28 TAC §5.205
The Texas Department of Insurance proposes amendments to
28 TAC §5.205, concerning the Automobile Theft Prevention Authority (ATPA)
pass-through fee. Section 5.205 (a) authorizes insurers to recoup from policyholders
the $1 fee per motor vehicle year required to be paid by insurers to the ATPA
under Texas Civil Statutes, Article 4413(37) §10. Section 5.205 (b) provides
the manner in which the notice of the fee is to be included on motor vehicle
insurance policies. Section 5.205 (c) specifies the type of policies that
are to be assessed the $1 fee and the basis on which the fee will be assessed.
Section 5.205 (d) exempts certain types of motor vehicle policies from the
fee requirement.
The amendments are necessary to harmonize 28 TAC §5.205 with recent
amendments to 43 TAC §57.48 adopted by the ATPA. The ATPA adopted amendments
to 43 TAC §57.48 to clarify the types of motor vehicles and the types
of insurance policies that are subject to the statutory fee of $1 per motor
vehicle year of insurance. New paragraphs (3) and (4) of 43 TAC §57.48
have been added to define the term "motor vehicle" as referenced in Article
4413(37) §10, and to clarify that all "motor vehicle insurance" policies
(as those terms are defined in the Insurance Code), with certain exceptions,
are subject to the $1 fee. Article 4413(37) §10 (2) refers to "motor
vehicle" in defining the term "motor vehicle years," in connection with computing
the amount of assessment for an insurance company. Article 4413(37) §10
does not define "motor vehicle insurance" or "motor vehicle." The Texas Department
of Insurance in 28 TAC §5.205 (c) has specified that the $1 fee is to
be assessed only on "primary liability" motor vehicle insurance. The recently
adopted amendments by the ATPA to 43 TAC §57.48 do not restrict the fee
to only primary liability policies. The ATPA's amendments define "motor vehicle
insurance," as it is defined in Article 5.06 of the Insurance Code, to mean
"every form of insurance on any automobile, or other vehicle hereinafter enumerated
and its operating equipment or necessitated by reason of the liability imposed
by law for damages arising out of the ownership, operation, maintenance, or
use in this State of any automobile, motorcycle, motorbicycle, truck, truck-tractor,
tractor, traction engine, or any other self-propelled vehicle, and including
also every vehicle, trailer or semi-trailer pulled or towed by a motor vehicle,
but excluding every motor vehicle running upon fixed rails or tracks." The
ATPA's amendments significantly broaden the definition of motor vehicle insurance
because they do not restrict the assessment of the $1 fee to only primary
liability insurance (as it has been specified in 28 TAC §5.205) thus
the ATPA's section is in conflict with 28 TAC §5.205.
The department recognizes that Article 4413(37) §6 gives the ATPA
the authority to adopt rules and implement its powers and duties including
the authority to interpret and define the terms "motor vehicle" and "motor
vehicle insurance," as these terms relate to the assessment of the $1 fee.
The department proposes to delete §5.205 (c) to remove the restriction
on the assessment of the $1 fee to only primary liability insurance. The department
also proposes to delete §5.205 (d) and allow the ATPA's section to specify
those types of motor vehicle insurance that are to be exempt from the fee
assessment. The department further proposes to delete the reference to primary
liability insurance in subsection (b) and add a reference to motor vehicle
insurance "as defined in 43 TAC §57.48 (relating to Motor Vehicle Years
of Insurance Calculations)."
David Durden, deputy commissioner for the automobile and homeowners division
of the Texas Department of Insurance, has determined that for the first five-year
period the proposed amendments are in effect, there will be no fiscal implications
for state or local units of government as a result of enforcing or administering
the section. Mr. Durden also has determined there will be no other implications
for the local economy and no impact on local employment as a result of administering
the proposed amendments.
Mr. Durden also has determined that for each year of the first five years
the proposed amendments are in effect the public benefit anticipated as a
result of enforcing or administering the proposed amendments will be that
the department's rules will be in accord with the ATPA's rules concerning
the assessment of the $1 fee. Another anticipated public benefit as a result
of enforcing the proposed amendments will be a reduction in motor vehicle
theft in the state and a concomitant reduction in motor vehicle insurance
premiums. There is no anticipated adverse economic effect on large or small
insurers who are required to comply with the proposed amendment because insurers
are authorized to recoup the fee from the policyholder.
Comments on the proposal to be considered by the department must be submitted
within 30 days after publication of the proposed amendments in the Texas Register
to Lynda H. Nesenholtz, General Counsel and Chief Clerk, Texas Department
of Insurance, P.O. Box 149104, Mail Code 113-2A, Austin, Texas, 78714-9104.
An additional copy of comments should be submitted to David Durden, Deputy
Commissioner, Automobile and Homeowners Division, P. O. Box 149104, MC 104-5A,
Austin, Texas, 78714-9104. A request for public hearing on the proposed amendments
must be submitted separately to the Office of Chief Clerk.
The amendments to §5.205 are proposed pursuant to Texas
Civil Statutes, Article 4413(37) §10; the Insurance Code, Articles 5.06,
5.98, and 1.03A; and the Government Code §§2001.001
et seq.
Texas Civil Statutes, Article 4413(37) §10 requires insurers
to pay to the ATPA a fee equal to $1 multiplied by the total number of motor
vehicle years of insurance for insurance policies delivered, issued for delivery
or renewed by the insurer during the calendar year. Article 5.06 §(1)
authorizes the commissioner to adopt a policy form and endorsements for each
type of motor vehicle insurance. Article 5.98 authorizes the commissioner
to adopt reasonable rules and rates that are appropriate to accomplish the
purposes of Chapter 5. Article 1.03A authorizes the commissioner to adopt
reasonable rules and regulations, which must be for general and uniform regulation,
for the conduct and execution of the duties and functions of the department
only as authorized by a statute. The Government Code, §§20001.001 et seq.
(Administrative Procedure Act) authorize
and require each state agency to adopt rules of practice stating the nature
and requirements of available formal and informal procedures and prescribe
the procedures for adoption of rules by a state administrative agency.
The following articles of the Insurance Code are affected by this section:
Insurance Code, Articles 5.06; 5.98.
§5.205.Automobile Theft Prevention Authority Pass-Through Fee.
(a)
(No change.)
(b)
Any insurer recouping the fee from the policyholder as
authorized by subsection (a) of this section must include on or with each
motor vehicle insurance policy
, as defined in 43 TAC §57.48 (relating
to Motor Vehicle Years of Insurance Calculations), that is
[
providing
primary liability coverage
] delivered, issued for delivery, or renewed
in this state on or after October 5, 1992, including those policies issued
through the Texas Automobile Insurance Plan, a notice conforming with either
paragraph (1) or paragraph (2) of this subsection.
(1)-(2)
(No change.)
[(c)
All automobile policies providing primary
liability coverages shall be assessed the $1.00 fee per motor vehicle year
except for those policies specifically excepted in subsection (d) of this
section. For purposes of this section, the term "motor vehicle year" shall
mean one motor vehicle insured for one year.]
[(d)
The fee shall not be assessed or recouped
on garage liability policies, nonresident policies, policies providing only
non-ownership or hired auto coverages, and any motor vehicle insurance policy
not providing primary liability coverage.]
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State, on
February 22, 1999.
TRD-9901035
Lynda H. Nesenholtz
General Counsel and Chief Clerk
Texas Department of Insurance
Earliest possible date of adoption: April 4, 1999
For further information, please call: (512) 463-6327