AUSTIN, Texas, May 20, 2004 — The Texas Department of Insurance (TDI) has cleared the way for insurers to make filings immediately using Insurance Services Office, Inc.'s (ISO) commercial auto advisory information.
ISO's advisory service for the commercial auto insurance program in Texas now includes advisory prospective loss costs and manual rules for applying those loss costs. Loss costs are insurers' anticipated losses, based on aggregated data, from underwriting a particular class of risks. Rules are sets of conditions under which insurers underwrite a specific risk or a class of risks.
The TDI has approved for insurers' use ISO's commercial auto loss costs and rules for:
The TDI has also approved the following ISO rating plans for insurers' use as additional tools to reflect the unique characteristics of individual risks:
In addition, the TDI has approved ISO's standardized multistate commercial auto policy forms. ISO has maintained a commercial auto forms-only program in Texas that differed from the countrywide multistate program to comply with TDI's "equivalency requirement." The Texas insurance code only permitted insurers to use commercial auto policy forms and endorsements that provided coverage at least equivalent to the state-mandated forms.
"TDI's approval of ISO's commercial auto loss costs, rules and policy forms will benefit both carriers and insurance buyers. It will open up the state to greater competition among existing insurers, encourage new players to enter the market and allow commercial auto insurance buyers to comparison shop for the best coverage at competitive prices," said Kevin B. Thompson, ISO senior vice president of Insurance Services.
"Instead of maintaining a separate Texas-specific company program, carriers can use ISO's loss costs information, policy forms and rating systems for more informed underwriting and pricing decisions," he added.
Texas is the third-largest commercial auto market in the U.S., with annual premium volume of nearly $2 billion. Commercial auto includes rental fleets, public vehicles (taxi, bus and limo), trucks, tractors and trailers, private passenger types, special type vehicles (such as fire trucks) and auto dealers.
ISO is a leading provider of products and services that help measure, manage and reduce risk. ISO provides data, analytics and decision-support solutions to professionals in many fields, including insurance, finance, real estate, health services, government and human resources. Professionals use ISO's databases and services to classify and evaluate a variety of risks and detect potential fraud. In the U.S. and around the world, ISO's services help customers protect people, property and financial assets.