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. Exempt Filing Notification Pursuant to the Insurance Code Chapter 5, Subchapter L, Article 5.96 PROPOSED The Commissioner of Insurance, at a public hearing under Docket Number 2258 scheduled for November 19, 1996, at 10:00 a.m., in Room 100 of the Texas Department of Insurance Building, 333 Guadalupe Street in Austin, Texas, will consider a proposal made in a staff petition. Staff's petition seeks amendment of the Texas Automobile Rules and Rating Manual (the Manual), Rule 74.I., to set the amount of the optional Academic Achievement Discount. Staff's petition (Ref. Number A-1096-39-I) was filed on October 8, 1996. Staff proposes that a credit of 10% be adopted as the optional discount to be available under Manual Rule 74.I, Academic Achievement Discount. The Insurance Code, Article 5.03-3 provides an insurer may grant a discount for certain automobile insurance premiums for academic achievement if necessary qualifications are met. Article 5.03-3 provides the "commissioner by rule shall set the amount of the discounts applicable under this article..." Commissioner's Order Number 95-1107, issued October 25, 1995, amended Rule 74 by adding section I regarding the Academic Achievement Discount, but anticipated the amount of the discount would be determined in "Private Passenger and Commercial Auto Benchmark Rates," Docket Number 454-95-1218.G. Although the Commissioner requested evidence on this issue in the notice (20 TexReg 7784) for that Benchmark Rate Hearing, no such evidence was presented. TDI's Technical Analysis Division received data from Insurance Services Office, Inc. (ISO), regarding the Academic Achievement Discount. The data contains charts that depict exposures, pure premiums, and relativities to younger drivers who were not eligible for the discount. These tables list the experience of both married and unmarried males (ages 17-24) and females (ages 21-24), respectively. This data was reviewed and analyzed by Technical Analysis. The ISO data assisted Technical Analysis in determining that a credit of 10% would be the appropriate Academic Achievement Discount. A copy of the petition containing the full text of the proposed amendments to the Manual is 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, please contact Angie Arizpe at (512) 463-6326; refer to (Ref. Number A-1096-39-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, Texas Department of Insurance, P. O. Box 149104, MC 113-2A, Austin, Texas 78714-9104. An additional copy of comments is to be submitted to David Durden, Deputy Commissioner, Property and Casualty Insurance Lines, Texas Department of Insurance, P. O. Box 149104, MC 104-5A, 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). This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's authority to adopt. Issued in Austin, Texas, on October 11, 1996. TRD-9614853 Robert Carter Assistant General Counsel Texas Department of Insurance Filed: October 11, 1996 Exempt Filing Notification Pursuant to the Insurance Code Chapter 5, Subchapter L, Article 5.96 ADOPTED Adoption of Amendments to the Texas Automobile Rules and Rating Manual, Rule 74, Driving Safety Course Credits The Commissioner of Insurance, at a public hearing under Docket Number 2250 held at 9:00 a.m., October 1, 1996, in Room 100 of the Texas Department of Insurance Building, 333 Guadalupe Street in Austin, Texas, adopted amendments proposed by staff to the Texas Automobile Rules and Rating Manual (the Manual). The amendments revise Manual Rule 74.E.2., driving safety course credits. Staff's petition (Ref. Number A-0896-34-I) was published in the August 27, 1996, issue of the Texas Register (21 TexReg 8183). This order eliminates specified courses from Manual Rule 74.E.2 and allows the insurance credit for completion of any driving safety course approved under and taught through a school licensed under Texas Civil Statutes, Article 4413(29c), regardless of whether a uniform certificate of completion (defined in the statute) is issued to the graduates. Article 4413(29c) provides for approval of driving safety courses, schools, and course providers by the Texas Education Agency, which includes the State Board of Education and the Commissioner of Education. This order mandates that Rule 74 include one exemption from the above requirements. The exemption is based upon Texas Civil Statutes, Article 4413(29c), sec.7(a), which totally exempts an organization having 50,000 or more members, which qualifies for a tax exemption under specified Internal Revenue Code provisions, and which conducts for its members and other individuals, who are at least 50 years of age, a driving course that is not used for purposes of former Texas Civil Statutes, Article 6701d, Section sec.143A, Uniform Act Regulating Traffic on Highways, now the Transportation Code, Title 7, sec.sec.543.101 et seq. (pertaining to dismissal of charges concerning traffic law violations). The fact that such a course has been granted a statutory exemption indicates confidence of the legislature in the course's quality, and that is a persuasive reason to allow the insurance credit for taking such a course. This order also mandates deletion of the "Exception" appearing at the end of Rule 74.E.2, pertaining to Certified Driver Education Teachers. Such teachers are to be treated the same as other persons for purposes of the insurance credit. In other words, a teacher needs to take a driving safety course in order to receive the insurance credit, rather than automatically being entitled to the insurance credit through receipt of a license to teach a driver education course. Background information and justification for all action taken herein is set forth in the staff petition and in the previously referenced publication in the Texas Register. The amendments as adopted by the Commissioner of Insurance are shown in exhibits on file with the Chief Clerk under Ref. Number A-0896-34-I, which are incorporated by reference into Commissioner's Order Number 96-1189. The Commissioner of Insurance has jurisdiction over this matter pursuant to the Insurance Code, Articles 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. Issued in Austin, Texas, on October 11, 1996. TRD-9614854 Robert Carter Assistant General Counsel Texas Department of Insurance Filed: October 11, 1996