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Texas Department of Insurance
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The Commissioner of Insurance, at a public hearing under Docket No. 2544 scheduled for January 22, 2003 at 1:30 p.m., in Room 100 of the William P. Hobby Jr. State Office Building, 333 Guadalupe Street in Austin, Texas, will consider a proposal made in a petition, filed by staff. Staff’s petition seeks amendment of the Texas Automobile Rules and Rating Manual (the Manual), Rule 74.D. in regard to the two or more autos credit (multi-car discount). Staff’s petition (Ref. No. A-1202-44-I), was filed on December 11, 2002.

Staff proposes to add a provision to Manual Rule 74.D. to allow for the expansion of the multi-car discount on an optional basis to include autos assigned to certain classes of drivers in addition to those specified in the current mandatory multi-car discount provisions. Specifically, for the proposed expansion of the multi-car discount on an optional basis, autos assigned to any or all of the youthful operator classes could be used to qualify other autos for the discount and/or could receive the discount. Staff also proposes that the entire discount (both the mandatory and the optional portions) apply to all autos that meet the rule's eligibility and ownership requirements, if such autos are covered with one company, regardless of whether the coverage is through more than one policy. Staff proposes other changes that are editorial in nature, including changing the current title from "Two or more autos credit" to "Multi-car discount."

Staff’s petition is derived in part from a petition (Ref. No. A-0602-25) filed by the Insurance Council of Texas (Council) that proposes to expand the current mandatory multi-car discount to apply to autos assigned to youthful operators and to business use operators, both for qualification purposes and for receipt of the discount. Staff’s position is that available statistics do not support the broad expansion of the multi-car discount proposed by the Council at the present time; however, staff is aware of some statistical support for adding an optional discount to the current mandatory discount so that an insurer may elect to use autos assigned to youthful operator classes to qualify other autos and/or to receive the discount. It is possible that in the future there may be enough statistical support to justify making this discount mandatory through a benchmark rate hearing under Insurance Code Article 5.101.

Under current Manual Rule 74.D., no auto assigned to any youthful operator class may be used to qualify other autos for the discount or may receive the discount. Staff is not proposing that autos assigned to business use operators be allowed to receive the optional multi-car discount because, as previously stated, statistics do not justify that result. However, autos assigned to business use operators would continue to qualify other autos for the current mandatory discount as well as for the proposed optional discount.

A copy of staff’s petition, including an exhibit with the full text of the proposed amendments to the Manual is available for review in the office of the Chief Clerk of the Texas Department of Insurance, 333 Guadalupe Street, Austin, Texas. For further information or to request copies of the petition, please contact Sylvia Gutierrez at 512-463-6327; refer to (Ref. No. A-1202-44-I).

Comments on the proposed changes must be submitted in writing within 30 days after publication of the proposal in the Texas Register, to the Office of the Chief Clerk, Texas Department of Insurance, P. O. Box 149104, MC 113-2A, Austin, Texas 78714-9104. An additional copy of comments is to be submitted to Marilyn Hamilton, Associate Commissioner, Property & Casualty Program, Texas Department of Insurance, P. O. Box 149104, MC 104-PC, Austin, Texas 78714-9104.

This notification is made pursuant to Insurance Code Article 5.96, which exempts it from the requirements of the Government Code, Chapter 2001 (Administrative Procedure Act).

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