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.

ADOPTED
The Commissioner of Insurance has adopted amendments to the Texas Personal Lines 
Manual (Manual) to establish optional premium credits for homeowners and farm 
and ranch owners policies for the permanent identification of personal property 
as a protective measure against residential burglary. The commissioner has 
further adopted a form entitled "Inspector's Report For Compliance With The 
Property Identification Theft Reduction Program" that is to be used to 
demonstrate that a policyholder qualifies for the reduction in premiums. The 
Manual rules and form were proposed by department staff in a petition filed on 
January 21, 1997. Notice of the proposal (Reference No. P-0197-03-I) was 
published in the January 31, 1997, issue of the Texas Register (22 TexReg 1175). 
The Manual rules and form were considered at a public hearing on March 5, 1997, 
at 10:00 a.m., under docket number 2281 in Room 100 of the Texas Department of 
Insurance Building, 333 Guadalupe Street in Austin, Texas. 
The commissioner has adopted, without changes to the proposal as noticed in the 
Texas Register, the amendments to the Homeowners and Farm and Ranch Owners 
Sections of the Manual to establish an optional premium credit for homeowners 
and farm and ranch owners insurance policies for compliance with the Property 
Identification Theft Reduction Program. The commissioner has adopted, with two 
changes to the proposal as noticed in the Texas Register, the Inspector's Report 
for Compliance With The Property Identification Theft Reduction Program form. 
The adopted new rules to each section of the Manual are as follows: 1) In the 
Homeowners Section, Manual Rule VI-C is amended to add new item 6 "Personal 
Property Identification". 2) In the Farm and Ranch Owners Section, Manual Rule 
VI-C is amended to add new item 6 "Personal Property Identification". These 
rules specify the standards that policyholders must meet to qualify for the 
credit and provide an optional credit of up to 5% for homeowners and farm and 
ranch owners policies for those policyholders who comply with the Property 
Identification Theft Reduction Program. 
The "Inspector's Report For Compliance With The Property Identification Theft 
Reduction Program" (Inspector's Report) form was adopted with two changes to the 
proposal as noticed in the Texas Register.
Based on information provided by staff, it was recognized that it was confusing 
to both policyholders and inspectors to specify in the Inspector's Report that a 
certain number of items must be marked or photographed. The intent of the 
adopted rules is that any property listed in the rules which is present in the 
home being inspected must be marked or photographed. The language specifying a 
particular number of items to be marked or photographed would be especially 
confusing in a situation where a homeowner has fewer items than the six or four 
items specified on the Inspector's Report. Even if a homeowner has only one item 
present in his home that is listed in the rule but it is marked and the home is 
inspected, the homeowner would still be eligible for the optional credit. In 
order to avoid confusion regarding this matter, the following sentences have 
been deleted from the Inspector's Report: 1) Inspectors must check at least six 
items that have been marked. 2) Inspectors must check at least four items that 
have been photographed. The Inspector's Report is to be used by inspectors 
certified by the Texas Commission on Law Enforcement Officer Standards and 
Education to certify that the personal property at the residence has been 
permanently marked or photographed in accordance with the criteria specified in 
the rule and that there are signs or stickers visible from the outside of the 
residence that indicate the personal property contained inside the residence has 
been permanently marked. 
Commissioner's Order Number 94-1029 created the Residential Property Insurance 
Loss Mitigation Advisory Committee (Advisory Committee). The purpose of the 
Advisory Committee is to advise and make recommendations to the Commissioner of 
Insurance for reducing residential property insurance losses. The Advisory 
Committee recognized that the amount of losses paid is an important factor in 
determining insurance rates because a significant reduction in the amount of 
losses paid will ultimately reduce residential property insurance rates in 
Texas. Furthermore, the Advisory Committee recognized that many of the losses 
that occur might be eliminated or reduced through preventative measures employed 
by the insured to mitigate or prevent property losses. 
To reduce residential burglary losses, the Advisory Committee recommended the 
Property Identification Theft Reduction Program which involves permanently 
marking commonly stolen personal property in residences and posting signs or 
stickers that are visible from the outside of the residence that indicate the 
personal property contained in the residence has been permanently marked. A 
majority of the property most commonly stolen form residences has no 
identifiable markings that can be used in a recovery process. Property that is 
unmarked makes the residence a prime target for burglary because unmarked 
property recovered by law enforcement officers cannot be traced or returned to 
the owner and it cannot be used in court as evidence to prosecute the burglar. 
Without identifiable markings, stolen property can be disposed of by criminals 
who profit from the crime with virtually no risk of apprehension. 
Permanently marked personal property is a simple and cost effective method of 
reducing burglary and theft losses. A residence displaying stickers or signs 
indicating the personal property contained in the residence has been permanently 
marked is a deterrent to a burglar or thief. Permanently marked property is 
difficult for a burglar or thief to dispose of and it is acceptable evidence to 
the courts for conviction of criminals. Permanently marking personal property 
gives law enforcement officials the opportunity to identify property quickly and 
return it to its rightful owner, thus reducing the loss to insurance companies. 
The cost to individuals who choose to identify their property can be less than 
$10.00. In communities where this type of program has been implemented, a 
decrease in burglaries and thefts has occurred. 
The Advisory Committee recommended that compliance with the Property 
Identification Theft Reduction Program be recognized as a viable protective 
measure against residential burglary and further recommended amending the 
Homeowners Section and Farm and Ranch Owners Section of the Texas Personal Lines 
Manual to provide an optional credit of up to 5%. The commissioner determined 
that the credit for compliance with the Property Identification Theft Reduction 
Program would create an incentive for property owners to take protective 
measures against residential burglary losses. Based on the recommendation of the 
Advisory Committee, information provided by staff, and the testimony provided at 
the public hearing the commissioner has adopted the two amendments to the Texas 
Personal Lines Manual establishing an optional credit of up to 5% and the 
Inspector's Report form. 
The commissioner has jurisdiction of this matter pursuant to the Insurance Code, 
Articles 5.101, 5.96, and 5.98. 
The Manual rules and form as adopted by the Commissioner of Insurance are on 
file in the Chief Clerk's Office of the Texas Department of Insurance under 
Reference Number P-0197-03-l and are incorporated by reference in the Manual by 
Commissioner's Order Number 97-0244 
This notification is made pursuant to the Insurance Code, Article 5.96, which 
exempts 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. 
IT IS THEREFORE THE ORDER of the Commissioner of Insurance that Texas Personal 
Lines Manual Rules, Rule VI-C in the Homeowners Section and Rule VI-C in the 
Farm and Ranch Owners Section, as specified herein and which are attached to 
this Order and incorporated into this Order by reference, are adopted to be 
effective May 16, 1997. 
IT IS FURTHER ORDERED that the Inspector's Report For Compliance With The 
Property Identification Theft Reduction Program form which is attached to this 
Order and incorporated by reference, is adopted to be effective May 16, 1997. 
This agency hereby certifies that the adoption 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, 1997.
TRD-9703641
Robert R. Carter
Assistant General Counsel
Texas Department of Insurance
Effective date: May 16, 1997
Proposal publication date: January 31, 1997
For further information, please call: (512) 463-6327