Texas Department of Insurance

Proposed Rule Action

EXEMPT FILING NOTIFICATION PURSUANT TO THE INSURANCE CODE CHAPTER 5, SUBCHAPTER L, ARTICLE 5.96

The Commissioner of Insurance, at a public hearing under Docket No. 2518 on April 16, 2002 at 10:30 a.m., in Room 100 of the William P. Hobby Jr. State Office Building, 333 Guadalupe Street in Austin, Texas, will consider a petition filed by United Services Automobile Association and USAA Lloyds Company (collectively referred to as USAA) that requests the adoption of two new residential property policy forms which include form no. HO-3RTX (homeowners policy) and form no. HO-6RTX (condominium unit owners policy) and further requests the adoption of fifty-three new endorsements for use in the State of Texas.

The USAA petition was filed pursuant to the Texas Insurance Code Article 5.35 (b), which provides that the Commissioner may adopt policy forms and endorsements of national insurers. USAA conforms to the definition of a national insurer and is, therefore, authorized to file its policies and endorsements with the Texas Department of Insurance to be considered by the Commissioner for adoption.

USAA's original petition on this matter, filed on September 2, 1997, requested the adoption of a proposed new Texas homeowners policy and condominium unit owners policy. Since the filing of the original petition, USAA and Department staff have engaged in discussions and dialogue relating to the proposed forms and endorsements. USAA has made several modifications to the homeowners and condominium unit owners policies, as originally filed, as a result of discussions with Department staff. USAA filed an amended petition on January 17, 2002 modifying its original petition and seeking approval of its national forms (HO-3RTX and HO-6RTX) and other endorsement forms.

I. USAA Homeowners Policy. The following is a general description of the coverage provided by the proposed USAA homeowners policy that has been filed for adoption by the Commissioner pursuant to Article 5.35 (b).

A. Section I-Property Coverages.

1. The policy covers the dwelling and other private structures on the premises against the risk of direct physical loss, with certain exceptions.

2. It covers personal property on and away from the premises against losses by fire or lightning, windstorm or hail, explosion, riot or civil commotion, aircraft, vehicular impact, smoke, vandalism or malicious mischief, and theft.

3. It provides loss of use which covers additional living expenses when the residence becomes uninhabitable and fair rental value when part of the premises is rented to others.

B. Section II-Liability Coverages.

1. Coverage E-Personal Liability. The policy covers payment on behalf of the insured of all sums, up to the stipulated limit, which the insured is legally liable to pay as damages because of bodily injury or property damage arising out of the residence premises or personal activities.

2. Coverage F-Medical Payments to Others. The policy covers medical and related expenses, subject to the stipulated limit, arising out of accidents to persons other than the insured and residents of the premises.

3. Additional Coverages. Additional coverage is provided for claim expenses, first aid expenses, and damage to property of others.

II. USAA Condominium Unit Owners Policy. This policy for condominium unit owners covers items of real property which are the insured's responsibility under the governing rules of a condominium association. This policy covers personal property on and away from the premises against losses by fire or lightning, windstorm or hail, explosion, riot or civil commotion, aircraft, vehicular impact, smoke, vandalism or malicious mischief, and theft. This policy also contains loss of use, additional coverages, and liability coverage provisions that are the same as those described for the USAA homeowners policy.

III. Comparison of the Proposed USAA Policies to the Currently Prescribed Texas Homeowners Policy-Form B (HO-B). The HO-B has traditionally been the predominant policy form issued in Texas for owner occupied dwellings. In the course of staff's review of USAA's proposed homeowners and condominium unit owners policies, staff has noted several differences in the coverage provided in the HO-B and that provided in the proposed USAA policy forms. Since the proposed condominium unit owners policy contains the same coverages as the homeowners policy (except that the dwelling coverage is much more limited) the restrictions and enhancements in coverage will be discussed in terms of a comparison between the USAA homeowners policy and the HO-B. However, it should be noted that most of the comparisons of coverage also apply to the condominium unit owners policies.

