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
Notification Pursuant to the Texas Insurance Code, Chapter 5, Subchapter L, 
Article 5.96
The Commissioner of Insurance will hold a public hearing under Docket Number 
2240 on August 26, 1996, at 10:00 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 revised Texas Residential Property Statistical 
Plan ("the revised Plan"). 
The petition requests consideration of five amendments to the revised Plan: (1) 
An amendment to note the designation of the Texas Insurance Checking Office 
(TICO) as the new statistical agent for residential property insurance in Texas 
and to indicate that transmittal forms which accompany data submissions must be 
submitted to TICO; (2) an amendment which deletes reporting requirements and 
instructions for the Foundation Exclusion endorsement and adds reporting 
requirements and instructions for the Tear Out endorsement; (3) an amendment 
which adds reporting requirements and instructions for the use of Property 
Protection Plan policy forms and endorsements; (4) an amendment which adds 
reporting requirements and instructions for the use of new large deductibles 
and; (5) an amendment to drop the term "revised" from the title of the revised 
Texas Residential Property Statistical Plan. 
The Texas Insurance Checking Office was designated as the new Texas residential 
property statistical agent effective April 10, 1996 pursuant to Commissioner's 
Order Number 96-0396. The proposed change to the revised Plan is necessary to 
reflect this fact and ensure that companies file data transmittal forms with the 
correct entity. 
The Foundation Exclusion endorsement was never implemented and will not be used. 
There is no longer a need for reporting requirements and instructions in the 
revised Plan for this endorsement. 
Commissioner's Order Number 95-1261 dated December 1, 1995 approved a series of 
endorsements as listed in the petition which restrict residential property 
coverage for the cost of tearing out and replacing any part of a building and 
land necessary to access, repair or replace that part of a plumbing drain system 
located within or under the slab or foundation of coverage. The proposed changes 
to the revised Plan are necessary to capture premium, exposure and loss 
experience associated with the use of these endorsements to monitor the use of 
these endorsements in the market place and to develop the information necessary 
to evaluate the pricing of these endorsements. Companies licensed and writing 
residential property insurance in Texas shall report these new data elements, 
effective with October 1, 1996 experience. 
The Commissioner was granted the authority to designate areas as underserved for 
residential property insurance by the 74th Legislature through Article 5.35-3 of 
the Texas Insurance Code. Commissioner's Order Number 95-1285 dated December 8, 
1995 approved the Property Protection Plan which allows the addition or 
restriction of coverage through a variety of endorsements noted in the petition 
with the intent of improving the availability of residential property insurance 
in certain areas of Texas designated as underserved. The proposed changes to the 
revised Plan are necessary to capture premium, exposure and experience of 
policies and endorsements issued under the Property Protection Plan to monitor 
the use of these policies and endorsements in the market place, to develop the 
information necessary for the pricing of these policies and endorsements and to 
verify the amount of premium written for policies and endorsements issued under 
the Property Protection Plan for purposes of premium tax credits. Companies 
licensed and writing residential property insurance in Texas shall report these 
new data elements, effective with October 1, 1996 experience. 
Commissioner's Order Number 95-1084 dated October 17, 1995 approved new 
deductible levels for residential property policies. The proposed changes to the 
revised Plan are necessary to capture premium, exposure and loss experience 
associated with the use of the new large deductible amounts to monitor the use 
of the new deductible amounts in the market place and to develop the information 
necessary for the pricing of these deductibles. Companies licensed and writing 
residential property insurance in Texas shall report these new data elements, 
effective with October 1, 1996 experience. 
Staff believes the continued use of the word "revised" in the title of the 
revised Plan is unnecessarily confusing. The term "revised" was originally used 
to refer to the revised Texas Residential Property Statistical Plan adopted by 
the Commissioner of Insurance on December 1, 1994 under Commissioner's Order 
Number 94-1291. Continued use of the title "revised Texas Residential Property 
Statistical Plan" as additional revisions are made is unnecessary and may create 
confusion in future references. This change becomes effective October 1, 1996. 
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 Angie Arizpe at (512) 463-6326 (refer to Reference Number P-0796-30-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 Birny Birnbaum, Associate 
Commissioner for Policy and Research, P.O. Box 149104, MC113-1C, 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 has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on July 17, 1996.
TRD-9610265
Caroline Scott
General Counsel and Chief Clerk
Texas Department of Insurance
Filed: July 17, 1996