Adopted Sections
An agency may take final action on a section 30 days after a proposal has been 
published in the Texas Register. The section becomes effective 20 days after the 
agency files the correct document with the Texas Register, unless a later date 
is specified or unless a federal statute or regulation requires implementation 
of the action on shorter notice.
If an agency adopts the section without any changes to the proposed text, only 
the preamble of the notice and statement of legal authority will be published. 
If an agency adopts the section with changes to the proposed text, the proposal 
will be republished with the changes.
TITLE 10. COMMUNITY DEVELOPMENT
Part V. Texas Department of Commerce
Chapter 165. Allocation of Private  Activity Bonds
10 TAC sec.sec.165.1-165.8
The Texas Department of Commerce (TDOC) adopts the repeal of sec.sec.165.1-165. 
8, concerning allocation of private activity bonds, without changes to the 
proposed text as published in the November 29, 1991, issue of the Texas Register 
(16 TexReg 6893).
These sections are being repealed as a result of the passage of Senate Bill 
1070, sec.49 which transferred, to the Bond Review Board, the powers, duties, 
and obligations of the Texas Department of Commerce, relating to the allocation 
and reservation system for private activity bonds.
These sections relating to the allocation and reservation system for private 
activity bonds are obsolete as they relate to the Texas Department of Commerce. 
The department has been relieved of its powers for allocation and reservation of 
private activity bonds by Senate Bill 1070, sec.49.
No comments were received regarding adoption of the repeals.
The repeals are adopted under Texas Civil Statutes, Article 5190.9A and Senate 
Bill 1070, sec.49, 72nd Legislature, which provide that the Texas Department of 
Commerce will no longer have administrative responsibility for the private 
activity allocation and reservation system. This responsibility has been given 
to the Bond Review Board.
This agency hereby certifies that the rule as adopted has been reviewed by legal 
counsel and found to be a valid exercise of the agency's legal authority.
Issued in Austin, Texas, on March 12, 1992.
TRD-9203919
Cathy Bonner
Executive Director
Texas Department of Commerce
Effective date: April 7, 1992
Proposal publication date: November 29, 1991
For further information, please call: (512) 320-9666
       
TITLE 28. INSURANCE
Part I. Texas Department of Insurance
Chapter 5.  Property and Casualty Insurance
Subchapter A.  Automobile Insurance
28 TAC sec.5.401
The State Board of Insurance of the Texas Department of Insurance adopts new 
sec.5.401 to provide protection to applicants for private passenger automobile 
liability insurance who have not had such insurance prior to application. The 
new section is adopted with minor changes to the proposed text as published in 
the January 7, 1991, issue of the Texas Register  (17 TexReg 94). A previous 
rule regarding denial of insurance coverage to applicants who lacked prior 
insurance, 28 TAC sec.5.7015 (hereinafter referred to as the "original rule"), 
which was adopted by the board on an emergency basis, was enjoined pursuant to a 
lawsuit filed by certain insurers by a state district court judge on October 4, 
1991. The same rule was proposed on October 25, 1991, and had been set to go 
before the board for adoption when the insurance company plaintiffs in the 
above-referenced lawsuit, certain other insurers, the Texas Department of 
Insurance, and the Office of Public Insurance Counsel agreed to the provisions 
contained herein. This rule was then proposed for adoption, and the board tabled 
the original rule. Along with this agreement, the board agreed to send out a 
call for data concerning loss experience on "no prior" insureds. This data call 
is not a part of this rulemaking.
