Case Information
*1 'TmA-rro~~~y GENERAL OF-
Mr. A. A. Fiegan, Jr.
casualty Insuran ce Division
Board of Insurance CommLssioners
Austin, Texas
Dear Sir: . opinion .iio. O-406
i Re: Is the Board of Insurance Com- missioners limited to prescrib- ing a Uniform rate for basic coverage only under provisions .~ of Article,wb or does it , apply to all ate&-and rules? Does the Board have authority 'O'
. . to prescribe mars than one ex-
cess'limits table for e&h c&as- sificatlon of hazard? ,Dws the Board have authority to prescribe . ,a.se&ate excess limits table for self-insurereP
Your request for an opinion on the above stated question has been received by this office.
Sections 1, 2 and 8 of Article 468213 R. C.'S. read a8 follows: "Every Fnsurance 'company, corporation, .hterinsUrance ex-
change, mutual, reciprocal, association, Lloyd's or other in-
surer, hereinafter called insurer, writing any form of motor
vehicle ins-de.in this State, shall qually file with the
Board of Insuiance Co+siioners, hereinafter,called Commis-
sioner, on forms prescribed by the Conuriissioner, a report
showing Its premiums and losses on each classification of
motor vehicle risks written in this State. The Commissioner
shall have the sole and exclusive power and authority, and it
shall be its duty to determine, fix, prescribe, and promul-
gate just, reasonable and adequate rates of premiums,to be
charged and collecte@ by all insurers writing any form of in-
surance on motor veh&cles in this State, including fleet or
other ratFng plan, desi@ed to discourage losaea from fire and
theft and similar hazards and to take account .of the peculiar
hazards of individual risks, and an experience rating plan de-
signed to encourage the prevention of accidents; and to take
Mr. A. A. Regan, Jr., Page 2 (0-406)
account of the peculiar hazards of individual risks, provided that only one such plan shall be fixed or promulgated for each form of insurance hereunder. Said Commissioner shall have the authority also to alter or amend any and all of such rate6 of premiums so fixed and dete?mlned and adopted by it, and to raise or lower the same or any part thereof. Said ConmIssioner shall have authority to employ clerical help, inspectors, experts, and other assistants, and to incur such other expenses as may be necessary in carrying out the provisions of this,law; provided, however, that the number of employees and salary of each shall be fixed in the General Appropriation Bill passed by the Legis- lature . Said Conmissioner shall ascertain as soon a6 pradi- cable the annual insurance loeses incurrsd under all policies on m&or vehicles in this State, make and aalntaln a recordt~h'ersof, end collect such data as will enable said ConmissIoner to clas- slfythe various motor vehicles of the State according to the risk and usage made thereof, and to classify and assign the los- ees.according to the various classes of risks to which they are applicable; the Board shall a&ao ascertadn ths amount of pre- ialma QII all such policies for each class of rlaks, and main- taluapenuanen t record thereof In suchmanner as~tillaid Fu $e$ermining just, reasonable and a&equate rates of premiuus.
', 'Motor vehicle or automobile Insurance as referrad~to In 6;$ia~~~shall b-e takan awl construedto~~sn every Ior4 of in- ki@anco onanyautomobile or other vehicle hw$?@terenumer- ated a~@ its operating equipment or nscessitatsd by.reason of sht: l$ability imposedby law for da~nages arisd$g out of the own&ship, pperation, maintenance, or use in this State of sny auta&blle,'motorcycle, motor-bicycle, truck, truck-tractor, tractor; traction engine, or any other self-propelled veh+le, and inclu~ also every vehicle, trailer or semi~trailer pul&?d ar towed by a n&or vehicle, but excluding every motor.vehlcle Fuming only upon fired rails or tracks. ljox@en9S Cornpenes- tlon IMurance is excluded from the foregoing definition and frsmtheterms of this Act.
"Section 2. On and after the filing and effective date of such classification of such risks and rates, no such insurer shall issue or renew any such insurance at premluu rates which are greater or less than, or different from, those approved by the C&mlssioner as just, reasonable and adequate for the risks 'to w&h they respectively apply, and not confiscatory as to any class of insurance carriers authorized by Law to write~such iu- surance.
"Section 8. No *surer coming with the terms of this Act shall, in its business In this State,'make or perult any dis- tinction qr discrimination in favor of the insured having a like hazard, inthe v+atter of the charge of pr&ium.e for ixwrance, *3 hfr. A. A. Regan, Jr., Page 3 (o-406)
or in dividends or other benefits payable under any policy, nor shall any such insurer or agent make any contract of insurance, or agreement as to such insurance, other than expressed in the policy, nor shall any such insurer or its agents or representa- tives pay, allow or give, or offer to pay, allow or give, di- rectly or indirectly, as sn inducement to Insured, any rebate payable upon the policy or any special favor or advantage in
dividends or other benefits to accrue, or anything of value whatsoever, not specified in the policy; provided that nothing in this Act shall be construed to prohibit the modification of rate6 by an experience rating plan designed to encourage the
prevention of accidents and to take account of the peculiar
hazards of individual risks, provided such plan shall have been approved by ths Commls6hne.r; andprovided further that only .* one such plad shall be approved for each form of insurance
hereunder."
Pursuant to the above mentioned statute, the Board of Insurance Com- missioners has prescribed a manual of r&es and rates for all forms of auto- mobile insurance in Texas and the manual. of rules and rates Is duly recorded In the official minutes of the Board. The prescribed manual contains a table of percentages to be applied to the basic manual rate where an Insured wishes to avail himself of additional protedlon In the form of higher limlts~thau the basic 5,000/10,000 limits for bodilyinjury liability.
Rule Bo. 66 of the manual reads as follows: ~“66. Increased Limits and Excess Insurance. Increased limits and excess insurance may be written for sny type.00 auto- mobile In accordance with the charges shown in the Increased Limits Table applicable to the type of automobile Involved and its use."
The terms and provisions of the statute are clear and unambiguouS and specifically provide that only one such plan shall be fixed or promulgated for each form of insurance hereunder and further provide that the Conmissioner shall have the sole and exclusive power and authority and It shall be its duty to determine, fix, prescribe and promulgate just and reasonable and adequate rates of premiums to be charged and collected by all insurers writing any form of Insurance on motor vehicles in this State and the duty imposed upon the Board of Insurance Commissioners by Section 1 of Article 4682b, supra, Is not limited to prescribing a uniform rate for basic coverage only but applies to all rates and rules including the excess limits table for excess coverage above the basic manual rate.
You are respectfully advised that it is the opinion of this-Depart- ment that the Board of Insurance Commissioners has no authority to prescribe more than one excess limits table for each cl.assification of hazard and does not have the authority to prescribe a separate excess limits table for self- Insurers who wish to assume their own liability up to a certain limit but desire
Mr. A. A. Regen, Jr., Page 4 (0-406)
to provide excess insurance by purchasing it from a company admitted to do business in Texas to protect themselves against catastrophe losses.
You are further advised that the duty Imposed upon the Board of In- surance Conmkissioners by Section 1 of the above mentioned statute is not limited to prescribing a uniform rate for basic coverage only but applies to all rates and rules including an excess limits table for excess coverage above the basic manual rate.
Trusting tI&. the foregoing -ers your inquiries, we remain Very truly yours A!tTm $ElGmLoFTBxAs BY Ardell qilllame &3%.atEul$ . :