On April 10, 2000, the Commissioner of Insurance (Commissioner), in accordance with the statutory requirements of Article 5.101, Texas Insurance Code, entered Order No. 00-0401 establishing new benchmark rates for residential property, which is composed of homeowners, tenants, dwelling fire, extended coverage, additional extended coverage and physical loss form. The Commissioner ordered changes in benchmark rates for the above-listed residential property coverages. The overall residential property rate change is -5.8%. The changes in benchmark rates by coverage are summarized in the attached machine letter and rate bulletin. The Commissioner has also set a maximum discount for adding HO-140, the Windstorm, Hurricane and Hail Exclusion Agreement Endorsement on policy forms HO-A, HO-B, HO-C, CON-B and CON-C equal to 70% of the homeowners basic premium and the premium for the HO-101 Replacement of Personal Property Endorsement, if any.
The changes in the benchmark rates ordered by the Commissioner are effective June 15, 2000. 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 rates, June 15, 2000, and prior to the effective date of the new filing, the insurer's previously filed rates shall remain in effect unless the insurer makes an additional filing based on the previous benchmark rate for new policies or policies renewing prior to the specified effective date of its new rates.
Please refer to the enclosed rating samples for homeowners and dwelling coverages for detailed examples of the rating rules. These examples are intended to illustrate most of the rating rules in the Texas Personal Lines Manual, and as such, do not necessarily represent scenarios that would actually occur.
All flex filings should be submitted to:
TEXAS DEPARTMENT OF INSURANCE
PROPERTY AND CASUALTY INTAKE UNIT (MC 104-3B)
P.O. BOX 149104
AUSTIN, TX 78714-9104
Questions regarding residential property rate filings should be directed to Natali Teszler, Property & Casualty Actuarial Section, 512-305-6747.
Sincerely,
Philip Presley, FCAS, MAAA
Chief Property & Casualty Actuary
Technical Analysis Division