The adoption of the rule is necessary to redress arbitrary and unfair practices 
used against applicants for private passenger automobile liability insurance who 
lack prior insurance and to support greater compliance with the Texas Motor 
Vehicle Safety-Responsibility Act (Texas Civil Statutes, Article 6701h,). These 
arbitrary and unfair practices were identified and highlighted by recent 
legislation strengthening the Texas Motor Vehicle Safety-Responsibility Act. The 
board found that many uninsured motorists seeking liability insurance were being 
denied coverage or charged high rates for liability insurance because they 
lacked such insurance at the time of application. Some of the applicants had not 
needed or had not been legally required to have liability insurance, because, 
for example, they had been overseas either in the armed services or for other 
employment, had driven company cars or had not used a motor vehicle for 
transportation for some period prior to their applications. Others lacked prior 
insurance because they could not afford it, having been out of work or otherwise 
impoverished. The Board has received no credible data, to date, showing that 
applicants lacking prior insurance present greater claims risks or have worse 
driving records than applicants possessing prior insurance. The board also 
determined that "no prior" applicants who had purchased liability insurance from 
county mutual or other higher rated or nonstandard insurance companies or the 
state-created Texas Automobile Insurance Plan (Assigned Risk Plan), which 
provides automobile liability insurance for those denied coverage in the 
voluntary market, were subsequently treated as higher risk insureds because of 
their previous carrier and were denied coverage, upon policy renewal, at lower 
rates. The board has received no credible data, to date, showing that applicants 
previously insured by county mutual or other higher rated or nonstandard 
insurance companies or the Assigned Risk Plan present greater claims risks or 
have worse driving records than applicants from other insurance companies. The 
board also found that "no prior" applicants were not being informed of less 
expensive liability coverage in the Assigned Risk Plan when they were quoted 
coverage by private insurers and agents, and as a consequence the "no prior" 
applicants were paying rates above those available through the Assigned Risk 
Plan for liability insurance. The new section is intended to remedy all the 
above inequities. Certain minor changes to the rule as proposed were made by the 
State Board of Insurance for purposes of clarification. References in subsection 
(a) and subsection (b) to "group's" were changed to "group of companies'"; in 
subsection (b) the pronoun "their" was changed to "the applicant's" and the 
phrase "they apply" was changed to "the applicant applies." The phrase ", and 
the" prior to the words "quote equals or exceeds the premium available" in 
subsection (d) was changed to "which". Also in subsection (d) the words "the 
approximate cost of" were added before the word "coverage" pursuant to 
recommendations of the staff of the Department of Insurance and verbal comments 
of the Independent Insurance Agents of Texas. In addition, references to the 
"Assigned Risk Pool" in subsection (c) and subsection (d) were changed to 
"Assigned Risk Plan" because of comments filed by the Texas Automobile Insurance 
Plan.
The new section provides four specific protections to "no-prior" applicants for 
private passenger automobile liability insurance. The first provision 
(subsection (a) of the new section) provides a 120-day period suspending all 
insurers' underwriting or other criteria that make an applicant's lack of prior 
insurance the basis for declining coverage or charging higher rates to such 
applicant. This provision will allow all applicants to be underwritten on the 
same basis, that is, on their driving records and other underwriting criteria, 
and to receive such liability coverage at the lowest applicable rates of the 
insurance companies or group of companies to which they apply. The second 
provision (subsection (b)) will permit those individuals whose lack of insurance 
at the time of application may have been used by the insurer as an underwriting 
factor to receive the benefit of subsection (a). This is accomplished by 
permitting those individuals, at renewal of their current automobile insurance 
policies, to be re-underwritten without regard to the now-suspended "no prior 
insurance" criteria and to receive the lowest applicable rates of the insurance 
companies or group of insurance companies to which they apply. Subsection (b), 
which has a 180-day duration, is intended to cover the typical policy period of 
six months in order to provide protection to a substantial majority of those 
recently insured and rated by a company using the now-suspended "no prior 
insurance" criteria. The third provision (subsection (c)) protects all 
applicants from an arbitrary practice utilized by some insurance companies of 
charging higher rates to applicants solely because they were previously insured 
through a county mutual insurance company, the state-created Assigned Risk Plan, 
or other carrier usually associated with higher rated or nonstandard business. 
This provision requires that applicants for liability insurance be underwritten 
without regard to their prior insurance carrier. Subsection (c) is a permanent 
rule. The fourth provision (subsection (d)) provides for the disclosure of 
comparative rating information to certain applicants who might benefit from 
automobile liability insurance coverage through the Assigned Risk Plan. 
