Commissioner’s Bulletin # B-0040-97

The Commissioner of Insurance, by Commissioner's Order No. 97-0904, Docket No. 2296, has adopted amendments to the Texas Automobile Rules and Rating Manual, Rule 41, Certified Risks-Financial Responsibility Laws, and Endorsements 571 and TE 99 82A. Manual Rule 41 is amended by changing the premium charge for attachment of appropriate Financial Responsibility Certification endorsements to a flat $20 premium charge for the insured for whom the certificate is filed. Endorsements 571 and TE 99 82A, redesignated as 571A and TE 99 82B, respectively, are also reworded. The $20 amount replaces the current premium charge, which consists of 10% of the basic limits bodily injury and property damage liability premium that would be paid by the insured for whom the certificate is filed.

Under the Texas Motor Vehicle Safety Responsibility Act, the Department of Public Safety (DPS) under some circumstances must require a vehicle operator to provide "evidence of financial responsibility." This may be done by filing with DPS the certificate of an insurance company certifying that an auto liability insurance policy is in effect for the benefit of that operator. Such a certificate is called an SR-22, which is referenced in Manual Endorsements 571 and TE 99 82A. Each endorsement provides for an additional premium charge and sets forth the insurer's obligation to give prior written notice to DPS before cancellation or termination of the policy.

Based upon information presented by Staff, including analysis by the Technical Analysis Division, it was found that $20 is adequate to cover an insurer's cost regarding certification. Rule 41 is amended accordingly, and Endorsements 571 and TE 99 82A also are amended to reflect this change. The amendment of those endorsements consists partially of eliminating references to Bodily Injury Liability and Property Damage Liability, as the premiums for those coverages are not relevant. In order to avoid the possible need for amending these endorsements in the future because of inflation, a blank space is being left in each endorsement for the charge to be made.

The amendments were adopted to become effective November 11, 1997.