TEXAS DEPARTMENT OF INSURANCENotification Pursuant to the Insurance Code, 
Chapter 5, Subchapter LAs required by the Insurance Code, Article 5.96 and 5.97, 
the Texas Register publishes notice of proposed actions by the Texas Board of 
Insurance. Notice of action proposed under Article 5.96 must be published in the 
Texas Register not later than the 30th day before the board adopts the proposal. 
Notice of action proposed under Article 5.97 must be published in the Texas 
Register not later than the 10th day before the Board of Insurance adopts the 
proposal. The Administrative Procedure Act, the Government Code, Chapters 2001 
and 2002, does not apply to board action under Articles 5.96 and 5.97.
The complete text of the proposal summarized here may be examined in the offices 
of the Texas Department of Insurance, 333 Guadalupe Street, Austin, Texas 78714-
9104.)
This notification is made pursuant to the Insurance Code, Article 5.96, which 
exempts it from the requirements of the Administrative Procedure Act.

Texas Department of Insurance
EXEMPT FILING NOTIFICATION PURSUANT TO THE INSURANCE CODE CHAPTER 5, SUBCHAPTER 
L, ARTICLE 5.96 ADOPTION OF REVISED TEXAS WORKERS' COMPENSATION CLASSIFICATION 
RELATIVITIES AND AMENDMENTS TO THE TEXAS BASIC MANUAL OF RULES, CLASSIFICATION 
AND EXPERIENCE RATING PLAN FOR WORKERS' COMPENSATION AND EMPLOYERS' LIABILITY 
INSURANCE TO UPDATE EXPECTED LOSS RATES AND DISCOUNT RATIOS 
The Commissioner of Insurance has adopted the revised Texas Workers' 
Compensation Classification Relativities (Classification Relativities) and the 
revised table which amends the Texas Basic Manual of Rules, Classification, and 
Experience Rating Plan for Workers' Compensation and Employers' Liability 
Insurance (Manual) as it concerns expected loss rates and discount ratios. The 
revisions were proposed by Department staff in a petition filed on June 24, 
1996. Notice of the proposal (Reference Number W-0696-24-I) was published in the 
July 2, 1996, issue of the Texas Register (21 TexReg 6087). The revisions were 
considered at a public hearing held on August 15, 1996, at 9:00 a.m., under 
Docket Number 2234 in Room 100 of the Texas Department of Insurance Building, 
333 Guadalupe Street in Austin, Texas. The Commissioner adopted with changes to 
the proposal as noticed in the Texas Register, revised Classification 
Relativities and revised expected loss rates and discount ratios as contained in 
the Manual.
Based on written comments on the proposal, the Commissioner has adopted the 
schedules of Classification Relativities with changes to certain classifications 
that had been combined for ratemaking purposes in 1994 and had not been combined 
in the proposed version. The adopted schedules display the Classification 
Relativities in the combined format. 
Based on oral comments on the proposal, the Commissioner has adopted the 
Classification Relativities with additional slight modifications to the 
Classification Relativities as proposed. The modifications resulted from 
incorporating experience data that had previously not been reported to the 
National Council on Compensation Insurance, Inc. and consequently had not been 
considered in the calculations of the Classification Relativities. The effects 
on the Classification Relativities that had been proposed is approximately 0.3%. 
There are corresponding changes in the proposed expected loss rates and no 
changes in the discount ratios. The Commissioner has determined that the 
revisions to the Classification Relativities and the revisions to the expected 
loss rates and discount ratios contained in the Manual which are necessary to 
more accurately reflect the changes in experience due to enactment of 
legislation as well as the changes that occur with the passage of time due to 
occurrences such as technological advances and improvement in safety programs. 
The Commissioner has jurisdiction of this matter pursuant to the Insurance Code, 
Articles 5.60 and 5.96. 
The revised Classification Relativities and the revised expected loss rates and 
discount ratios are on file in the Chief Clerk's Office of the Texas Department 
of Insurance under Reference Number W-0696-24-I and are incorporated by 
reference into Commissioner Order Number 96-1038. 
The notification is made pursuant to the Insurance Code, Article 5.96, which 
exempt action taken under Article 5.96 from the requirements of the 
Administrative Procedure Act (Government Code, Title 10, Chapter 2001). 
Consistent with the Insurance Code, Article 5.96(h), prior to the effective date 
of this action, the Texas Department of Insurance will notify all insurers 
affected by this action. 
This agency hereby certifies that the adopted revised Classification 
Relativities and the revised expected loss rates and discount ratios contained 
in the Manual have been reviewed by legal counsel and found to be a valid 
exercise of the agency's legal authority.  
IT IS THEREFORE THE ORDER of the Commissioner of Insurance that the revised 
Texas Workers Compensation Classification Relativities are adopted. IT IS 
FURTHER ORDERED that the revised table which amends the Texas Basic Manual of 
Rules, Classifications, and Experience Rating Plan for Workers' Compensation and 
Employers' Liability Insurance as it concerns expected loss rates and discount 
ratios are adopted effective January 1, 1997. 
Issued in Austin, Texas, on September 13, 1996.
TRD-9613496
Caroline Scott
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: January 1, 1997
Filed: September 13, 1996