This bulletin notifies county mutual insurance companies (county mutuals) of changes to rate and rate manual filing requirements adopted because of HB 2449, 81st Legislature, Regular Session, which amended Insurance Code §912.056. The department requests the completion of a verification form to compile a list of "grandfathered" county mutuals.
For the purposes of this bulletin, a grandfathered county mutual under §912.056 is one that as of September 1, 2001, and continuously thereafter, appointed managing general agents (MGAs), created districts, or organized local chapters to manage a portion of the company's business independent of all other business of the county mutual. A grandfathered county mutual may continue to operate in that manner only if the company
• cedes 85 percent or more of the company's direct and assumed risks to one or more reinsurers; and
• has private passenger automobile insurance business with a market share of not greater than five percent or that is predominantly nonstandard.
Chapter 28, Texas Administrative Code (28 TAC) §5.9361 requires the following additional information in rate and rate manual filings for grandfathered county mutuals:
• the name and license number of the MGA, district, or local chapter;
• a list of policy forms and endorsements, including the name, number, and the department file number used by the MGA, district, or local chapter;
• contact information for the county mutual; and
• information required under 28 TAC 5.9332 relating to filing requirements that is specific to the MGA, district, or local chapter.
The Filings Made Easy guide, at http://www.tdi.texas.gov/pubs/pc/pccpfme1.html, includes an additional information form to assist with compliance. If the required information is contained in the company's filing, this form is optional. The department may reject rate filings from grandfathered county mutuals if the license number of the MGA, district, or local chapter is not clearly identified.
The department requests that each county mutual complete the attached verification form. If the county mutual is grandfathered under §912.056, mark the box labeled "Grandfathered by §912.056" and provide the requested information. If the county mutual is not grandfathered by §912.056, mark the box labeled "Does not apply." Please return the verification form by December 16, 2011, by email at pcactuarial@tdi.state.tx.us; by fax at 512-463-6122; or by mail to P&C Actuarial, MC 105-5F, P.O. Box 149104, Austin, TX 78714-9104.
Please direct questions regarding this bulletin to the Property and Casualty Actuarial Office at 512-475-3017 or pcactuarial@tdi.state.tx.us.
Cassie Brown
Deputy Commissioner
Regulatory Policy Division
Attachment:
Verification Form