ADOPTION OF DRUG AND ALCOHOL DRIVING AWARENESS TRAINING CREDITS, FOR THE TEXAS AUTOMOBILE RULES AND RATING MANUAL

The Commissioner of Insurance, at a public hearing under Docket No. 2426 held at 9:00 a.m., November 23, 1999 in Room 100 of the William P. Hobby Jr. State Office Building, 333 Guadalupe Street in Austin, Texas, adopted amendments proposed by Staff to the Texas Automobile Rules and Rating Manual (the Manual), Rule 74, including Section E.3., drug and alcohol driving awareness training credits, and also Rules 77 and 79. The amendments' purpose is to implement the provisions of the Insurance Code, Article 5.03-4, adopted by the 76th Legislature in House Bill 3757. Staff's petition (Ref. No. A-1099-17-I) was published in the October 22, 1999, issue of the Texas Register (24 TexReg 9315).

Three portions of Manual Rule 74, Private Passenger Auto Classifications, will be amended. Directly following the rule's caption, the following words will be deleted: "Applicable to Liability and Collision Insurance." This deletion is needed because some portions of the rule (both current and revised) also apply to Medical Payments and Personal Injury Protection coverage. The parenthetical phrase directly following the above deletion will be amended to read as follows, "(Unless otherwise specified, this rule does not apply to risks rated in accordance with the miscellaneous types rule.)" (Emphasis is used only to show additional language.) This additional wording is needed because Section E.3. will apply to miscellaneous type vehicles.

The paragraph following the caption of Rule 74.E., driver credits, currently reads, "This rule does not apply to an auto that is subject to experience rating or is a miscellaneous type vehicle." The following sentence will be added to that paragraph: "However, Subsection 3, drug and alcohol driving awareness training credits, applies to a miscellaneous type vehicle."

Rule 74.E.3. will be amended in several ways, as mandated by statute, but some of the current wording of Section E.3. is to be retained, such as the amount of the credit (5%). One of the required changes is to delete references to Texas A&M University, Safety Education Program and to restrict the credit to persons who complete programs that are regulated and approved by the Texas Education Agency (TEA) under the Texas Driver and Traffic Safety Education Act, Texas Civil Statutes, Article 4413(29c). The current duration of three years for the 5% credit is to be removed, as the new statutory discount is unlimited in duration. If a covered person is convicted of DWI or a similar offense, then any person under the policy (unless the convicted person is excluded from the policy) will be ineligible for the credit for seven years from the conviction date, but will then become eligible, regardless of when the program was completed. All those who had completed the program would then resume receiving the discount.

Rule 77, Miscellaneous Type Vehicles, and Rule 79, Motorcycle Operator Credits, will be amended so as to make it more obvious that revised Rule 74.E.3. will apply to miscellaneous type vehicles (which include motorcycles, motor scooters, etc.). The amendment to Rule 77 will consist of adding a second paragraph under the rule's caption, which new paragraph will read as follows: "Rule 74.E.3., drug and alcohol driving awareness training credits, applies to a miscellaneous type vehicle." The amendment to Rule 79 will consist of adding a first paragraph following the explanatory note that follows the rule's caption, which new paragraph will read as follows: "Rule 74.E.3., drug and alcohol driving awareness training credits, applies to motorcycles or similar vehicles described in this rule."

For a policy that becomes effective prior to January 1, 2000, the current provisions of Rule 74.E.3. will apply. However, when such a policy terminates on or after January 1, 2000, the credit will no longer apply for the completion of a program that does not meet the requirements of Article 5.03-4, regardless of when the training occurred. The Insurance Code, Article 5.03-4(d) provides in part:

A person is not eligible for, and an insurer may not offer, a premium discount applicable to a personal motor vehicle insurance policy for completion of a drug and alcohol driving awareness program that does not use the applicable uniform curriculum developed under the Texas Driver and Traffic Safety Education Act (Article 4413(29c), Vernon's Texas Civil Statutes).

The amendments as adopted by the Commissioner of Insurance are shown in exhibits on file with the Chief Clerk under Ref. No. A-1099-17-I, which are incorporated by reference into Commissioner's Order No. 00-0085.

The Commissioner of Insurance has jurisdiction over this matter pursuant to the Insurance Code, Articles 5.03-4, 5.10, 5.96, 5.98, and 5.101.

This notification is made pursuant to the Insurance Code, Article 5.96, which exempts it from the requirements of the Government Code, Chapter 2001 (Administrative Procedure Act).

Consistent with the Insurance Code, Article 5.96(h), the Department will notify all insurers writing automobile insurance of this adoption by letter summarizing the Commissioner's action.

This agency hereby certifies that the amendments as adopted have been reviewed by legal counsel and found to be a valid exercise of the agency's authority.

TRD-200000480

Lynda Nesenholtz

General Counsel and Chief Clerk

Texas Department of Insurance

Filed: January 25, 2000