Can Texas reveal which insurers write commercial coastal property policies?

TX AG Opinion GA-0495: Can the state name the insurers writing coastal commercial property policies?

Plain-English summary

The Texas Commissioner of Insurance asked whether section 38.003(d) of the Insurance Code prevented the Texas Department of Insurance from releasing the identities of companies writing commercial property insurance along the Texas coast. The question arose after the Department, in May 2006, sent a written inquiry to twenty-five groups of "Tier 1" and "Tier 2" commercial property insurers (Tier 1 counties touch the coast; Tier 2 counties are next to Tier 1 counties). The Department asked the insurers about whether they were writing new policies and renewals, what deductibles they offered, whether they provided wind coverage in Tier 1, and whether they imposed special restrictions, especially any changes in underwriting guidelines since September 1, 2005. Some insurers labeled their responses proprietary and confidential. The Commissioner stressed that the Department did not want to release specific underwriting criteria or formulas, only the identities of the companies that were writing policies.

Chapter 38 of the Insurance Code governs the Department's data collection and reports. Section 38.003 makes insurers' "underwriting guidelines" confidential and not available to the public. That term is not defined in section 38.003, but it is defined in the closely related section 38.002 (added in the same 2003 bill) as a rule, standard, guideline, or practice an insurer uses to decide whether to accept or reject an application or to classify accepted risks for setting a rate. The opinion concluded it could confidently carry that definition over into section 38.003, swapping "commercial property insurance policy" for the personal-auto and residential-property terms the section 38.002 definition uses.

The key question was whether a simple list of which companies write coastal policies counts as an "underwriting guideline." The opinion concluded it does not. The fact that a company writes policies in a particular area is not a rule, standard, guideline, or practice for accepting, rejecting, or classifying risks; it is just a statement of fact. Had the Legislature wanted to sweep a bare statement of fact into the definition, it could have done so. So releasing the identities of the companies writing commercial property insurance along the coast is not an act prohibited by section 38.003(d), and the Department is not barred from disclosing that list.

Currency note

This opinion was issued in 2006. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

The Insurance Code provisions cited here, including chapter 38 and the coastal-insurance article, may have been amended or recodified since 2006. Anyone asking today what insurer information the Texas Department of Insurance may release should check the current statutes and any later authority rather than relying on this 2006 opinion.

Who this opinion affected (as of 2006)

The Texas Department of Insurance: The opinion told the Department that section 38.003(d) did not bar it from releasing the identities of companies writing commercial property insurance along the coast, since that list was a statement of fact, not an underwriting guideline.

Commercial property insurers writing on the coast: The opinion meant the confidentiality protection in section 38.003(d) covered their underwriting guidelines (their risk-acceptance rules and formulas), but not the bare fact of whether they wrote policies in a coastal area.

The public, businesses seeking coverage, and journalists: The opinion bore on access to the question of which insurers were still writing coastal commercial property coverage, a matter of significant public interest after the 2005 hurricane season, by confirming that the Department could disclose the list.

Common questions

Can the Texas Department of Insurance release the names of insurers writing coastal commercial property policies?
Yes. The opinion concluded section 38.003(d) does not prohibit the Department from disclosing the identities of companies writing commercial property insurance along the Texas coast.

Isn't insurer information confidential under section 38.003(d)?
Section 38.003(d) makes insurers' "underwriting guidelines" confidential. The opinion concluded that a list of which companies write policies in an area is not an underwriting guideline, so it is not within that confidentiality protection.

What counts as a confidential "underwriting guideline"?
Borrowing the definition from section 38.002, the opinion described it as a rule, standard, guideline, or practice an insurer uses to decide whether to accept or reject an application or to classify accepted risks for setting a rate. Specific underwriting criteria and formulas fall in that protected category.

Why is just the company's name not protected?
The opinion explained that the fact a company writes policies in a particular area is simply a statement of fact, not a rule or practice for accepting or classifying risks, so it is not the kind of information section 38.003(d) keeps confidential.