IV. Restrictions In Coverage. The following is a list of some of the restrictions in coverage that are contained in the proposed homeowners policy as compared to the existing HO-B. This list is not intended to cover every restriction in coverage that is contained in the proposed USAA policy forms. If more detailed coverage information is desired, a side by side comparison of the USAA homeowners policy and the HO-B and a side by side comparison of the USAA condominium unit owners policy and the HO-B-CON are available from the Department upon request.

A. Coverage for Boats, Boat Trailers, and Other Trailers.

The USAA policy provides up to $1,000 in coverage for watercraft, including their trailers, furnishings, equipment and outboard motors and other trailers not used with watercraft for losses that occur on and off premises for named perils. (See Section I-Property Coverages, Coverage C-Personal Property, Special Limits of Liability, items 3. and 4.) The USAA policy provides theft coverage for watercraft, including their trailers, furnishings, equipment and outboard motors or trailers and campers if the theft occurs on the residence premises; however, if the theft occurs off of the residence premises, theft coverage is excluded. (See Section 1-Perils Insured Against, paragraph 9) The USAA policy provides windstorm and hail coverage for boats and their trailers only if they are inside a fully enclosed building. (See Section 1-Perils Insured Against, paragraph 2.) The HO-B provides coverage up to the limits of liability that apply to Coverage B (Personal Property) for boats and boat trailers while located on land on the residence premises for all perils insured against. Additionally, the HO-B provides coverage up to the limits of liability that apply to Coverage B (Personal Property) for trailers designed for use principally off public roads (e.g., travel trailers) whether on or off premises. (See Section 1-Property Coverage, Coverage B (Personal Property), Property Not Covered, paragraphs 4. and 6.)

B. Coverage for Firearms.

The USAA policy limits the coverage for firearms to losses by the peril of theft with a maximum limit of liability of $2,000. (See Section I- Property Coverages, Coverage C-Personal Property, Special Limits of Liability, item 6.) The HO-B provides coverage for firearms to the extent described under the Perils Insured Against section of the policy, including the peril of theft, up to the limits of liability that apply to Coverage B (Personal Property.)

C. Coverage for Goldware and Silverware.

The USAA policy limits the coverage for goldware, gold-plated ware, silverware, silver-plated ware, and pewterware (this includes flatware, hollowware, tea sets, trays and trophies made of or including silver, gold or pewter) to losses by the peril of theft with a maximum limit of liability of $2,500. (See Section I-Property Coverages, Coverage C-Personal Property, Special Limits of Liability, item 7.) The HO-B provides coverage for goldware and silverware to the extent described under the Perils Insured Against section of the policy, including the peril of theft, up to the limits of liability that apply to Coverage B (Personal Property.)

D. Coverage for Golf Carts.

The USAA policy provides $3,000 coverage for golf carts and their equipment nad accessories. (See Section I - Property Coverages, Coverage C - Personal Property, Special Limits of Liability, item 9) The HO-B provides coverage for golf carts up to the limits of liability that apply to Coverage B (Personal Property) to the extent described under the Perils Insured Against section of the policy. (See Section I - Property Coverage, Coverage B (Personal Property) Property Not Covered, paragraph 3.c.)

E. Coverage for Tree Debris Removal.

The USAA policy limits the coverage for the removal of debris from a fallen tree to $500. (See Section I-Property Coverages, Additional Coverages, item 1.) The HO-B provides coverage for removal of debris from a fallen tree to the extent described under the Extensions of Coverage section of the policy up to the limits of liability that apply to the damaged property. (See Extensions of Coverage, paragraph 1.)

F. Coverage for Water Damage.

1. The USAA policy specifies that it does not include coverage for losses to a dwelling and other structures caused by constant or repeated seepage or leakage over a period of weeks, months, or years from within a plumbing, heating, air conditioning or automatic fire protective sprinkler system or from within a household appliance. (See Section I-Perils Insured Against, item 2.e.) The HO-B provides coverage for water damage from repeated and continuous seepage or leakage of water or steam from a plumbing system, heating or air conditioning system, or household appliance which occurs over a period of time. (See Section 1-Perils Insured Against, paragraph 9.)

2. The USAA policy does not cover losses to the dwelling and other structures caused by water which backs up through sewers or drains or which overflows from a sump pump, sump well, or similar device designed to drain water from the foundation area. (See Section I-Exclusions, item 1.c.(2)) Further, the USAA policy does not cover losses to personal property caused by water which overflows from a sump pump, sump well, or similar device to drain water from the foundation and it does not cover losses to personal property on the residence premises caused by accidental discharge or overflow which occurs off the residence premises. The HO-B provides coverage for damage to property covered under Coverage A (Dwelling) or Coverage B (Personal Property) for a loss caused by back up or overflow from a sewer, drain, or sump pump of sewage or water even if it is from outside the residence premises. Property covered under Coverage B (Personal Property) is specifically insured for loss caused by accidental discharge, leakage, or overflow of water or steam from within a plumbing system, heating or air conditioning system, or household appliance which may include a loss caused by water or sewage from outside the residence premises that backs up or overflows from a sewer, drain, or sump pump. (See Section 1-Perils Insured Against, Coverage B-Personal Property, paragraph 9.)

G. Coverage for Vandalism and Malicious Mischief.

1. The USAA policy excepts loss from vandalism or malicious mischief or breakage of glass if the dwelling is vacant for more than 30 days immediately before a loss. (See Section I-Perils Insured Against , item 2.d.) The HO-B provides coverage for all perils insured against for up to 60 days of vacancy. (See Section 1-Conditions, paragraph 13.)

H. USAA Policy Exclusions.

1. The USAA policy excludes loss caused by microbial organisms including but not limited to mold, mold spores, fungus, bacterium, or parasitic microorganisms. (See Section I-Exclusions, item 1.i.) Pursuant to Commissioner's Order No. 01-1105, the HO-B modified by endorsement no. HO-162A provides coverage for removal of ensuing mold, fungi, or other microbial losses caused by sudden and accidental discharge, leakage or overflow of water if the water loss is a covered loss. However, the modified HO-B does not provide coverage for the remediation of mold or fungus.

2. The USAA policy excludes loss caused by faulty, negligent, inadequate or defective planning, zoning, development, surveying, siting, design, specifications, workmanship, repair, construction, renovation, remodeling, grading, compaction; materials used in repair, construction, renovation, remodeling or maintenance of part or all of the property whether on or off of the residence premises. (See Section I-Exclusions, item 2. c.) The HO-B does not contain this exclusion.

3. USAA excludes settling, cracking, shrinking, bulging or expansion of pavements, patios, foundations, walls, floors, roofs or ceilings. (See Section I - Exclusions, 1. j.) The HO-B provides coverage for an ensuing loss caused by a covered water loss to foundations, walls, floors, ceilings, roof structures, walks, drives, curbs, fences, retaining walls or swimming pools. (See Section I - Exclusions 1. h.) In contrast, the HO-B provides dwelling foundation coverage limits up to the total amount of insurance for Coverage A (Dwelling).

I. Coverage for Personal Property.

The USAA policy does not provide coverage for business data stored in books of account, drawing, or other paper records, or electronic data processing tapes, wires, records, discs, or other software media. (See Section I-Property Coverages, Coverage C-Personal Property, item 8.) The HO-B does not contain this exception.

J. Coverage for Loss of Use.

The USAA policy limits the time allowable for payment of Additional Living Expense and Fair Rental Value to 12 months. (See Section I-Property Coverages, Coverage D-Loss of Use, item 1.) The HO-B does not have a time limitation for the payment of Additional Living Expense and Fair Rental Value.

V. Coverage Enhancements. The following is a list of some of the areas where the proposed USAA homeowners policy provides coverage that is broader than the coverage provided in the HO-B. This list is not intended to cover every enhancement in coverage that is contained in the proposed USAA policy forms. If more detailed coverage information is desired, a side by side comparison of the USAA homeowners policy and the HO-B and a side by side comparison of the USAA condominium unit owners policy and the HO-B-CON are available from the Department on request.

A. Personal Property, Special Limits of Liability.

1. The USAA policy provides a $200 limit of liability for losses of money, bank notes, gold other than goldware, silver other than silverware, platinum, coins and medals. (See Section I-Property Coverages, Coverage C-Personal Property, Special Limits of Liability, item 1.) The HO-B provides a $100 limit of liability for losses of money. (See Section 1-Property Coverage, Coverage B (Personal Property), Special Limits of Liability, paragraph 1.)

2. The USAA policy provides a $1000 limit of liability for loss of securities, accounts, deeds, evidences of debt, letters of credit, notes other than bank notes, manuscripts, personal records, passports, tickets, and stamps. (See Section I-Coverages, Coverage C-Personal Property, Special Limits of Liability, item 2.) The HO-B provides a $500 limit of liability for "Bullion/Valuable Papers". (See Section I-Property Coverage, Coverage B (Personal Property), Special Limits of Liability, paragraph 2.)

3. The USAA policy provides a $1000 limit of liability for watercraft, including their trailers, furnishings, equipment, and outboard motors and other trailers not used with watercraft while away from the residence premises. (See Section I-Coverages, Coverage C-Personal Property, Special Limits of Liability, items 3. and 4.) The HO-B excludes coverage for boats and boat trailers while away from the residence premises. (See Section I-Property Coverage, Property Not Covered, paragraphs 4. b. and 6.)

4. The USAA policy provides $1,000 coverage for loss by theft of jewelry, watches, precious and semi-precious stones, and furs. (See Section I-Coverages, Coverage C-Personal Property, Special Limits of Liability, item 5.) The HO-B provides a $500 limit of liability for loss by theft of gems, watches, jewelry or furs. (See Section I-Property Coverage, Coverage B (Personal Property), Special Limits of Liability, paragraph 3.)

5. The USAA policy provides $250 coverage for business property away from the residence. (See Section I-Coverages, Coverage C-Personal Property, Special Limits of Liability, item 8.b.) The HO-B does not provide coverage for business property away from the residence.

B. Additional Coverages.

1. The USAA policy provides an additional 5% of the limit of liability that applies to the damaged property for debris removal if the actual property damage and debris removal exceeds the limit of liability for the damaged property. (See Section I-Property Coverages, Additional Coverages, item 1.) The HO-B's debris removal coverage is included in the limit of liability that applies to the damaged property and does not add additional coverage. (See Section I-Property Coverage, Coverage B (Personal Property), Extensions of Coverage, paragraph 1.)

2. The USAA policy provides up to $500 for covered damage to any one tree, shrub or plant. (See Section I-Coverages, Additional Coverages, item 3.) The HO-B provides up to $250 for covered damage to any one tree, shrub or plant. (See Section I-Property Coverage, Coverage B (Personal Property), Extensions Of Coverage, paragraph 4.)

3. The USAA policy pays up to $5,000 in the aggregate for loss and defense costs relating to the theft or unauthorized use of credit cards or electronic fund transfer cards, forgery of checks or negotiable instruments, acceptance in good faith of counterfeit money, and expenses incurred as the direct result of identity fraud. This coverage is additional insurance. There is no deductible for Credit Card, Fund Transfer Card, Forgery and Counterfeit Money coverage but there is a $100 deductible for Identity Fraud expense coverage. (See Section 1-Coverages, Additional Coverages, paragraph 6.) The HO-B provides a $100 limit of liability (subject to a deductible) for loss by theft or unauthorized use of bank fund transfer cards. (See Section 1-Property Coverage, Coverage B (Personal Property), Special Limits of Liability, paragraph 1.)

4. The USAA policy provides coverage up to $1,000 for the insured's share of a loss assessment charged during the policy period by a corporation or association of property owners when the assessment is made as a result of direct loss to the property owned by all members collectively that was caused by a covered peril. (See Section I-Coverages, Additional Coverages, item 7.) The HO-B does not provide this coverage.

5. The USAA policy provides $250 coverage for lock replacement, with no deductible, if the dwelling door keys are stolen as part of a covered theft loss. (See Section I-Coverages, Additional Coverages, item 9.) The HO-B does not provide similar coverage.

6. The USAA policy provides up to $10,000, as an additional amount of insurance, for the cost to replace, rebuild, stabilize, or otherwise restore land, when an insured peril causes the land necessary to support the buildings insured under Coverage A (Dwelling) or Coverage B (Other Structures) to become unstable. (See Section I-Coverages, Additional Coverages, item 11.) The HO-B does not provide this coverage.

VI. USAA Homeowners Endorsements. In addition to the two proposed policy forms filed for adoption, USAA has filed fifty-three endorsements for adoption pursuant to Article 5.35 (b). Since the proposed USAA policies contain notable restrictions in the water damage coverage and the dwelling foundation coverage as compared to the coverage contained in the HO-B, a general description of the coverage that will be provided by the proposed USAA Slab or Foundation Coverage Endorsement and Water Damage Coverage Endorsement is provided. Additionally, a description of the coverage that will be provided by the proposed USAA Mold Coverage Endorsement is provided.

A. Slab or Foundation Coverage Endorsement.

The proposed endorsement provides coverage up to $15,000 for damage to the slab or foundation of the building, if the damage is caused directly by accidental discharge or leakage of water or steam, including constant or repeated seepage over a period of weeks, months, or years from within a plumbing, heating, air conditioning or automatic fire protective sprinkler system or from within a household appliance. The tear out provisions provide two alternatives and it is USAA's right to choose the alternative that it desires. The tear out provisions are as follows: (1) the cost of tearing out and replacing any part of the building necessary to repair or replace the plumbing, heating, air conditioning or automatic fire protective sprinkler system or household appliance from which the water or steam escaped, or (2) the cost to reroute the plumbing, heating, air conditioning or automatic fire protective sprinkler system or household appliance. The endorsement further specifies that the tear out costs are included in the $15,000 limit of liability. The Slab or Foundation Coverage applies only in the event of accidental discharge or leakage of water or steam, including constant or repeated seepage over a period of weeks, months, or years and does not affect any coverage provided elsewhere in the policy. The loss to the system from which the water or steam escaped is not covered. The endorsement does not provide coverage for settling, cracking, shrinking, bulging, or expansion of pavements, patios, walls, floors, roofs, or ceilings whether caused directly or indirectly by accidental discharge or leakage of water including constant or repeated seepage or leakage of steam or water over a period of time from within a plumbing, heating, air conditioning or automatic fire protective sprinkler system or household appliance, except as specifically provided in the Slab or Foundation Coverage Endorsement, regardless of any other cause or event contributing concurrently or in any sequence to the loss. The endorsement specifies that the attachment of the Slab or Foundation Coverage Endorsement does not increase the limit of liability that applies to the covered property. The endorsement further specifies that the exclusion in the policy for slab damage caused by constant or repeated leakage or seepage of water or steam (Section I-Perils Insured Against, Item 2.e.) does not apply to the coverage provided in the Slab or Foundation Coverage Endorsement.

B. Water Damage Coverage Endorsement.

The proposed endorsement provides coverage for direct physical loss consisting of water damage to property described in Coverage A - Dwelling, Coverage B - Other Structures, and Coverage C - Personal Property caused by the constant or repeated seepage or leakage of water or steam over a period of weeks, months, or years from within a heating, air conditioning or automatic fire protective sprinkler system; household appliances; or plumbing system. A plumbing system includes a shower pan, but does not include the shower stall or shower bath enclosure. The coverage includes the cost of tearing out and replacing any part of the building necessary to provide access to repair the system or appliance from which the seepage or leakage occurred. The endorsement does not provide coverage for damage caused by constant or repeated seepage or leakage of steam or water, except as specifically provided in the Water Damage Coverage Endorsement, regardless of any other cause or event contributing concurrently or in any sequence to the loss. The endorsement specifies that the attachment of the Water Damage Coverage Endorsement does not increase the limit of liability that applies to the covered property. The endorsement further specifies that the exclusion in the policy for water damage caused by constant or repeated leakage or seepage of water or steam (Section I-Perils Insured Against, Item 2.e.) does not apply to the coverage provided in the Water Damage Coverage Endorsement.

C. Mold Coverage Endorsement.

The proposed endorsement provides coverage for direct physical loss consisting of water damage to property described in Coverage A - Dwelling, Coverage B - Other Structures, and Coverage C - Personal Property caused by or consisting of mold or fungus if the mold or fungus is the direct result of a Peril Insured Against or coverage provided as an Additional Coverage. The coverage does not apply if the loss results from the insured's failure to reasonably maintain or protect the property from further damage following a covered loss. The coverage includes remediation of the mold or fungus including the following costs to: (1) treat, contain, remove or dispose of mold or fungus from covered property or to repair, restore, or replace the covered property; (2) test to detect, measure, or evaluate mold or fungus and any decontamination of the covered property. The coverage further includes payment for any necessary increase in costs which the insured incurs to maintain his/her normal standard of living when the residence premises is uninhabitable due to a covered loss caused by mold or fungus. The endorsement specifies that the mold or fungus coverage provided in this endorsement is the only coverage provided under Section I Coverage A-Dwelling, Coverage B-Other Structures, Coverage C-Personal Property, and Coverage D-Loss of Use, regardless of any other cause or event contributing concurrently or in any sequence to the loss. The limits of liability available for mold or fungus coverage are $25,000, $50,000, $75,000, or 100% of the Coverage A-Dwelling limit of liability. The endorsement specifies that the most that USAA will pay under the policy for a mold loss in any one policy period is the Limit of Liability shown on the Mold Coverage Endorsement regardless of : (1) of the number of covered losses that contribute to the resulting mold; or (2) the number of claims made during the policy period. The endorsement specifies that the attachment of the Mold Coverage Endorsement does not increase the limit of liability that applies to the covered property or the loss of use and that no deductible applies to this coverage. The endorsement specifies that except as specifically modified in the Mold Coverage Endorsement, USAA does not provide coverage for damage caused by mold or fungus regardless of any other cause or event contributing concurrently or in any sequence to the loss. The endorsement further specifies that the exclusion in the policy for microbial organisms including mold and fungus (Section I-Exclusions, Item 1.i.) does not apply to the coverage provided in the Mold Coverage Endorsement. In contrast, the Mold, Fungi, or Other Coverage endorsement that may be attached to the HO-B is available with limits of liability in the amounts of 25%, 50%, or 100% of the Coverage A (Dwelling) amount of insurance.

VII. USAA's Plan to Implement the Proposed Residential Property Policy Forms. USAA has informed the Department that when its proposed policy forms have been adopted, the proposed policy forms will be phased in for use with USAA policyholders while the policy forms promulgated by TDI will be discontinued for use with USAA policyholders. USAA has outlined the details of its plan to implement the proposed policy forms as follows:

A. New Business.

Once the proposed policy forms are adopted, USAA will write all new business on the proposed policy forms beginning January 1, 2003. The proposed policy forms limit coverage for dwelling foundation losses and water damage losses and exclude mold damage losses. At the time each new residential property policy is written, the applicant will be offered the Slab or Foundation Coverage Endorsement, the Water Damage Coverage Endorsement, and the Mold Coverage Endorsement subject to USAA's current underwriting guidelines. As a follow up, USAA will also include information regarding the availability of these endorsements, thus affording the insured another opportunity to purchase these endorsements. If a policyholder desires to continue the dwelling foundation coverage (subject to the $15,000 cap), the water damage coverage, and the mold coverage that the policyholder essentially has under the HO-B, the Slab or Foundation Coverage, Water Damage Coverage, and Mold Coverage endorsements must be purchased for an additional premium.

B. Existing Business.

USAA will begin converting renewal business to the new forms effective January 1, 2003.

1. Homeowners-Form B (HO-B). The HO-B's that are in force at the time of the conversion will be converted to the USAA policy without the Slab or Foundation Coverage, Water Damage Coverage, and Mold Coverage endorsements attached. The renewal policy packet will contain a cover sheet message informing the consumer of information in the packet regarding the various policy changes. The information will include an explanation of the Slab or Foundation Coverage, Water Damage Coverage, and Mold Coverage endorsements with an offer to purchase the endorsements for an additional premium. The endorsements will also be available for purchase at a later date subject to underwriting review.

2. Homeowners Condo-Form B (HO-CON-B). The HO-CON-B's that are in force at the time of the conversion will be converted to the USAA condominium unit owners policy without the Water Damage Coverage and Mold Damage Coverage endorsements attached. The renewal policy packet will contain a cover sheet message informing the consumer of information in the packet regarding the various policy changes. The information will include an explanation of the Water Damage Coverage and Mold Coverage endorsements with an offer to purchase the endorsements for an additional premium. The endorsements will also be available for purchase at a later date subject to underwriting review.

3. Consumer Disclosures. USAA agrees to provide an explanatory letter and a summary of coverages expressly noting where there is less coverage in the USAA policies than in the currently prescribed policies to the policyholders who are being converted from the currently prescribed Texas forms to the new USAA forms. This notice letter will be sent to the policyholders sixty (60) days in advance of the policy conversion date. This notice letter will be provided to the Department for its review prior to USAA's use of this letter.

C. Rating Information.

USAA agrees to file its initial rates and any rate changes for policies written through USAA Lloyds with the Department on an informational basis for a period of two years to allow the Department to monitor the rates on the new USAA policies. USAA also agrees to provide the Department with a copy of its loss cost analyses during the time period it is providing the rating information.

The Commissioner has jurisdiction of this matter pursuant to the Insurance Code, Articles 5.35 and 5.96.

A copy of the petition, including the exhibits with the full text of the proposed policy forms and endorsements and side by side comparisons of the proposed USAA homeowners policy and the HO-B and the proposed USAA condominium unit owners policy and the HO-B, and a copy of the exempt filing notice are available for review in the office of the Chief Clerk of the Texas Department of Insurance, 333 Guadalupe Street, Austin, Texas. For further information or to request copies of the petition, side by side comparisons, and the exempt filing notice, please contact Angie Arizpe at (512) 463-6326; refer to (Ref. No. P-0102-01).

Comments on the proposed changes must be submitted in writing within 45 days after publication of the proposal in the Texas Register, to the Office of the Chief Clerk, Texas Department of Insurance, P. O. Box 149104, MC 113-2A, Austin, Texas 78714-9104. An additional copy of the comments is to be submitted to Marilyn Hamilton, Associate Commissioner, Personal and Commercial Lines Division, Texas Department of Insurance, P. O. Box 149104, MC 104-PC, Austin, Texas 78714-9104.

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).

TRD-200201381

Lynda Nesenholtz

General Counsel and Chief Clerk

Texas Department of Insurance

Filed: March 6, 2002