Subsection (d) requires all insurers and agents to disclose the approximate cost 
of automobile liability insurance coverage available in the Assigned Risk Plan 
to all applicants lacking prior insurance who have no more than one accident and 
one violation in the three years preceding their application, where such cost is 
equal to or less than the cost of coverage in the voluntary market being quoted 
to such applicants. Subsection (d) is also a permanent rule. The fifth provision 
(subsection (e)) declares that the provisions of the new section are severable 
from each other and provides that if any provision of the new section is held to 
be invalid then such invalidity shall not affect the other provisions. 
Subsection (e) is intended to maintain the separate enforceability of each 
provision of the new section in the event any one provision is held to be 
invalid.
Written comments on the proposed rule were received from an insurer, Allstate 
Insurance Company, which was one of the insurers which agreed to this proposed 
rule. Despite the comments made by Allstate in the letter described below, 
Allstate's representative at the hearing on the rule assured the board that the 
company was not withdrawing its December 20, l99l, agreement supporting the 
rule. Allstate's written comments were basically in support of the rule, but the 
company raised questions concerning, and made suggestions regarding, restricting 
the rule's coverage. Other written comments were received from an insurance 
consumer, James H. Mallett, who supported the rule but who suggested changes 
which would expand the rule. The Texas Automobile Insurance Plan did not oppose 
the rule, but suggested correcting the references to the Assigned Risk Plan. 
Verbal comments were offered at the hearing by a representative of the 
Independent Insurance Agents of Texas who did not oppose the rule but questioned 
whether, under subsection (d), an agent must provide the cost of coverage in the 
Assigned Risk Plan. In addition, Allstate, Mr. Mallett, and the Office of Public 
Insurance Counsel offered verbal comments at the hearing. Each entity's comments 
are summarized below, together with the board's responses.
Written comments of Allstate Insurance Company and response by board.
Comment: Allstate asserts the intent of the language in subsection (a) is to 
restrict the underwriting of risks based on an applicant's failure to comply 
with compulsory liability requirements.
Response: The board disagrees. The rule is intended to apply to all applicants 
with no prior insurance regardless of the reason for the lack of insurance. 
During the hearings considering the original rule, testimony was provided which 
indicated that applicants, whether in compliance with the compulsory liability 
insurance law or not, were being discriminated against because such applicants 
had no prior insurance. The board asserts that this practice is unfair 
regardless of whether or not the applicants being discriminated against had 
violated the compulsory liability insurance law and subsection (a) is intended 
to apply to stop that unfair practice for all "no prior" applicants for the 120-
day period specified.
Comment: Allstate asserts that the statement in the proposed rule's preamble in 
support of the rule purports to broaden the scope of the rule to apply to 
charging of higher rates.
Response: The board disagrees. The rule is and was always intended to apply to 
underwriting practices by which an applicant was charged a higher rate solely 
because the applicant had no prior insurance. The intended application of the 
rule is evidenced by the specific requirement in subsection (a) that stipulates 
that the insurer shall make automobile liability insurance coverage available at 
the insurance company's or group of companies' "lowest applicable rate."
Comment: Allstate asserts that it provided data which indicate the loss 
experience of "no priors" was worse than those who complied with the compulsory 
liability law.
Response: The board has reviewed the data submitted previously by Allstate and 
notes that Allstate's December 10, 1991, letter submitted in connection with the 
Board's consideration of the original rule contains data on page 9 thereof 
showing little or no difference in loss experience between "priors" and "no 
priors" in Allstate's Texas county mutual company. The board has received no 
creditable data to justify an additional charge to an applicant who has no prior 
insurance.
Comment: Allstate's agreement to subsection (a) was based upon an understanding 
that the agency would be collecting its own data.
Response: The board does plan to collect sufficient data to enable staff to 
determine the appropriateness of the higher rates charged to applicants with no 
prior insurance. The call for data will not be a part of this rulemaking.
Commnet: Allstate requests clarification that the prohibition against use of "no 
priors" is an underwriting rule for regulated companies.
Response: The board disagrees. The prohibition against use of "no priors" in 
underwriting as set forth in subsection (a) is intended to apply, as the rule 
itself states, to "each insurer writing automobile liability insurance coverage 
in Texas". The rule applies to "regulated companies" and is also intended to 
apply to non-rate regulated companies such as county mutual insurance companies, 
as Allstate and the other insurers who negotiated the language of this proposed 
rule were aware.
