The Commissioner of Insurance, under Commissioner´s Order Number 00-0558, has adopted an amendment to 28 TAC §5.5002, relating to inland marine insurance, that became effective June 11, 2000. The amendment deleted language in subparagraph (K) that excluded automobiles or motor vehicles from coverage as inland marine floor plan policies. The amendment also added language which is necessary to clarify the intent of this paragraph as a result of the deletion. With the amendment, insurers may provide coverage for dealers' automobile inventories as a class of inland marine insurance for which rates, rules and forms must be filed with the Texas Department of Insurance for approval. A copy of the text of 28 TAC §5.5002(5)(K) is attached for your information.
While the adoption of this amendment allows insurers to write dealers' automobile inventories as an inland marine coverage, the current regulation of dealers' automobile inventories coverage pursuant to Articles 5.06 and 5.101, Insurance Code, remains unchanged, allowing insurers the option of writing dealers' automobile inventories either as motor vehicle insurance or as inland marine insurance.
Insurers who wish to write dealers' automobile inventories coverage as inland marine must file policy forms, rules and rates with the Department for prior approval. Submissions must be filed in accordance with the filing requirements contained in " Property & Casualty Filings Made Easy", accessible on our website at www.tdi.state.tx.us.
Questions regarding this bulletin should be addressed to:
David Nardecchia, Director
Personal & Commercial Lines Division MC 104-PC
Texas Department of Insurance
P. O. Box 149104
Austin, TX 78714-9104
david.nardecchia@tdi.state.tx.us
Sincerely,
Marilyn Hamilton, Deputy Commissioner
Personal & Commercial Lines Division MC 104-PC
| TITLE 28. INSURANCE Part I. Texas Department of Insurance Chapter 5. Property and Casualty Insurance |
Adopted Section 00-0558 |
6. TEXT.
§5.5002. Texas Definition of Inland Marine Insurance.
(5) (K) Floor plan policies (filed). Covering property for sale while in possession of dealers under a floor plan or any similar plan under which the dealer borrows money from a bank or lending institution with which to pay the manufacturer, provided:
(i) such merchandise is specifically identifiable as encumbered to the bank or lending institution;
(ii) the dealer´s right to sell or otherwise dispose of such merchandise is conditioned upon its being released from encumbrance by the bank or lending institution; and
(iii) that such policies cover the merchandise in transit and do not extend beyond the termination of the dealer´s interest and shall not cover merchandise for which the dealer´s collateral is the stock or inventory as distinguished from merchandise specifically identifiable as encumbered to the lending institution.