                       'TmA-rro~~~y             GENERAL
                                    OF-




Mr. A. A. Fiegan,
                Jr.
casualtyInsurance Division
Board of InsuranceCommLssioners
Austin,Texas

Dear Sir:
                       .
                   i                      opinion.iio.O-406
                                          Re: Is the Board of InsuranceCom-
                                              missionerslimitedto prescrib-
                                              ing a Uniformrate for basic
                               .~
                                              coverageonly under provisions
                                              of Article,wb or does it
                           ,
                                              apply to all ate&-and rules?
     ..                                       Does the Board have authority 'O'
                                              to prescribemars than one ex-
                                              cess'limitstable for e&h c&as-
                                              sificatlonof hazard? ,Dws the
                                              Board have authorityto prescribe
                                              ,a.se&ate excesslimitstable         .
                                              for self-insurereP

         Your requestfor an opinionon the above stated questionhas been
receivedby this office.

            Sections1, 2 and 8 of Article468213
                                              R. C.'S. read a8 follows:

         "Every Fnsurance'company,corporation,.hterinsUrance ex-
    change,mutual,reciprocal,association,Lloyd'sor other in-
    surer,hereinaftercalled insurer,writingany form of motor
    vehicleins-de.in this State, shall qually file with the
    Board of InsuianceCo+siioners, hereinafter,called  Commis-
    sioner,on forms prescribedby the Conuriissioner,
                                                   a report
    showingIts premiumsand losses on each classification of
    motor vehicleriskswritten in this State. The Commissioner
    shall have the sole and exclusivepower and authority,and it
    shallbe its duty to determine,fix, prescribe,and promul-
    gate just, reasonableand adequaterates of premiums,tobe
    chargedand collecte@by all insurerswritingany form of in-
    suranceon motor veh&clesin this State, includingfleet or
    other ratFngplan, desi@ed to discouragelosaea from fire and
    theft and similarhazardsand to take account.ofthe peculiar
    hazardsof individualrisks, and an experienceratingplan de-
    signedto encouragethe preventionof accidents;and to take
Mr. A. A. Regan, Jr., Page 2 (0-406)



    accountof the peculiarhazardsof individualrisks,provided
    that only one such plan shallbe fixed or promulgatedfor each
    form of insurancehereunder. Said Commissionershall have the
    authorityalso to alter or amend any and all of such rate6 of
    premiumsso fixed and dete?mlnedand adoptedby it, and to raise
    or lower the same or any part thereof. Said ConmIssionershall
    have authorityto employ clericalhelp, inspectors,experts,and
    other assistants,and to incur such other expensesas may be
    necessaryin carryingout the provisionsof this,law;provided,
    however,that the number of employeesand salaryof each shall
    be fixed in the GeneralAppropriation Bill passed by the Legis-
    lature. Said Conmissionershall ascertainas soon a6 pradi-
    cable the annual insuranceloeses incurrsdunder all policieson
    m&or vehiclesin this State,make and aalntalna recordt~h'ersof,
    end collectsuch data as will enable said ConmissIonerto clas-
    slfythe variousmotor vehiclesof the State accordingto the
    risk and usage made thereof,and to classifyand assign the los-
    ees.according to the variousclassesof risks to which they are
    applicable;the Board shall a&ao ascertadnths amount of pre-
    ialma QIIall such policiesfor each class of rlaks,and main-
    taluapenuanent recordthereofIn suchmanner as~tillaid Fu
    $e$erminingjust, reasonableand a&equaterates of premiuus.

       ', 'Motorvehicleor automobileInsuranceas referrad~toIn
     6;$ia~~~shallb-etakan awl construedto~~sn every Ior4 of in-
     ki@ancoonanyautomobile or other vehiclehw$?@terenumer-
     ated a~@ its operatingequipmentor nscessitatsdby.reasonof
     sht:l$abilityimposedby law for da~nagesarisd$gout of the
     own&ship, pperation,maintenance,or use in this State of sny
     auta&blle,'motorcycle, motor-bicycle,truck,truck-tractor,
     tractor;tractionengine,or any other self-propelled  veh+le,
     and inclu~    also every vehicle,trailer or semi~trailerpul&?d
     ar towed by a n&or vehicle,but excludingevery motor.vehlcle
     Fuming only upon fired rails or tracks. ljox@en9SCornpenes-
     tlon IMurance is excludedfrom the foregoingdefinitionand
     frsmtheterms of this Act.