Comment: Allstate suggests that the provisions of subsection (c), the permanent 
restriction against the use of a prior nonstandard carrier as an underwriting 
criterion, be made temporary. In the alternative, a statement should be added to 
clarify that if data show that consideration of the previous carrier is 
justifiably an underwriting criterion, the restriction will be removed.
Response: The board rejects both of these suggestions. It is not necessary to 
amend the rule as suggested by Allstate. Allstate or any other insurer may 
petition the State Board of Insurance at any time to request repeal of this 
provision or approval of a surcharge that would be assessed based on the 
applicant's prior carrier. As discussed further below, the agency has received 
no credible data indicating that discrimination in underwriting on the basis of 
prior insurance carrier status is fair.
Comment: The State Board of Insurance has not benefitted from the presentation 
of any data regarding the higher losses Allstate asserts are produced by prior 
nonstandard insureds. Allstate claims that its studies, as illustrated in charts 
attached to its comments, support the premise that "clean drivers" are not 
necessarily "good drivers". Allstate states that its studies show that the loss 
experience for "clean drivers" in its nonstandard company, Allstate Indemnity, 
is worse than for "clean drivers" in its preferred company, Allstate Insurance. 
Allstate further claims that its studies show that the frequency of property 
damage liability claims for clean nonstandard drivers is approximately 11.7%, 
while for clean standard drivers the frequency is 7.6%. Allstate concludes from 
this data that nonstandard drivers have more accidents.
Response: Allstate or any insurer has the burden of presenting data which 
justifies the underwriting practice prohibited by subsection (c). The board 
should not be asked to approve or continue an underwriting guideline without 
justification. The data provided by Allstate to support its comment is 
questionable for the following reasons: It excludes Texas data; It excludes data 
from nine other states or metropolitan areas (several of them populous) 
including New York, New Jersey, Massachusetts and the District of Columbia; No 
definitions have been provided for "good" and "clean" drivers; There is no 
indication that all other risk or selection factors have been excluded which 
might contribute to higher losses in Allstate Indemnity over Allstate Insurance; 
and The data provided is not sufficiently comprehensive to enable the Board to 
suggest the data is applicable industry-wide.
Comment: Allstate requests clarification that the rule applies only to the 
writing of automobile liability insurance policies in compliance with the 
increased compulsory insurance requirements contained in House Bill 2. Since the 
stated objective of the rule is to facilitate compliance with such requirements, 
the board may consider tailoring the rule to serve that objective.
Response: The board disagrees. The rule was not intended to be restricted to 
automobile liability insurance policies written in compliance with the increased 
compulsory insurance requirements. The objective Allstate asserts as the sole 
objective of the rule is only one of the rule's objectives. However, the rule is 
also intended to redress injustices and abuses practiced against all applicants 
with no prior insurance which the passage of House Bill 2 highlighted for the 
board.
Oral Comments of Allstate Insurance Company, made by the counsel for Allstate 
and response by the board.
Comment: The counsel stated that he was authorized to state to the board the 
following: "Allstate was a party to the agreed compliance with the rule prior to 
its formal effectiveness. We are in no way diminishing that agreement or 
intending to depart from it or get out of it or change it in any fashion. We are 
going to comply with the voluntary agreement and, of course, with the 
promulgated rule." After further conversation with the board, he went on to say: 
"By making these comments it was not intended to imply that we're going to 
reopen any litigation or depart in any fashion from the agreement that we have 
openly made on the record, and I so state on the record here today."
Response: The Chair and a Member stated that they had understood Allstate's 
written comments to indicate that it did not plan to abide by the December 20, 
1991, agreement and that they were pleased that he clarified that the written 
comments of Allstate were not intended to indicate lack of support for the 
proposed rule or a desire to withdraw Allstate's agreement to voluntarily comply 
with the rule. A member stated that he saw nothing wrong with Allstate 
commenting in writing on the rule.
Written comments of an insurance consumer, and response by the board.
