Bulletin: TX2008004

Dear Associates:

No rate change in 2008
Commissioner of Insurance ("Commissioner") has adopted the current rate schedule for the remainder of 2008 and for the next calendar year and subsequent years until changed by subsequent order of the Commissioner, after notice and hearing as provided by Subchapter D of Chapter 2703 of the Texas Insurance Code.  The Insurance Department is expected to gather information during the summer and call for a rate hearing later in the year.  No rate change is likely during 2008.

Forms not used without a rate
Rate Rule R-2 has been amended to read, in part: A company shall not issue or deliver a policy, binder or endorsement for which a premium is prescribed without collecting the full charge therefore until a rate therefore has been adopted by the Commissioner.  This means that companies cannot be forced to issue forms when the form has been approved but a rate has not.

Reorganization of the Basic Manual
After many years of confusion and difficulty in finding procedures buried in rate rules and vice versa, a number of rules have been modified to put them in the correct section and to clarify the language. 

1.  Rate Rule R-3 has been amended (a) to move the provision for the Increased Value Endorsement to amended Rate Rule R-15 and (b) to delete portions of Rate Rule R-3 that have been included in a new, Procedural Rule P-66.  The remaining portion of R-3 deals only with situations where improvements are subsequently added (which portion remains unchanged).

a. For Owner's Policies, the new rule Procedural Rule P-66, combines all rules dealing with:

i. Fee simple
ii. Leasehold
iii. Easement
iv. Acquisitions by the USA
v. Increased value

b. For Loan policies, the new rule combines the rules dealing with:

i. Variable interest including negative amortization
ii. R-6 issuance subsequent to Owner's Policy
iii. Reverse Mortgages

2.  R-7 has been amended to clarify that the additional subordinate policies each bear a $5.00 premium.

3.  R-15 has been amended to include the reference to the endorsements allowed to Owner's Policies by name rather than by reference to the procedural rule.  These endorsements are:  Increased Value, Increases in Policy Amount during construction and the T-31 MHU series.

4.  R-18 has been amended to change the name to Refinance of Construction Loans, and reorganize for clarity.  There are no substantive changes in the rule.

5.  The statistical plan has been amended to provide for 2 new codes:  0895 when a T-19.1 has been issued along with a single issue Owner's Policy and amendment of the area and boundary has also been made.  Code 0889 is used when a T-19.1 has been issued along with a single issue Owner's Policy and no amendment of the area and boundary has also been made.

If you have any questions concerning this topic please contact:

John Rothermel
Stewart Title Guaranty Company
1777 N.E. Loop 410, Suite 806
San Antonio, TX 78217
TOLL FREE: (800) 292-5712
E-mail: John.Rothermel@stewart.com