          "Section2. On and after the filingand effectivedate of
     such classificationof such risks and rates,no such insurer
     shall issue or renew any such insuranceat premluurates which
    are greateror less than, or differentfrom, those approvedby
    the C&mlssioner as just, reasonableand adequatefor the risks
    'tow&h they respectivelyapply, and not confiscatoryas to any
     class of insurancecarriersauthorizedby Law to write~suchiu-
     surance.

         "Section8. No *surer comingwith the terms of this Act
     shall,in its businessIn this State,'makeor perult any dis-
     tinctionqr discriminationin favor of the insuredhaving a like
     hazard,inthe v+atterof the chargeof pr&ium.efor ixwrance,
hfr.A. A. Regan, Jr., Page 3 (o-406)



     or in dividendsor other benefitspayableunder any policy,nor
     shall any such insureror agent make any contractof insurance,
     or agreementas to such insurance,other than expressedin the
     policy,nor shall any such insureror its agents or representa-
     tives pay, allow or give, or offer to pay, allow or give, di-
     rectly or indirectly,as sn inducementto Insured,any rebate
     payableupon the policyor any specialfavor or advantagein
     dividendsor other benefitsto accrue,or anythingof value
     whatsoever,not specifiedin the policy;providedthat nothing
     in this Act shallbe construedto prohibitthe modificationof
     rate6 by an experienceratingplan designedto encouragethe
     preventionof accidentsand to take accountof the peculiar
     hazardsof individualrisks,providedsuch plan shall have been
     approvedby ths Commls6hne.r;  andprovided furtherthat only
.*   one such plad shallbe approvedfor each form of insurance
     hereunder."

          Pursuantto the above mentionedstatute,the Board of InsuranceCom-
missionershas prescribeda manual of r&es and rates for all forms of auto-
mobile insurancein Texas and the manual.
                                       of rules and rates Is duly recorded
In the officialminutesof the Board. The prescribedmanual containsa table
of percentagesto be appliedto the basic manual rate where an Insuredwishes
to avail himselfof additionalprotedlon In the form of higher limlts~thau
the basic 5,000/10,000limits for bodilyinjury liability.

         Rule Bo. 66   of   the manual reads as follows:

          ~“66. IncreasedLimitsand Excess Insurance. Increased
     limits and excess insurancemay be written for sny type.00auto-
     mobile In accordancewith the chargesshown in the Increased
     LimitsTable applicableto the type of automobileInvolvedand
     its use."

          The terms and provisionsof the statuteare clear and unambiguouS
and specifically providethat only one such plan shall be fixed or promulgated
for each form of insurancehereunderand furtherprovidethat the Conmissioner
shall have the sole and exclusivepower and authorityand It shallbe its duty
to determine,fix, prescribeand promulgatejust and reasonableand adequate
rates of premiumsto be chargedand collectedby all insurerswritingany form
of Insuranceon motor vehiclesin this State and the duty imposedupon the
Board of InsuranceCommissioners by Section1 of Article 4682b, supra, Is not
limitedto prescribinga uniformrate for basic coverageonly but appliesto
all rates and rules includingthe excess limitstable for excess coverageabove
the basic manual rate.

          You are respectfullyadvisedthat it is the opinionof this-Depart-
ment that the Board of InsuranceCommissionershas no authorityto prescribe
more than one excesslimitstable for each cl.assificationof hazardand does
not have the authorityto prescribea separateexcess limitstable for self-
Insurerswho wish to assume their own liabilityup to a certainlimit but desire
Mr. A. A. Regen, Jr., Page 4 (0-406)



to provideexcess insuranceby purchasingit from a companyadmittedto do
businessin Texas to protectthemselvesagainstcatastrophelosses.

         You are furtheradvisedthat the duty Imposedupon the Board of In-
suranceConmkissionersby Section1 of the above mentionedstatuteis not limited
to prescribinga uniformrate for basic coverageonly but appliesto all rates
and rules includingan excess limitstable for excess coverageabove the basic
manual rate.

          TrustingtI&. the foregoing-ers   your inquiries,we remain

                                                    Very truly yours

                                              A!tTm    $ElGmLoFTBxAs

                                              BY
                                                    Ardell qilllame
                                               .:        &3%.atEul$
