Commissioner’s Bulletin # B-0050-4

This bulletin announces an upcoming call for information for the 2005 Automobile and Homeowners Insurance Rate Guides published by the Texas Department of Insurance (TDI).

All companies in the top 80 percent of market share and currently writing automobile or homeowners insurance for new customers in Texas after December 1, 2004, will be required to respond to this request. For the automobile rate guide, rate estimates will be collected for liability-only coverage for seven hypothetical driver profiles. For the homeowners rate guide, rate estimates will be collected for the type of policy that a company is most likely to offer new customers for eight hypothetical homeowner profiles. You will be asked to provide rate estimates for 66 selected ZIP codes in Texas. The 66 selected ZIP codes have been grouped into nine regions.

This information is requested under authority of Section 38.001 of the Texas Insurance Code.

In early December, companies will be contacted by e-mail and provided with the web address and a password to access the online data collection form. In the meantime, the attached instructions and worksheets are being provided to help you compile the data required to respond to this request.

The deadline for submitting your rate estimates and other information via the online data collection form will be January 14, 2005.

If you have additional questions, please call Melissa Hield at 512-322-4349 or Richard Lee at 512-463-6534, or you may e-mail ConsumerProtection@tdi.state.tx.us.

Sincerely,

Jose Montemayor
Commissioner of Insurance

Texas Department of Insurance
2005 Auto and Homeowners Insurance Rate Guides

AUTO RATE GUIDE

INSTRUCTIONS FOR CALCULATING AND ENTERING RATES

Enter premium rate estimates in the online data collection form on TDI´s website for seven hypothetical driver profiles in 66 "representative" Texas ZIP codes. Please use the following guidelines when calculating your rate information and submitting your data:

• Use an identical set of rating criteria (credit score and any other criteria your company uses) for each ZIP code.
• Calculate the annual premium that will be in effect on December 1, 2004, for personal liability insurance only (BI + PD) for each driver profile in each of the ZIP codes listed.
• Calculate premiums based on the policy type used by the company that meets the state´s minimum 20/40/15 liability coverage requirements and that the company is most likely to offer new customers.
• Assume the driver drives to work, except where stated.
• Add any monthly installment fees normally charged to the premium.
• Provide the base rate only - do not include any discounts.
• Multiply the monthly or semiannual premium amount by the appropriate number to calculate a 12-month premium.
• Check "NA" on the data entry form if the company does not offer coverage to new customers in a particular driver profile or ZIP code.

Driver Profiles:

• Driver 1: Single male age 18 with no tickets or accidents
• Driver 2: Married male age 18 with no tickets or accidents
• Driver 3: Male or female, age 25, single or married, with no tickets or accidents
• Driver 4: Male or female, age 35, single or married, with no tickets or accidents
• Driver 5: Male or female, age 55, single or married, with no tickets or accidents
• Driver 6: Male or female over age 64 with no tickets or accidents who drives for pleasure and errands only
• Driver 7: Male or female over age 64 with no tickets or accidents

2005 Auto Insurance Rate Guide

ZIP Codes List

Texas Department of Insurance
2005 Auto and Homeowners Insurance Rate Guides

HOMEOWNERS RATE GUIDE

INSTRUCTIONS FOR CALCULATING AND ENTERING RATES

Enter premium rate estimates in the online data collection form on TDI´s website for eight hypothetical homeowner profiles in 66 "representative" Texas ZIP codes. Please use the following guidelines when calculating your rate information and submitting your data:

• Use an identical set of rating criteria (credit score and any other criteria the company uses) for each ZIP code.
• For each ZIP code, use the PPC code shown on the list provided by TDI.
• Enter the annual premium that will be in effect on December 1, 2004, in each of the ZIP codes listed.
• Calculate premiums based on the policy type used by the company that you are most likely to offer new customers. Enter the policy type in the field provided.
• Calculate premiums based on a policy with $100,000 coverage on the house, $40,000 on its contents, and a 1 percent ($1,000) deductible.
• Add any monthly fees you normally charge to the premium.
• Only include discounts pertaining to the age of the house.
• Multiply the monthly or semiannual premium amount by the appropriate number to calculate a 12-month premium.
• Check "NA" on the data entry form if the company does not offer coverage to new customers in a particular homeowner profile or ZIP code.

Homeowner profiles:

• Homeowner 1: Owns a new brick veneer home
• Homeowner 2: Owns a new frame home
• Homeowner 3: Owns a 6-year-old brick veneer home
• Homeowner 4: Owns a 6-year-old frame home
• Homeowner 5: Owns a 15-year-old brick veneer home
• Homeowner 6: Owns a 15-year-old frame home
• Homeowner 7: Owns a 25-year-old brick veneer home
• Homeowner 8: Owns a 25-year-old frame home

2005 Homeowners Insurance Rate Guide

ZIP and PPC Codes List

DISCOUNTS OFFERED

You will be asked to indicate the discounts your company offers to your auto and homeowners policyholders. Following are the discounts which will be listed in the online data collection form.

AUTO INSURANCE DISCOUNTS

Worksheet

HOMEOWNERS INSURANCE DISCOUNTS

Worksheet

Texas Department of Insurance
2005 Auto and Homeowners Insurance Rate Guides

AUTO RATE GUIDE WORKSHEET

Central Texas

Coastal Texas

North Texas

Panhandle/Plains

Permian Basin/Concho Valley

South Texas/Rio Grande Valley

Southeast Texas

Texas Big Country

West Texas

Texas Department of Insurance
2005 Auto and Homeowners Insurance Rate Guides

HOMEOWNERS RATE GUIDE WORKSHEET

Central Texas

Coastal Texas

North Texas

Panhandle/Plains

Permian Basin/Concho Valley

South Texas/Rio Grande Valley

Southeast Texas

Texas Big Country

West Texas