Background and statutory framework

Chapter 38 of the Insurance Code governs the Department's data collection and reports. Section 38.001 lets the Department address reasonable inquiries to insurers and provides that a response otherwise privileged or confidential by law stays confidential until introduced into evidence. Section 38.002 governs underwriting guidelines for personal automobile and residential property insurance and defines "underwriting guideline," while section 38.003 governs underwriting guidelines for other lines, including commercial property, and makes them confidential (Tex. Ins. Code Ann. §§ 38.001(b), (d), 38.002(a)(4), 38.003(d) (Vernon Supp. 2006); Tex. Ins. Code Ann. art. 21.49 (Vernon Supp. 2006) (Tier 1 and Tier 2 counties)).

Because section 38.003 does not define "underwriting guideline" but the related section 38.002 (added by the same 2003 bill) does, the opinion imported that definition, substituting commercial property insurance for the personal-auto and residential terms. Applying it, the opinion concluded a list of companies that write coastal policies is a statement of fact, not a rule or practice for accepting or classifying risks, so it is not an underwriting guideline and its release is not prohibited (Act of June 2, 2003, 78th Leg., R.S., ch. 206, § 8.01, 2003 Tex. Gen. Laws 907, 932-33; L & M-Surco Mfg., Inc. v. Winn Title Co., 580 S.W.2d 920, 926 (Tex. Civ. App.-Tyler 1979, writ dism'd); Guthery v. Taylor, 112 S.W.3d 715, 721 (Tex. App.-Houston [14th Dist.] 2003, no pet.)).

Citations

Statutes and session law:

• Tex. Ins. Code Ann. §§ 38.001(b), (d), 38.002(a)(4), 38.003(d) (Vernon Supp. 2006); art. 21.49 (Vernon Supp. 2006)
• Act of June 2, 2003, 78th Leg., R.S., ch. 206, § 8.01, 2003 Tex. Gen. Laws 907, 932-33

Cases:

• L & M-Surco Mfg., Inc. v. Winn Title Co., 580 S.W.2d 920, 926 (Tex. Civ. App.-Tyler 1979, writ dism'd)
• Guthery v. Taylor, 112 S.W.3d 715, 721 (Tex. App.-Houston [14th Dist.] 2003, no pet.)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/greg-abbott/ga-0495
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2006/ga0495.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain - the linked PDF is authoritative.

ATTORNEY GENERAL OF TEXAS

GREG ABBOTT

December 22, 2006

Mr. Mike Geeslin
Commissioner of Insurance
Texas Department of Insurance
Post Office Box 149104
Austin, Texas 78714-9104

Opinion No. GA-0495

Re: Whether the Texas Department of Insurance is prohibited from disclosing the identities of companies writing commercial property insurance along the Texas coast (RQ-0502-GA)

Dear Commissioner Geeslin:

You ask whether section 38.003(d) of the Insurance Code prohibits the Texas Department of Insurance (the "Department") from disclosing the identities of companies writing commercial property insurance along the Texas coast.[1]

In May of 2006, the Department addressed a written "inquiry to twenty-five groups of Tier 1 and Tier 2 commercial property insurers." Request Letter, supra note 1, at 1.[2] The Department asked the insurers to provide responses to a number of questions, including whether the insurers were writing new policies and renewals in Tier 1 and Tier 2; what deductibles were available in those areas; whether insurers were providing wind coverage in Tier 1; and whether the insurers applied special restrictions on coverage. Id. The Department also requested that the insurers specify "all answers that were changes in underwriting guidelines since September 1, 2005." Id. You state that in response to the Department's request that an insurer designate and label any information it deemed to be confidential, "several of the insurers identified their responses as proprietary and confidential." Id. at 2.

You question whether the Department may release a list of companies writing commercial insurance policies along the Texas coast. You particularly note that "[i]t is not the goal or intent to release specific underwriting criteria or formulas." Id. at 3. You have assured us that you propose to release only the identities of those companies that are writing policies.[3]

Chapter 38 of the Insurance Code relates to "data collection and reports" by the Department. Section 38.001 provides, in relevant part:

(b) The department may address a reasonable inquiry to any insurance company relating to:

(1) the person's business condition; or

(2) any matter connected with the person's transactions that the department considers necessary for the public good or for the proper discharge of the department's duties.

