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 Proposed The Commissioner of Insurance will hold a public hearing under Docket Number 2284 on March 26, 1997, at 9:00 a.m., in Room 100 of the Texas Department of Insurance Building, 333 Guadalupe Street in Austin, Texas, to consider a petition by the staff of the Texas Department of Insurance proposing the adoption of amendments to the Texas Residential Property Statistical Plan ("the Plan"). The petition requests consideration of five amendments to the Plan: (1) An amendment to add a field for the Insurance Services Office (ISO) Public Protection Classification; 2) an amendment to add a field for the new automatic sprinkler discount; 3) an amendment to add additional codes for new Property Protection Plan endorsements; (4) an amendment to add additional codes for new individual optional credits; and (5) an amendment to eliminate the collection of data for setting the fire record credit. Commissioner's Order Number 96-1377, dated November 25, 1996 approved the adoption of Insurance Services Office (ISO) Fire Suppression Rating system in Texas. This new system will replace the prior fire rating system involving key rates. Addition of the field to capture the Public Protection Classification used to rate residential risks is necessary to allow adjustments to fire suppression rating relativities on an ongoing basis based on loss experience. The change would become effective July 1, 1997. Commissioner's Order Number 96-1483, dated December 19, 1996 approved a premium credit for installation of an approved automatic sprinkler system. The new field added to the Plan is necessary to allow ongoing adjustments to the premium credit based on loss experience. Revision of the Plan for this purpose is also part of the Department's legislative implementation plan. The change would become effective July 1, 1997. Commissioner's Order Number 96-1435, dated December 12, 1996, approved new endorsements for Property Protection Plan policies which are detailed in the staff petition. New codes are added to the Plan to allow pricing adjustments to these promulgated endorsements on an ongoing basis based on loss experience. The change would become effective July 1, 1997. Commissioner's Order Number 97-0093, dated January 30, 1997, adopted new individual optional credits for dry hydrants. A hearing has been scheduled for March 5, 1997, to consider adoption of an optional credit for personal property identification. Addition of new codes to capture information on these credits is necessary to determine the extent of their use in the residential market and the amount of the credit offered. The change would become effective July 1, 1997. The Plan currently requires reporting companies to report the name and address of individuals reporting fire losses on each applicable claim transaction. This data was previously used in the determination of a fire record credit for cities and towns. The Department is phasing out the fire record credit by a set amount of 5.0% per year to be completed in 1998. The collection of fire record information is therefore no longer necessary. Staff is proposing the elimination of this field from the Plan for this reason and to reduce data storage costs. The change would become effective July 1, 1997. The Commissioner has jurisdiction of this matter pursuant to the Insurance Code, Articles 5.96, 5.97, 5.25, 5.28, 5.98 and 21.69. Articles 5.96 and 5.97 authorize the filing of this petition. Articles 5.25, 5.28, 5.98 and 21.69 authorize the action requested of the Commissioner. Article 5.25 authorizes the Commissioner to designate an agent to gather, audit, and compile experience of insurers writing fire and allied lines. Article 5.28 authorizes the Commissioner to gather data the Commissioner deems appropriate in determining reasonable and appropriate rates for fire and allied lines. Article 5.98 authorizes the Commissioner to adopt reasonable rules that are appropriate to accomplish the purposes of Chapter 5 of the Insurance Code. Article 21.69 authorizes the Commissioner to contract with or designate an entity to compile and maintain historical premium and loss data pursuant to statistical plans adopted by the Commissioner. Copies of the full text of the staff petition and the proposed amendments are available for review in the Office of the Chief Clerk of the Texas Department of Insurance, 333 Guadalupe Street, Austin, Texas, 78714-9104. For further information or to request copies of the petition and proposed amendments, please contact Angela Arizpe at (512) 463-6326 (refer to Reference Number P-0297-04-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, P.O. Box 149104, MC113-2A, Austin, Texas 78714-9104. An additional copy of the comment should be submitted to Kenneth Lovoy, Special Projects Director, P.O. Box 149104, MC 105-5S, Austin, Texas 78714-9104. This notification is made pursuant to the Insurance Code, Article 5.96, which exempts action taken under this article from the requirements of the Administrative Procedure Act (Government Code, Title 10, Chapter 2001). This agency hereby certifies that the proposed Manual rules have been reviewed by legal counsel and found to be a valid exercise of the agency's legal auhority. Issued in Austin, Texas, on February 12, 1997. TRD-9702066 Caroline Scott Assistant General Counsel Texas Department of Insurance Filed: February 12, 1997