Texas Department of Insurance, State Fire Marshal:

An Inventory of Department of Insurance State Fire Marshal Key Rate City Files: Part I (City Files, Group One, A-G) at the Texas State Archives, 1893, 1904-1999, undated, bulk 1930-1997

Texas Department of Insurance Agency History

The Texas Department of Insurance (TDI) regulates the Texas insurance industry. The Department seeks quality insurance products for all Texans at reasonable prices and under reasonable terms and strives to protect consumers' insurance assets. TDI enforces solvency standards and promotes competition in the industry while protecting consumers from fraud, misrepresentation and unfair practices. TDI educates the public about insurance so that Texans can make informed choices and works to protect the lives and property of the citizens of Texas from fire and fire-related hazards.

The history of state regulation of insurance in Texas dates from 1874, when the 14th Legislature passed a law regulating the life and health insurance business in the areas of company formation, activities and coverage (Chapter CXLV, Regular Session). This Act also gave the State Comptroller of Public Accounts supervisory authority over insurance (as there was not a state insurance department in existence), including issuing yearly renewal of certificates to companies. In the early days of statehood, practically all insurance business in Texas was written by companies organized in other states and foreign countries. According to State Comptroller's records, out of 61 companies doing business in Texas in 1874, only four were domestic. Until the 1876 State Constitution was adopted, Texas insurance corporations were created by special acts of the legislature. These domestic companies ventured into the business -- mostly fire and marine insurance -- in competition with financially stronger and more experienced out-of-state companies. As a result, most of them either went bankrupt or had to be reinsured and taken over by their out-of-state counterparts.

The Texas 1876 Constitution authorized the Legislature to create the office of Insurance Commissioner. Later that year the 15th Legislature passed a bill creating the Texas Department of Insurance, Statistics and History (Chapter CXXXIII, Regular Session). The Department had the responsibility to file and maintain insurance company charters; determine net value of all insurance companies in the state annually, to see that companies maintained an amount equal to their net value in safe, legal securities; calculate re-insurance reserves for unexpired fire risks; and suspend or close the operation of companies in non-compliance with insurance regulations. Insurance companies had to furnish a certificate to the Insurance Commissioner on the valuation of the company. If the Commissioner determined the net value was below the state-determined safety net, he was to notify the company to cease doing business and suspend or close their operations. The Commissioner had access to all books and papers of companies and could revoke or modify certificates of authority, call witnesses to testify, and initiate suits and prosecutions. In addition to his insurance-related duties, the commissioner was charged with keeping information and statistics on the state's population, wealth and general resources. He also served briefly as the state historian, the state librarian and superintendent of public grounds and buildings.

In 1887, the Department's authority was expanded by adding agriculture regulation to the Department's regulatory functions (House Bill 355, 20th Legislature, Regular Session). It was renamed the Texas Department of Agriculture, Insurance, Statistics and History. In 1905 (Senate Bill 6, 29th Legislature, Regular Session) banking supervision and regulation were added to the agency. In 1907, a separate office was created for agriculture, and the agency became the Texas Department of Insurance and Banking (House Bill 274, 30th Legislature, Regular Session). The history and statistics functions were absorbed by the State Librarian.

In 1909, Senate Bill 291 (31st Legislature, Regular Session) required insurance companies to file financial and other information with the new Commissioner of Insurance and Banking. Also in 1909, Senate Bill 25 was passed by the 31st Legislature, 3rd Called Session, which created the Fire Insurance Rating Board, with the Commissioner of Insurance and Banking as the chair. The main duty of this board was to prevent discrimination in fire insurance rates. The Commissioner of Insurance and Banking also became the supervisor of all building and loan associations in Texas.

The 31st Legislature created the State Insurance Board in 1910 (Senate Bill 7, 4th Called Session), which replaced the fire rating board. The Commissioner of Insurance and Banking served as the chair, the governor appointed two other members, with the advice and consent of the Senate. One Board member was also designated as the Fire Marshal of the Insurance Board. The board was to supervise, control and regulate fire rates. Duties of the board included to make and prescribe general schedules for insurance, together with rules and regulations for determining maximum specific rates therefrom, and to furnish each insurance company doing business within the state a copy of the rate schedule. The board had the authority to alter or amend insurance rate schedules. The board was also to ascertain the annual fire loss to the state, to collect data in order to classify the fire losses, causes thereof, and amount paid thereon in such a manner as to be of assistance in determining equitable insurance rates, methods of reducing fire losses, and reducing insurance rates of the state. In 1913 the State Insurance Board's name was changed to the State Fire Insurance Commission and its authority broadened (Senate Bill 387, Regular Session). Additional duties included the ability to prescribe, fix, determine, and promulgate the rates of premiums to be charged and collected by fire insurance companies. The board had the authority to alter and amend premium rates.

