The purpose of this bulletin is to inform you about the Geographical Underwriting System (GUS) and its use in conjunction with Public Protection Classifications.
The Geographical Underwriting System used to identify the location of a risk for the purposes of applying the appropriate Public Protection Classification may provide an incorrect PPC for certain areas in Texas. The identification of the location of a risk is based on geographic information supplied by the Insurance Services Office (ISO) to a vendor indicating city limit boundaries of cities and towns in Texas. If a city or town has annexed an area, and that information has not been entered into the system, a specific risk may be identified on GUS as being outside the city limits of a city or town when in fact the risk is located inside the city limits due to annexation. Although this does not happen frequently, it does occur. Therefore, insurers should be aware of the possibility of misrating certain risks because the information contained in the GUS does not include annexations that have not been reported to ISO or to the vendor.
If the premium for a renewal policy indicates that a substantial increase has occurred, insurers should check the location of the risk to determine if the appropriate PPC has been applied to the specific risk. In instances where an inappropriate PPC has been applied, insurers should correct the policy premium from the inception date of the policy to reflect the correct PPC and return any difference in premiums to the insured.
Alexis Dick
Deputy Commissioner
Inspections Group, MC 103-1A
512-463-6674