. . . .

(d) A response made under this section that is otherwise privileged or confidential by law remains privileged or confidential until introduced into evidence at an administrative hearing or in a court.

TEX. INS. CODE ANN. § 38.001(b), (d) (Vernon Supp. 2006).

Section 38.002 relates to "underwriting guidelines for personal automobile and residential property insurance," while section 38.003 relates to "underwriting guidelines for other lines," including commercial property insurance. Section 38.003 provides that underwriting guidelines are confidential and will not be made available to the public by the Department. Id. § 38.003(d). The term "underwriting guideline" is not defined in section 38.003, but it is defined in section 38.002. In that section, "underwriting guideline" means:

a rule, standard, guideline, or practice, whether written, oral, or electronic, that is used by an insurer or its agent to decide whether to accept or reject an application for coverage under a personal automobile insurance policy or residential property insurance policy or to determine how to classify those risks that are accepted for the purpose of determining a rate.

Id. § 38.002(a)(4). Section 38.003 was amended in 2003 as part of the same bill that added the present version of section 38.002. See Act of June 2, 2003, 78th Leg., R.S., ch. 206, § 8.01, 2003 Tex. Gen. Laws 907, 932-33. When "construing a statutory word or phrase, the court may take into consideration the meaning of the same or similar language used elsewhere in the act or in another act of similar nature." L & M-Surco Mfg., Inc. v. Winn Title Co., 580 S.W.2d 920, 926 (Tex. Civ. App.-Tyler 1979, writ dism'd). "This rule applies with particular force where the meaning of a word as used in one act is clear . . . and the same word is subsequently used in another act pertaining to the same subject." Id.; accord Guthery v. Taylor, 112 S.W.3d 715, 721 (Tex. App.-Houston [14th Dist.] 2003, no pet.). We may with confidence import the definition of "underwriting guideline" from section 38.002 into section 38.003, substituting "commercial property insurance policy" for "personal automobile insurance policy or residential property insurance policy."

A question remains, however, about whether the term "underwriting guideline" embraces a list of companies that write policies along the Texas coast. The mere fact that a company writes policies for a particular area does not, in our view, constitute an "underwriting guideline." That fact is neither a "rule," a "standard," a "guideline," nor a "practice" whereby "an insurer or its agent [decides] whether to accept or reject an application for coverage . . . or to determine how to classify those risks that are accepted for the purpose of determining a rate." See TEX. INS. CODE ANN. § 38.002(a)(4) (Vernon Supp. 2006). If the legislature had intended to include a mere statement of fact in the definition of "underwriting guideline," it could have easily done so. We believe a court would conclude that whether a company writes policies in a particular area is simply a statement of fact. The Department's release of such information may not fairly be said to constitute an act prohibited by section 38.003(d) of the Insurance Code.

We conclude that section 38.003(d) of the Insurance Code does not prohibit the Department from disclosing the identities of companies writing commercial property insurance along the Texas coast.

SUMMARY

The Texas Department of Insurance is not prohibited by section 38.003(d) of the Insurance Code from disclosing the identities of companies writing commercial property insurance along the Texas coast.

Very truly yours,

GREG ABBOTT
Attorney General of Texas

KENT C. SULLIVAN
First Assistant Attorney General

ELLEN L. WITT
Deputy Attorney General for Legal Counsel

NANCY S. FULLER
Chair, Opinion Committee

Rick Gilpin
Assistant Attorney General, Opinion Committee

Footnotes

[1] Letter from Commissioner Mike Geeslin, Texas Department of Insurance, to Honorable Greg Abbott, Attorney General of Texas (Aug. 23, 2006) (on file with the Opinion Committee, also available at http://www.oag.state.tx.us) [hereinafter Request Letter].

[2] "Tier 1" refers to a county that is adjacent to the Texas coast, and "Tier 2" refers to a county that is adjacent to a "Tier 1" county. See TEX. INS. CODE ANN. art. 21.49, § 3 (Vernon Supp. 2006).

[3] Telephone Conversation with Gene C. Jarmon, General Counsel, Texas Dep't of Insurance (Sept. 22, 2006).