In 1923 the Commissioner of Insurance was separated from the Commission of Insurance and Banking (Senate Bill 29, 38th Legislature, 3rd Called Session). The agency now became the Texas Department of Insurance. In 1927, the Commissioner of Insurance was consolidated with the Fire Insurance Commissioner to create the Texas Board of Insurance Commissioners (Senate Bill 253, 40th Legislature, Regular Session). It consisted of three commissioners - the Life Insurance Commissioner, who served as chair, the Fire Insurance Commissioner, and a Casualty Insurance Commissioner. In addition to past insurance functions, the Board now had the authority to approve and disapprove auto insurance rates and to promulgate uniform policy reforms.

Major changes were made in insurance laws in the 1950s. In 1951 insurance laws were codified into the Texas Insurance Code (Senate Bill 236, 52nd Legislature, Regular Session). Due to a number of insolvency scandals (23 domestic companies were placed into receivership between 1954 and 1958) the legislatures of the period passed at least 16 insurance related bills, including strengthening examination laws, increasing minimum capital and surplus requirements, and giving the Board more control over issuing certificates of authority.

The Board of Insurance Commissioners was abolished in 1957 and replaced with the Texas State Board of Insurance (Senate Bill 222, 55th Legislature, Regular Session). The State Board of Insurance was composed of three members, appointed by the Governor with Senate approval. Members served six-year overlapping terms. The Board was governed by the Texas Insurance Code. From 1957 to 1991, the term "State Board of Insurance" was sometimes used to refer to the agency and all of its employees. At other times, it was used to designate only the three-member Board. The Board had initial jurisdiction over policies, rules, and rates, and over appeals from the Commissioner of Insurance. The Board appointed, with the consent of the Senate, the Commissioner of Insurance, who acted as the executive and administrative officer for the agency. The Commissioner also served as State Fire Marshal until 1975, when the 64th Legislature passed the Fire Alarm System Act, which created the Office of the State Fire Marshal. The marshal was now appointed by the chair of the State Board of Insurance and was directly responsible to the board.

In 1991, the 72nd Legislature created the Texas Commission on Fire Protection (TCFP) by combining two agencies, the Texas Commission on Fire Protection Personnel Standards and Education, and the Texas Fire Department Emergency Board (Senate Bill 383, Regular Session). It also transferred certain duties from the Texas State Board of Insurance, including oversight of the State Fire Marshal and the key rate municipal inspections. Also in 1991, the 72nd Legislature revised the regulation of insurance and changed the agency's name to the Texas Department of Insurance (House Bill 2, Regular Session and House Bill 62, 2nd Called Session). The three-member State Board of Insurance was abolished by the 73rd Legislature in 1993 (House Bill 1461, Regular Session). The management and regulatory duties of the Board became the responsibility of the Commissioner of Insurance as of September 1, 1994. The Commissioner is the overall authority in the enforcement of the Insurance Code and the regulation of the insurance industry in Texas.

[Sources: Guide to Texas State Agencies, various editions; laws and statutes of Texas; agency's webpage ( http://www.tdi.state.tx.us/webinfo/vision.html, accessed January 8, 2007) and documents found within the State Fire Marshal's records.]

State Fire Marshal Agency History

The Texas State Fire Marshal is a division of the Texas Department of Insurance. The Marshal's Office conducts fire and arson investigations; performs fire safety inspections; regulates the storage, handling, and use of flammable liquids at retail service stations; and issues permits for the display and sale of fireworks. The office also licenses and regulates the installation and maintenance of fire extinguishers, fire alarms, and automatic fire sprinkler systems. And, it oversees inspection activities by ISO, a private organization contracted to perform inspections conducted in cities and communities to determine fire suppression rates.

The State Fire Marshal position was created in 1910 as part of the State Insurance Board (Senate Bill 7, 31st Legislature, 4th Called Session) to conduct fire and arson investigations and provide technical support to municipal and rural fire departments. The State Fire Marshal investigated fires upon request of local officials or fire insurance companies and determined the cause, submitting a written report to the State Insurance Board. He was also to furnish in writing to the county or district attorney all information and evidence obtained during the investigation including a copy of all pertinent testimony obtained in the case. The State Fire Marshal had the authority to administer oaths, take testimony, compel the attendance of witnesses and the production of documents, and to enter the building where the fire occurred or adjacent structures as needed during the investigation. He also conducted inspections of local fire department facilities as part of a process to establish key rates - rates that were part of a formula used to determine fire insurance rates for individual properties in cities and towns. Beginning in 1957 the Commissioner of Insurance served as the State Fire Marshal until 1975, when a separate State Fire Marshal Office was established in the State Board of Insurance, with the fire marshal appointed by the Chair of the Insurance Board.

