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 ADOPTION The Commissioner of Insurance, at a public hearing under Docket Number 2296 held at 9:00 a.m., August 28, 1997 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), and the Texas Standard Provisions for Automobile Policies (the Standard Provisions). The amendments revise Manual Rule 41 to change the premium charge for attachment of appropriate Financial Responsibility Certification endorsements, and to reword those endorsements (571 and TE 99 82A) in the Standard Provisions. Staff's petition (Reference Number A-0697-18-I) was published in the June 20, 1997, issue of the Texas Register (22 TexReg 5929- 5930) for the initial hearing that was conducted on July 24, 1997. Notice of reconvening this hearing was published in the August 8, 1997, issue of the Texas Register (22 TexReg 7414). Manual Rule 41 is amended by changing the premium charge for attachment of appropriate Financial Responsibility Certification endorsements to a flat $20 premium charge for the insured for whom the certificate is filed. Endorsements 571 and TE 99 82A, to be redesignated as 571A and TE 99 82B, respectively, are also reworded. The $20 amount would replace the current premium charge, which consists of 10% of the basic limits bodily injury and property damage liability premium that would be paid by the insured for whom the certificate is filed. Under the Texas Motor Vehicle Safety Responsibility Act, the Department of Public Safety (DPS) under some circumstances must require a vehicle operator to provide "evidence of financial responsibility." This may be done by filing with DPS the certificate of an insurance company certifying that an auto liability insurance policy is in effect for the benefit of that operator. Such a certificate is called an SR-22, which is referenced in Manual Endorsements 571 and TE 99 82A. Each endorsement provides for an additional premium charge and sets forth the insurer's obligation to give prior written notice to DPS before cancellation or termination of the policy. Based upon information presented by Staff, including analysis by the Technical Analysis Division, it is found that $20 is adequate to cover an insurer's cost regarding certification. Rule 41 is amended accordingly, and Endorsements 571 and TE 99 82A also are amended to reflect this change. The amendment of those endorsements consists partially of eliminating references to Bodily Injury Liability and Property Damage Liability, as the premiums for those coverages are not relevant. In order to avoid the possible need for amending these endorsements in the future because of inflation, a blank space is being left in each endorsement for the charge to be made. The amendments as adopted by the Commissioner of Insurance are shown in exhibits on file with the Chief Clerk under Reference Number A-0697-18-I, which is incorporated by reference into Commissioner's Order Number 97-0904. The Commissioner of Insurance has jurisdiction over this matter pursuant to the Insurance Code, Articles 5.06, 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. IT IS THEREFORE THE ORDER of the Commissioner of Insurance that the Manual and the Standard Provisions are amended as described herein, and the amendments are adopted to become effective on November 11, 1997. Issued in Austin, Texas, on August 11, 1997. TRD-9712131 Caroline Scott General Counsel and Chief Clerk Texas Department of Insurance Effective date: November 11, 1997 Proposal publication date: June 20, 1997 The Commissioner of Insurance, at a public hearing under Docket Number 2295 held at 9:00 a.m., August 28, 1997 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). The amendments revise Manual Rule 14 to amend the plan for installments for premium payments for the Personal Auto Policy. This order also amends the Texas Standard Provisions for Automobile Insurance Policies (the Standard Provisions), Personal Auto Policy, Special Instructions in regard to installment payments. Staff's petition (Reference Number A-0597-15-I) was published in the June 3, 1997 issue of the Texas Register (22 TexReg 4881-4882) for the initial hearing that was conducted on July 8, 1997. Notice of reconvening this hearing was published in the August 8, 1997 issue of the Texas Register (22 TexReg 7414). The Manual's Rule 14 is amended to reduce the percentage of the down payment that is to be required by an insurer writing a Personal Auto Policy that is to be purchased under this rule's installment payment plan. Rule 14 currently allows an insurer to require a down payment of no more than 25% of the total premium for 12-month policies and 40% for 6-month policies. Amended Rule 14 (which sets forth minimum requirements) provides for a down payment no greater than 16.67% of the total premium for a 12-month policy, or no greater than 33.33% of the total premium for a 6-month policy, whenever this rule's installment payment plan is used. Amended Rule 14 also requires the remaining premium balance to be payable in ten equal monthly installments for a 12-month policy and four equal monthly installments for a 6-month policy. In addition to the ten equal monthly payments and four equal monthly payments required for 12-month and 6-month policies respectively, amended Rule 14 requires the insurer to bill for one-half of the initial payment that will be required for policy renewal to be due in the last month of the policy period. Amended Rule 14 provides that the remaining one-half of the initial payment shall be due at the date of renewal. The Standard Provisions, Personal Auto Policy, Special Instructions, are amended by changing current #11 to #12, and by adding a new #11, titled "Installment Payment Plan" and providing as follows: "Each insurance company must either print on, stamp on, or attach to the declarations page the following statement: 'We agree to make available to you an installment payment plan as described in Rule 14 of the Texas Automobile Rules and Rating Manual, except when an installment payment plan is prohibited by other rule or by statute.' " This instruction provides guidance to insurers on how to comply with the Board Order that created Rule 14, (Board Order Number 59537 issued April 13, 1992) and which requires a statement regarding the installment plan to be incorporated into the policy. The amendments to Rule 14 will make the required minimum installment payment plan more affordable and provide more uniformity. Amended Rule 14 still allows an insurer to offer other payment options to a new applicant in addition to the Rule 14 plan, but the proposed plan (as a minimum standard) must be made available to each new applicant unless one of the rule's exceptions exists. The amendments as adopted by the Commissioner of Insurance are shown in exhibits on file with the Chief Clerk under Reference Number A-0597-15-I, which is incorporated by reference into Commissioner's Order Number 97-0903. The Commissioner of Insurance has jurisdiction over this matter pursuant to the Insurance Code, Articles 5.06, 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. IT IS THEREFORE THE ORDER of the Commissioner of Insurance that the Manual and the Standard Provisions are amended as described herein, and the amendments are adopted to become effective on January 1, 1998. Issued in Austin, Texas, on August 11, 1997. TRD-9712132 Caroline Scott General Counsel and Chief Clerk Texas Department of Insurance Effective date: January 1, 1998 Proposal publication date: June 3, 1997