SUPPLEMENTAL BULLETIN CONCERNING ADDITIONAL REVISIONS TO THE MACHINE LETTER AND SUMMARY OF RATE CHANGES BY TERRITORY CONCERNING "RESIDENTIAL PROPERTY: HOMEOWNERS, TENANTS, AND DWELLING FIRE, EXTENDED COVERAGE, ADDITIONAL EXTENDED COVERAGE AND PHYSICAL LOSS FORM BENCHMARK RATES"
On August 30, 2001, the Commissioner of Insurance (Commissioner), in accordance with the statutory requirements of Article 5.101, Texas Insurance Code, entered Commissioner's Order No. 01-0828 establishing new benchmark rates for residential property. The Department issued Bulletin No. B-0037-01 on September 13, 2001, which included the Machine Letter and detailed the changes in the benchmark rates ordered by the Commissioner by Commissioner's Order No. 01-0828. This supplemental Bulletin is necessary to correct errors contained in the attachments to B-0037-01. This Bulletin provides updated tables shown in the rating rules section of the Personal Lines Manual and used in the Machine Letter which reflect the addition of new territory 16S. In addition, this bulletin provides corrected rating examples, numbers 3c, 3d, and 5-7, to replace those included in Commissioner's Bulletin B-0037-01.
Exhibit 1 attached to this Bulletin adds to the Machine Letter updated rating rules that are also shown in the Personal Lines Manual. The three rating rules included in Exhibit 1 are the homeowners rating rule for mandatory roof covering credits, the Property Protection Program rating rule for exclusion of coverage, Endorsement No. (PPP) HO-700, and the dwelling rating rule for mandatory roof covering credits, all updated to include new territory 16S.
This Bulletin also contains revised rating examples, numbers 3c, 3d, and 5-7, attached as Exhibit 2. The changes incorporate and/or illustrate the calculation of the premium reductions due to the application of the HO-140, Windstorm, Hurricane and Hail Exclusion Agreement Endorsements. Please replace the original examples (pages 19, 20, 22-24 of the Machine Letter) provided in Commissioner's Bulletin B-0037-01 with the ones attached to this bulletin.
Also included as Exhibit 3 to this Bulletin is a summary of changes in the benchmark rates by territory for each coverage.
Please note that Commissioner's Order No. 01-0828 setting the benchmark rates for residential property insurance was amended, pursuant to motions for rehearing, by Commissioner's Order No. 01-0980, dated October 12, 2001, to correct an error in Finding of Fact No. 71 concerning the Farmers management fee. Although the correction was necessary, it does not change the calculation of the rates as set out in Commissioner's Order No. 01-0828 or the new rates as set out in the Machine Letter included with Commissioner's Bulletin No. B-0037-01.
The exhibits are available for downloading at the Department's website: www.tdi.state.tx.us. Look for Commissioner's Bulletin B-0037-01A under "Bulletins" in the "Quick Links" drop down box on the website's home page. If you are unable to download this information, a hard copy can be requested by contacting Lisa Garza at 512-475-3017. Questions regarding residential property rate filings should be directed to J'ne Byckovski, Property & Casualty Actuarial Section, at 512-305-7527.
Sincerely,
Philip Presley, FCAS, MAAA
Chief Property & Casualty Actuary
Property & Casualty
- Exhibit 1: Updated Tables in the Rating Rules of the Homeowners and Dwelling Section of the Texas Personal Lines Manual
- Exhibit 2: Amended Rating Examples, Numbers 3c, 3d, 5-7
- Exhibit 3: Summary of Territorial Rate Changes