In 1991, the 72nd Legislature created the Texas Commission on Fire Protection (TCFP) by combining two agencies, the Texas Commission on Fire Protection Personnel Standards and Education, and the Texas Fire Department Emergency Board (Senate Bill 383, Regular Session). It also transferred certain duties from the Texas State Board of Insurance, including oversight of the State Fire Marshal and the key rate municipal inspections. In September 1997 the 75th Legislature returned the State Fire Marshal's Office to the Texas Department of Insurance (Senate Bill 371, Regular Session).

[Sources: Guide to Texas State Agencies, various editions; laws and statutes of Texas; webpage of the State Fire Marshal ( http://www.tdi.state.tx.us/fire/fmhistoy.html, accessed January 8, 2007); and documents found within the State Fire Marshal's records.]

History of the key rate process

In the late 1800s, due to large, catastrophic losses as a result of major fires, the insurance industry began to formally evaluate the fire defenses of communities. In 1916, an industry standard was produced, Standard Grading Schedule of Grading Cities and Towns. Texas adopted an evaluation process in 1918, based on the 1916 standards, to establish a methodology for establishing fire insurance rates for individual properties and communities, known as key rates. These rates were part of a formula used to determine fire insurance rates. Items evaluated to determine the key rates included the fire department's method for receiving and handling of fire alarms, the capability of the fire department to fight fires, and the capability of the community's existing water supply to fight fires. The more proficient a community was judged in fighting fires, the lower the key rate, resulting in lower fire insurance rates for the individual properties within that community.

Until 1991, key rate inspections were conducted by the State Board of Insurance and its predecessors. In 1991, the inspection duty was transferred to the Texas Commission on Fire Protection (TCFP). It conducted key rate inspections and recommended a key rate to the State Board of Insurance for the board's final approval. If the rate was not approved, the Board of Insurance would inform TCFP of the reason and recommend another rate. Effective January 1, 1997, all existing key rates for cities were frozen. In 1998, the Department of Insurance switched to a Fire Suppression Rating Schedule, the system used in all other states, which grades fire protection on the basis of a city's actual fire exposure and water flow necessary to control fires wherever they occur. The detailed reports of inspections are now carried out by ISO, a private organization, overseen by the State Fire Marshal.

Scope and Content of the Records

The Texas State Fire Marshal conducted inspections of local fire department facilities as part of a process to establish key rates - rates that were part of a formula used to determine fire insurance rates for individual properties in cities and towns. Records consist of key rate analyses, reports, correspondence, maps, proposed key rate schedules, city ordinances, city codes (electrical, fire, etc.), operational or engineering reports on water distribution systems, water and waste water master plans, inspection reports of fire fighting equipment, certificates of inspection for pumpers or other fire department apparatus, manufacturer's record of construction details, reports of city fire departments, and training reports of city and rural fire departments, etc. Dates covered are 1893, 1904-1999, undated, bulk 1930-1997. These files were used to determine and document the key rates of cities and towns in Texas for use in establishing fire insurance rates.

A key rate analysis sheet is present for all cities, towns, and rural areas presented in these records. Information on the analysis includes the name of the city and county; population; and charges assessed for the existence for waterworks, fire departments, building laws, streets, alleys, fire marshal, and conflagration hazards, with a total for all charges given. A credit amount was given based on the city's fire protection capability, including factors such as methods of fire prevention and principles of fire insurance, the fire department's level, fire equipment, arson reward, and firemen training opportunities. The resultant amount (charges minus the credit) was the key rate. Rates ranged from 7 cents to $1.00. The higher the amount, the higher the fire insurance rates would be for individual properties within the community. Based on the 1991 figures, cities or communities with rates under 80 cents were listed as protected; those entities with rates 81 cents or higher, mostly very small towns, rural areas, and communities, were listed as unprotected.

The most comprehensive reports present in this series are inspection reports of cities and towns by the National Board of Fire Underwriters and/or the State Fire Insurance Commission. Each report gives an overview of the city and details of the fire department operations (organization, equipment, personnel), the water supply and water distribution network, water consumption, structural conditions and hazards, municipal building codes, building construction, electric services, and conflagration hazards; ending with recommended improvements. Each report generally contains a plat or street map, most showing streets, railroads, public areas, rivers and lakes, water pumping stations, water mains, water tanks, fire departments, and fire hydrants. For many cities, the reports were written every 10 years or so, and the later reports refer back to the earlier ones, noting changes or improvements made or still needed. These reports are not present for all cities or towns, just for the the larger ones, with a few exceptions. Other reports present include re-inspection reports, either by the Texas Fire Insurance Department, the Texas State Board of Insurance, or the Texas Commission on Fire Protection. The re-inspection reports contain data about the city's fire fighting capabilities, in summary form (number and location of water pumps, fire hydrants, water mains; reservoir capacity, water flow tests and plumage test results; fire fighting apparatus available; city ordinances; building activity, etc.)

