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RULE §5.5005Rates for Commercial Multi-peril Policies

(a) The purpose of this section is to provide a rate regulatory procedure for commercial multi-peril policies.

(b) The following words and terms, when used in this section, shall have the following meaning unless the context indicates otherwise. Rate--The cost of insurance per exposure unit, whether expressed as a single number or as a prospective loss cost, with an adjustment to account for the treatment of expenses, profit, and individual insurer variation in loss experience, including any application of individual risk variations based on loss or expense considerations.

(c) Rates for commercial multi-peril policies shall be subject to the rate regulatory provisions of Article 5.13-2 of the Texas Insurance Code, except as provided in subsection (d) of this section.

(d) For a commercial multi-peril policy as described in this subsection, Lloyd's plans, reciprocals, and interinsurance exchanges shall file with the department a schedule of the amounts to be charged policyholders or applicants and the amounts of any rate changes for all lines of insurance that are included in the commercial multi-peril policy, including commercial property and inland marine lines of insurance. The schedule shall include any amount charged, including "rates", "policy fees", "service fees", and "other fees" that are charged or collected under Article 21.35B of the Texas Insurance Code. Commercial multi-peril policies that contain lines of insurance other than those specified in paragraphs (1) - (6) of this subsection shall be subject to the requirements of subsection (c) of this section. For the purpose of receiving a reduction in filing requirements under this subsection, a commercial multi-peril policy filed by a Lloyd's plan, reciprocal, or interinsurance exchange may contain some combination of only the following lines of insurance:

  (1) general liability;

  (2) commercial property;

  (3) commercial casualty, including boiler and machinery, commercial crime, commercial glass, and professional liability; but excluding commercial automobile, fidelity, surety and guaranty bonds, financial guaranty, and workers compensation;

  (4) medical professional liability;

  (5) inland marine; and

  (6) garage insurance, including all coverages and endorsements included in the Texas Garage Policy, except for those coverages specifically rated on the basis of risk characteristics of the automobile or the person driving.

(e) Nothing in this section shall be construed to preclude the exemptions for Lloyd's plans, reciprocals, and interinsurance exchanges in Insurance Code Article 5.13-2 §3(a)(3) from rate filing for commercial property and inland marine lines of insurance, provided these lines are not included or contained in a commercial multi-peril policy.

Source Note: The provisions of this §5.5005 adopted to be effective November 30, 2004, 29 TexReg 11035

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