Comment: Wants insureds written during the period from December 20, 1991 (when 
the proposed rule was recommended for adoption to the board by certain insurers, 
the staff and the Office of Public Insurance Counsel), and January 20, 1992, 
when the insurers which recommended adoption of the rule began voluntary 
compliance with subsection (a) thereof, to be converted to lower rates. It is 
not fair for people who fell outside the period of the rule to pay higher rates.
Response: Subsection (b) of the rule is intended to extend the benefits of 
subsection (a) upon renewal of six-month policies of insurance sold to previous 
no prior applicants who applied for coverage before January 20, 1992, and who 
were placed in higher rated or nonstandard companies because of their lack of 
prior insurance. Insurers who negotiated the proposed rule with staff and Office 
of Public Insurance Counsel argued that cancelling and rewriting these policies 
during their term would be too costly and burdensome. Because of the agreement 
entered into on December 20, l99l, the board has not extended the scope of the 
rule in conjunction with this comment. However, the Board encourages companies 
to re-evaluate such policies and to re-write them at lower rates wherever 
possible.
Comment: The insurance consumer noted a number of ways companies were not 
abiding by the spirit of the December 20, 1991, agreement, including the 
creation of a tiered county mutuals by one insurance company group following 
what he asserts is a general trend by Texas insurers to place drivers in county 
mutuals which are not rate-regulated.
Response: The board determined that these comments went to the enforcement of 
the rule rather than to the merit of the rule itself. The board accordingly took 
these comments under advisement.
Comment: One insurance company sent out a field bulletin to its agents dated 
January 6, 1992, attached to an individual's letter of January 14, 1992, which 
states applicants with no prior insurance are to be written in the group's 
standard company. The individual asserts that under the proposed rule "no prior" 
applicants with clear driving records should be written instead in the group's 
premium company, which has the lowest rates in the group, because the rule says 
"no prior" applicants are to be written at the lowest applicable rate within a 
group of companies.
Response: The board agrees that the intent of the rule is that "no prior" 
applicants are to be underwritten without regard to their lack of prior 
insurance at the lowest applicable rate within a group of companies. Therefore, 
an applicant who would qualify for coverage in a premium company under its 
underwriting standards if its "no prior" underwriting standard were disregarded 
should be charged a premium no higher than the premium for such coverage in that 
company.
Comment: One group of companies is writing collision and comprehensive insurance 
in its county mutual while writing liability coverage in its standard company. 
The individual argues that discrimination in pricing of all types of auto 
insurance between priors and no priors is an unfair trade practice and no 
distinction should be made between liability insurance and collision and 
comprehensive insurance.
Response: The rule is applicable by its terms to liability insurance, according 
to the agreement entered into with industry on December 20, l99l. However, 
nothing in the rule prevents companies from writing collision and comprehensive 
along with liability at their lowest applicable rates without reference to lack 
of prior insurance, and the board encourages insurers to do so. In addition, the 
board has directed staff to collect data in the data call on property damage 
which should shed light on whether discrimination in pricing of collision and 
comprehensive insurance between "priors" and "no priors" is justified by a 
difference in loss experience between the two groups.
Comment: The individual expresses concern that some agents may have been 
misinformed by the Independent Insurance Agents of Texas regarding their 
obligations under subsection (d) of the rule by being told that "all the rule 
requires you to do is tell the applicant that the assigned risk plan is 
available." The individual asserts that subsection (d) appears to him to require 
an agent to "inform the applicant of coverage available; i. e., what kind it is 
and that it is equal to, or lower in premium than that quoted ... by the agent."
Response: The intent of the rule as proposed was to have agents not only say 
that coverage under the state-created Assigned Risk Plan is available but also 
to inform applicants of the premium cost for such coverage. The language of 
subsection (d) has been clarified accordingly.
Verbal Comments of an individual insurance consumer and response by the board.
Comment: Some companies have changed their marketing and underwriting guidelines 
even after agreeing to the compromise in this rule. He suggests that subsection 
(b) be amended by adding the following sentence: "The underwriting criteria to 
be used shall be that criterion in place at the time the applicant's original 
policy was written excluding any no prior guidelines." This addition will ensure 
those customers affected will not continue to be penalized by any guidelines 
developed subsequent to the compromise date of December 20, 1991.