Also present is correspondence, mainly between the State Board of Insurance (or the predecessor agency handling this function), or the Texas Commission on Fire Protection, and city officials and engineers and/or the National Board of Fire Insurance Underwriters. Topics concern the fire fighting capabilities of the city, including equipment needed, changes to pumping stations, water main construction or repairs, building code issues, key rate issues, fire code compliance for buildings, and conflagration issues. Many letters in the late 1930s concern WPA projects undertaken and refer to attached blueprints, most of which are not present with these files. Memoranda between the Department of Insurance and the Commission on Fire Protection in the 1990s document the acceptance or non acceptance of recommended key rates, with reasons for nonacceptance of a rate given.

Housed separately are a large group of mostly original maps of water systems of cities and towns. These maps typically show streets and roads, rivers, lakes, water lines, fire hydrant locations, and other water system features. Most of the maps were done by the Engineering Division of the Department of Insurance or its predecessors (the State Board of Insurance, the Texas Fire Insurance Dept., or the State Fire Insurance Commission), with a few done by the Texas Commission on Fire Protection. Several hundred water system maps and related maps are folded and housed in the boxes with the records of the cities and towns, most being different editions of the city water system plats done by the various insurance agencies. Other maps include water system or water district maps by local governments, and street maps. During processing, original water system maps found in the boxes were removed and placed in the Historic Map Collection, along with maps housed separately from the city files. These maps are listed in the finding aid by map number following the name of the city in the group one city files.

This series is split into four separate finding aids due to the electronic file size limitations imposed by the online finding aid web site (TARO). If you are reading this electronically, click on the following link to access the finding aid for parts II through IV. Texas Department of Insurance, State Fire Marshal key rate city files: Part II (city group one, H-N); Texas Department of Insurance, State Fire Marshal key rate city files: Part III (city group one, O-Z); and Texas Department of Insurance, State Fire Marshal key rate city files: Part IV (city group two). . If you are reading this in paper, Parts II through IV of this series can be found in separate dividers within this binder.

This finding aid describes a single series of the State Fire Marshal records. If you are reading this electronically, click on the following link to access the additional series found in the overall finding aid, Texas Department of Insurance State Fire Marshal key rate files. If you are reading this in paper in the Archives search room, the overall series finding aid is found in the first divider within the same binder.

To prepare this inventory, the described materials were cursorily reviewed to delineate series, to confirm the accuracy of contents lists, to provide an estimate of dates covered, and to determine record types.

Restrictions

Restrictions on Access

Because of the possibility that portions of these records fall under Public Information Act exceptions including, but not limited to, home addresses, phone numbers, and social security numbers of government employees or officials (V.T.C.A., Government Code, Section 552.117); driver's license numbers (V.T.C.A., Government Code, Section 552.130), an archivist must review these records before they can be accessed for research. The records may be requested for research under the provisions of the Public Information Act (V.T.C.A., Government Code, Chapter 552). The researcher may request an interview with an archivist or submit a request by mail, fax, or email including enough description and detail about the information requested to enable the archivist to accurately identify and locate the information requested. If our review reveals information that may be excepted by the Public Information Act, we are obligated to seek an open records decision from the Attorney General on whether the records can be released. The Public Information Act allows the Archives ten working days after receiving a request to make this determination. The Attorney General has 45 working days to render a decision. Alternately, the Archives can inform you of the nature of the potentially excepted information and if you agree, that information can be redacted or removed and you can access the remainder of the records.

Materials do not circulate, but may be used in the State Archives search room (Room 100). Materials will be retrieved from and returned to storage areas by staff members.

Restrictions on Use

Most records created by Texas state agencies are not copyrighted and may be freely used in any way. State records also include materials received by, not created by, state agencies. Copyright remains with the creator. The researcher is responsible for complying with U.S. Copyright Law (Title 17 U.S.C.).

Technical Requirements

Most of the maps are too large to photocopy.

Researchers are required to wear gloves provided by the Archives when reviewing photographic materials.

Related Material

Administrative Information

Preferred Citation

(Identify the item), Texas Department of Insurance State Fire Marshal key rate city files. Archives and Information Services Division, Texas State Library and Archives Commission.

Accession Information

Accession number: 2002/082

These records were transferred to the Archives and Information Services Division of the Texas State Library and Archives Commission by the State Fire Marshal's Office of the Texas Department of Insurance on December 12, 2001.

Processing Information

Laura K. Saegert, January 2007

Appraisal Information

These records were appraised as archival by the appraisal staff on November 1, 2001. The records and all maps were transferred to the State Archives shortly thereafter. The appraisal report can be found in the search room of the State Archives; it is also available online at http://www.tsl.state.tx.us/arc/appraisal/firemarshalkeyrate.html.

Detailed Description of the Records