On November 1, 2001, the Commissioner of Insurance (Commissioner), in accordance with the statutory requirements of Article 5.101, Texas Insurance Code, issued Commissioner's Order No. 01-1038 relating to changes in the benchmark rates and flexibility bands for voluntary private passenger and commercial automobile insurance. The overall change for private passenger automobile insurance is +5.3%; it is +4.6% for commercial automobile. The changes in benchmark rates by coverage are summarized in the private passenger and commercial automobile machine letters.
The Commissioner also ordered a change in the calculation of private passenger automobile ( not commercial) premiums. The rating structure for Stated Amount Physical Damage coverage now corresponds to the rating structure for Actual Cash Value.
For specific details on these changes, please refer to the instructions and examples listed in the Private Passenger Machine Letter and Rate Bulletin.
The benchmark rates ordered by the Commissioner are effective at 12:01 a.m. December 31, 2001. Article 5.101 of the Texas Insurance Code requires that within 30 days of the effective date of the benchmark rate each insurer that proposes to write that line of insurance during the effective period of the benchmark rate shall make a rate filing with the Department. The rates filed by the insurer take effect on the date specified by the insurer, but not later than the 60th day after the date of the filing of the rates with the Department. Any policy written to be effective on or after the effective date of the insurer's flex rate filing must be written using the insurer's filed rates.
The revised rates, premiums, rating factors and instructions (called the "machine letters") for companies utilizing EDP equipment to generate December 31, 2001 voluntary private passenger and commercial rates are available for downloading at the Department's website: www.tdi.state.tx.us. Look for Commissioner's Bulletin No. B-0047-01 under "Bulletins" in the "Latest News" section of TDI's website home page. Also available for downloading are the new voluntary private passenger and commercial rate tables (called the "rate bulletins"), similar in format to those that will soon appear in the Texas Automobile Rules and Rating Manual. These are available in Excel and PDF formats. These machine letters and rate bulletins include rates for risks written in the voluntary market only. The involuntary TAIPA rates will be distributed separately.
If you are unable to download the machine letters and rate bulletins, you may request a hard copy by contacting Lisa Garza 512-475-3017.
All flex rate 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 private passenger or commercial automobile rate filings should be directed to Tammy Rowland, Property and Casualty Actuarial Section, 512-475-3021.
Sincerely,
Philip O. Presley
Chief Actuary
Property & Casualty
Available for downloading: