EXEMPT FILING NOTIFICATION PURSUANT TO THE INSURANCE CODE CHAPTER 5, SUBCHAPTER L, ARTICLE 5.96 ADOPTION OF REVISED WORKERS' COMPENSATION CLASSIFICATION RELATIVITIES AND AMENDMENTS TO THE TEXAS BASIC MANUAL OF RULES, CLASSIFICATIONS AND EXPERIENCE RATING PLAN FOR WORKERS' COMPENSATION AND EMPLOYERS' LIABILITY INSURANCE UPDATING THE EXPECTED LOSS RATES AND DISCOUNT RATIOS TABLE
The Commissioner of Insurance (Commissioner) adopts the amendments proposed by the Texas Department of Insurance (Department) staff in a petition (Ref. No. W-0907-10-I) filed on September 4, 2007. Notice of the proposal was published in the September 14, 2007, issue of the Texas Register (32 TexReg 6381). The amendments were considered at a public hearing held under Docket No. 2671 on October 3, 2007, at 9:30 a.m., in Room 100 of the William P. Hobby Building, 333 Guadalupe Street in Austin, Texas. No comments were received on the proposed changes. The amendments are adopted without changes to the proposed amendments.
The adopted amendments include revised Texas Workers' Compensation Classification Relativities (classification relativities) to replace those adopted pursuant to Commissioner's Order No. 06-1309, dated December 15, 2006; and a revised table concerning the Expected Loss Rates and Discount Ratios by classification used in experience rating, which is contained in the Texas Basic Manual of Rules, Classifications and Experience Rating Plan for Workers' Compensation and Employers' Liability Insurance (Basic Manual).
The Commissioner has jurisdiction over this matter pursuant to Article 5.96 and §2053.051 and §2053.052 of the Insurance Code. Section 2053.051 requires the Department to determine hazards by classification and establish classification relativities applicable to the payroll in each classification for workers' compensation insurance. Section 2053.052 requires the Commissioner to adopt a uniform experience rating plan for workers' compensation insurance. Section 2053.051 and §2053.052 provide that the classification system and experience rating plan be revised at least once every five years. Article 5.96 authorizes the Department to prescribe, promulgate, adopt, approve, amend, or repeal standard and uniform manual rules, rating plans, classification plans, statistical plans, and policy and endorsement forms for various lines of insurance, including workers' compensation insurance.
The Commissioner has determined that it is necessary to revise the classification relativities and the Basic Manual as proposed by staff in the petition so that the classification relativities and the Basic Manual are based on the most recent experience data available.
The revised classification relativities schedule and Basic Manual table have been on file with the Office of the Chief Clerk of the Department since September 4, 2007, and are incorporated by reference into this Commissioner's Order.
This adoption is made pursuant to Article 5.96 of the Insurance Code, which exempts actions taken under it from the requirements of the Administrative Procedures Act (Government Code, Title 10, Chapter 2001).
The Department hereby certifies that the amendments to the classification relativities and the Basic Manual have been reviewed by legal counsel and found to be a valid exercise of the Department's authority.
IT IS THEREFORE THE ORDER of the Commissioner of Insurance that the amendments to the classification relativities and the Basic Manual proposed by the staff petition (Ref. No. W-0907-10-I) are adopted.
IT IS FURTHER ORDERED that the revised classification relativities are available for immediate use by insurers and that their use is mandatory for all policies with an effective date on or after January 1, 2008, unless the insurer makes an independent filing to justify insurer-specific classification relatives.
IT IS FURTHER ORDERED that the amendments to the Basic Manual apply to all policies with an effective date on or after January 1, 2008. AND IT IS SO ORDERED.
TRD-200705139
Gene C. Jarmon
General Counsel and Chief Clerk
Texas Department of Insurance
Filed: October 24, 2007