Response: The board rejects this suggestion because the proposed language adds 
an additional element that was not a part of the original agreement. However, 
any reported evasions of the rule will be investigated by the Department of 
Insurance.
Written Comments of the Texas Automobile Insurance Plan and response by the 
board.
Comment: The text of the proposed rule in subsections (c) and (d) referred to 
the "assigned risk pool." The Texas Automobile Insurance Plan is not a "pool." 
There is no pooling of the obligation incurred by any insurer receiving an 
assignment through the plan. When an insurer receives an assignment, it becomes 
solely responsible for fulfilling the policy obligations and there is no sharing 
of these losses as would be the case in a pooling arrangement. The plan requests 
that the wording of the rule be changed to delete the reference to "pool" and 
insert in its stead the word "plan."
Response: The board agrees and the rule has been changed accordingly.
Verbal Comments of Office of Public Insurance Counsel and response by the board.
Comment: The Office of Public Insurance Counsel (OPIC) supports the proposed 
changes to the rules as clarifying the intent and not changing the original 
agreement. In particular, OPIC believes the addition of "cost of coverage" is 
necessary because some agents had been informed that they did not have to 
provide the cost of coverage in the Assigned Risk Plan. OPIC remains concerned, 
however, that despite agreement on this rule, companies are adopting other 
underwriting criteria, such as use of credit reports, to deny coverage. OPIC 
also wants to work with the board to ensure that the data call is sufficient to 
allow a decision to be made in the summer about possible extension of subsection 
(a) and subsection (b) of the rule. It is important in the data call to get data 
on "no priors" as quickly as possible.
Response: The board shares OPIC's concern about the various underwriting 
practices, and will consider whether or not an additional data call on 
underwriting practices is necessary and appropriate.
Verbal Comments of the Independent Insurance Agents of Texas (IIAT) and Response 
by the board.
Comment: The IIAT did not understand from the text of the proposed rule that 
agents were to quote to applicants the actual cost of coverage in the Assigned 
Risk Plan; therefore, the addition of the language "cost of" before "coverage" 
in subsection (d) would constitute a substantive change to the original rule. 
However, the IIAT agreed that if the board added the word "approximate" to the 
phrase "cost of coverage" it would have no objection to the changes in wording 
of subsection (d).
Response: The addition of "cost of coverage" is not a substantive change to the 
rule, which implicitly required agents and insurers to quote the cost of 
coverage in the Assigned Risk Plan. The requirement presents no onerous burden 
to agents, as the cost of coverage on Assigned Risk Plan business may be 
calculated easily. However, the board agrees that it is appropriate to require 
that the price quote be on the approximate cost of coverage, and the rule's 
wording was changed accordingly.
The new section is adopted under the Insurance Code, Article 5.10, which 
authorizes the State Board of Insurance to make and enforce rules and 
regulations not inconsistent with the provisions of Subchapter A (Motor Vehicle 
or Automobile Insurance) of Chapter 5 of the Insurance Code; the Insurance Code, 
Article 5.01, which gives the board sole and exclusive authority to determine 
and prescribe just, reasonable, and adequate rates and rating plans and 
classification of risks for motor vehicle insurers; the Insurance Code, Article 
5.09, which prohibits discrimination or distinctions in favor of an insured 
having a like hazard, in the charge of premiums for insurance; the Insurance 
Code, Article 1.04, which provides the board with the authority to determine 
policy and rules in accordance with the laws of this state; the Insurance Code, 
Article 21.49-2B, sec.12, which authorizes the board to adopt rules relating to 
the cancellation and nonrenewal of personal automobile insurance policies; and 
the Insurance Code, Article 21.49-2, which authorizes the board to prescribe, 
adopt, promulgate, and enforce reasonable rules and regulations as to the 
cancellation, nonrenewal, and in certain cases, declination, of certain policies 
of insurance, including those issued through the Texas Automobile Insurance 
Plan. Subsection (d) of the new section is additionally proposed under the 
Insurance Code, Article 21.07, sec.13, which provides the board with the 
authority to establish reasonable rules and regulations for the licensing of 
agents; the Insurance Code, Article 21.07-3, sec.21, which provides the board 
with the authority to establish reasonable rules and regulations for the 
licensing of managing general agents; and the Insurance Code, Article 21.14 
which provides the board with the authority to license local recording agents 
and solicitors. The new section affects Subchapter A of Chapter 5 of the 
Insurance Code, including Articles 5.10, 5.01 and 5.09, Chapter 1 of the 
Insurance Code, including Article 1.04, Subchapter E of Chapter 21 of the 
Insurance Code, including Articles 21.49-2B, sec.12 and 21.49-2, and affects 
Subchapter A of Chapter 21 of the Insurance Code, including Article 21.07, 
sec.13, Article 21. 07-3,  sec.21, and Article 21.14, all as heretofore 
specified and discussed. The new section amends Title 28 of the Texas 
Administrative Code, Chapter 5, Property and Casualty Insurance, Subchapter A, 
Automobile Insurance, by adding a new sec.5.401 thereto.
