the current policyholder pursuant to the Texas Personal Lines Manual, Homeowners Section V. General Requirements, F. There are also adopted updated and editorial revisions to item F and further revisions to the Texas Personal Lines Manual, Dwelling Section V. General Requirements, by adding new item I, to require insurers writing dwelling policies to distribute the revised " Consumer Bill of Rights for Homeowners, Dwelling and Renters Insurance" with each new policy and with the next renewal notice to the current policyholder pursuant to this new provision in the Dwelling Section.

Additionally, the adoption reflects the following:
(1) The document has been updated to reflect legislative acts and departmental actions.
(2) The document has been updated in general to provide simplified language, to clarify various provisions, and to reflect the application to dwelling policies thus creating a change in the title of the Bill of Rights.
(3) The reference to required discounts has been added.
(4) The reference in the Information section about the Market Assistance Program (MAP) has been included.
(5) The "Claims" provisions have been revised.
(6) The addresses of the department and OPIC have been updated and expanded to include electronic addresses.

The adopted revisions are more particularly set forth in the " Consumer Bill of Rights for Personal Automobile Insurance" that is attached hereto as Exhibit A and made a part hereof for all purposes, and in the " Consumer Bill of Rights for Homeowners, Dwelling and Renters Insurance" that is attached hereto as Exhibit B and made a part hereof for all purposes. Also attached hereto and made a part hereof for all purposes are Exhibit C which sets forth revisions to the Texas Automobile Rules and Rating Manual, Section I, General Rules, 16; Exhibit D which sets forth revisions to the Texas Standard Provisions for Automobile Policies, Special Instructions for the Texas Personal Auto Policy by adding new number 12 and re-numbering the former number 12; and Exhibit E which sets forth revisions to the Texas Personal Lines Manual, Homeowners Section V. General Requirements, F, and which adds a new item I to the Dwelling Section V. General Requirements, and re-letters the former items I and J. In accord with the requirements of the manual rules, the department has also developed Spanish translations of the revised Bills of Rights; thus, attached hereto as Exhibit F and made a part hereof for all purposes is the Spanish translation of the revised " Consumer Bill of Rights for Personal Automobile Insurance," and attached hereto as Exhibit G and made a part hereof for all purposes is the Spanish translation of the revised " Consumer Bill of Rights for Homeowners, Dwelling and Renters Insurance."

The Commissioner of Insurance has jurisdiction over this matter pursuant to the Insurance Code, Articles 1.35A, 5.06, 5.10, 5.35, 5.96, 5.98, 5.101, and §31.002.

The items referenced herein which are adopted by the Commissioner of Insurance are on file in the Chief Clerk´s Office of the Texas Department of Insurance under Reference No. AP-0201-02-I and are incorporated by reference into Commissioner´s Order No. 02-0507.

This notification is made pursuant to the Insurance Code, Article 5.96, which exempts it from the requirements of the Government Code, Chapter 2001 (Administrative Procedure Act).

Consistent with the Insurance Code, Article 5.96(h), the Department will notify all insurers affected by this action of this adoption by letter summarizing the Commissioner´s action.

This agency hereby certifies that the amendments as adopted have been reviewed by legal counsel and found to be a valid exercise of the agency´s authority.

Issued in Austin, Texas on May 15, 2002.

__[Lynda H. Nesenholtz]______

Lynda H. Nesenholtz

General Counsel and Chief Clerk
Texas Department of Insurance

IT IS THEREFORE THE ORDER of the Commissioner of Insurance that the revisions to the "Consumer Bill of Rights for Personal Automobile Insurance" and "Consumer Bill of Rights for Homeowners, Dwelling and Renters Insurance" and the respective Spanish translations of same as described herein and as set forth in the attached exhibits attached to this Order and incorporated into this Order by reference, and that the corresponding revisions and additions to the Texas Automobile Rules and Rating Manual, Section I, General Rules, 16; the Texas Standard Provisions for Automobile Policies, Special Instructions for the Texas Personal Auto Policy, new number 12; the Texas Personal Lines Manual, Homeowners Section V. General Requirements, F, and the Dwelling Section V. General Requirements, new item I, as described herein and set forth in the exhibits attached to this Order and incorporated into this Order by reference, be and hereby are adopted and applicable to be effective on the 90th day after publication of the notification of the Commissioner´s action in the Texas Register.

__[Jose Montemayor]_________

Jose Montemayor

Commissioner of Insurance

REVIEWED BY:

__[Marilyn Hamilton]____________
Marilyn Hamilton
Associate Commissioner
Property and Casualty Division

ATTEST:

__[Lynda H. Nesenholtz]_________
Lynda H. Nesenholtz
General Counsel and Chief Clerk
Texas Department of Insurance

COMMISSIONER ORDER NO.: 02-0507

Texas Department of Insurance
Created/Updated 06-05-2002