sec.5.401. Temporary and Permanent Requirements Regarding Underwriting Treatment 
of and Disclosure to Applicants for Private Passenger Automobile Liability 
Insurance.
(a) For 120 days from the effective date of this rule, each insurer writing 
private passenger automobile insurance in Texas shall make available automobile 
liability insurance coverage to applicants with no prior insurance subject to 
each insurer's underwriting criteria without consideration of the applicants' 
lack of prior insurance at each company's or group of companies' lowest 
applicable rate.
(b) For 180 days from the effective date of this rule, each previous "no-prior 
insurance" applicant who was written in a higher-rated insurance company will be 
re-underwritten on the applicant's renewal date subject to the underwriting 
criteria of each company to which the applicant applies at each company's or 
group of companies' lowest applicable rate.
(c) Applicants for automobile liability insurance currently or previously 
insured in a higher-rated insurance company or through the Texas Automobile 
Insurance Plan (the Assigned Risk Plan) will be underwritten without 
consideration of the applicant's prior insurance carrier.
(d) Insurers or agents who make a quote to an applicant with no prior insurance 
having no more than one accident and one violation within the past three years 
which quote equals or exceeds the premium available through the Assigned Risk 
Plan must inform the applicant of the approximate cost of coverage available 
through the Assigned Risk Plan.
(e) If any provision of this sec.5.401 or the application thereof to any person 
or circumstance is held invalid for any reason, the invalidity shall not affect 
the other provisions or any other application of said provisions which can be 
given effect without the invalid provision or application. To this end all 
provisions of this sec.5.401 are declared to be severable.
This agency hereby certifies that the rule as adopted has been reviewed by legal 
counsel and found to be a valid exercise of the agency's legal authority.
Issued in Austin, Texas, on March 18, 1992.
TRD-9203955
Linda K. von Quintus-Dorn
Chief Clerk
Texas Department of Insurance
Effective date: April 8, 1992
Proposal publication date: January 7, 1992
For further information, please call: (512) 463-6327
       
TITLE 40. SOCIAL SERVICES AND ASSISTANCE
Part I. Texas Department of Human Services
Chapter 72.  Memoranda of Understanding with Other State Agencies
Memorandum of Agreement Concerning the Texas Department  on Aging Options for 
Independent Living Program
40 TAC sec.72.2001
The Texas Department of Human Services (DHS) adopts an amendment to sec.72. 
2001, without changes to the proposed text as published in the February 11, 
1992, issue of the Texas Register (17 TexReg 1220).
Justification for the amendment is improved coordination of services and less 
duplication of effort.
The amendment will function by renewing the memorandum of agreement that 
concerns TDoA's Options for Independent Living Program.
No comments were received regarding adoption of the amendment.
The amendment is adopted under the Human Resources Code, Title 2, Chapters 22 
and 32, which authorizes the department to administer public and medical 
assistance programs.
This agency hereby certifies that the rule as adopted has been reviewed by legal 
counsel and found to be a valid exercise of the agency's legal authority.
Issued in Austin, Texas, on March 17, 1992.
TRD-9203927
Nancy Murphy
Agency Liaison, Policy and Document Support
Texas Department of Human Services
Effective date: April 15, 1992
Proposal publication date: February 11, 1992
For further information, please call: (512) 450-3765