, .
THEA~ORNEY GENERAL
OFTEXAS
Honorable J. N. Nutt Opinion No. C-287
Commissioner of Insurance
State Board of Insurance Re: Whether County
Austin, Texas 78701 Mutual Insurance
Companies organ-
ized and operating
under Chapter 17
of the Texas Insur-
ance Code and quali-
fied to write casualty
lines for state wide
operation may write
all lines of automo-
bile insurance on all
motor vehicles in
addition to those
enumerated In Art.
17.01, Texas Insur-
Dear Sir: ante Code.
You have requested our answer to the following question:
"Are County Mutual Insurance Companies which
are organized and operated under Chapter 17 of
the Insurance Code, quallfled to write casualty
lines for state wide operation, authorlzed to
write all lines of automobile Insurance only on
those vehicles defined, enumerated or listed in
Article 17.01 of the Code, or may such companies
write all lines of automobile Insurance on all
motor vehicles as that term is used or defined
in Article 5.01 of the Code, specifically includ-
ing taxicabs, long haul trucks and other motor
vehicles used for commercial purposes or for hire?"
Your request noted certain prior Attorney General's
opinions which dealt with various facets of this general
problem and are of assistance in answering this question.
Attorney General's Opinion S-168, held that, by meeting
the requirements of Art0 17.25, of the Texas Insurance Code,
as amended, a County Mutual Insurance Company could write
liability insurance on automobiles. This opinion dealt
with the amendment found In Acts 1955, 54th Leg., Chap 117,
-1374-
Honorable J, N. Nutt, page 2 (c-287 )
.<'
which was an extension of the specific authority found In
Art, 17.01of the Texas Insurance Code as to types of insur-
ance doverage available to County Mutual Insurance Companies.
Attorney GeneraPs Opinion NW-532, held that by matntainlng
a surplus of $225,OOO.OO, which is equal to'the minimum re-
quirement for stock companies writing similar lines of insur-
ance, county mutuals could write all lines of automobile
insurance. Your current request requires us to resolve the
question of whether the holding in Attorney General's Opinion
NW-532 included the authority to write all lines of insur-
ance on all automobiles or simply all types of coverage on
those vehicles enumerated in Art, 17.01.
The salient facts covering the background and historical
development of County Mutual Insurance Companies are as follows:
1. The financial requirements for the formation
of County Mutual Insurance Companies were initially
quite limited. Acts 1937, 45th Leg., Ch. 99.
2, The surplus requirements have been strengthened
until they are as stringent as those imposed on
stock companies writing all lines of automobile
Insurance state wide. Article 17,ll (c), T.I.C.,
as amended.
3. In addition to the surplus requirements,
a County Mutual Insurance Company Is prohibited
from assuming a risk on any one~hazard greater
than five (5%) per cent of its assets, unless
au& excess shall be promptly reinsured. Art.
17.25, Sec. 1, T.I.C.
4 County Mutual Insurance,Companles are sub-
ject'to the uniform automobile policy provisions
of the Texas Insurance Code. Attorney General's
Opinion NW-401.
The authority of County Mutual Insurance'Companies to
write certain lfnes of insurance was originally stated In
Article 17.01 of the Texas Insurance Code. This authority
was broadened in 1955 to read as follows:
County Mutual Insurance Companies
qualifying to write casualty lines for State wide
operation may write all linesof automobile In-
surance. e D eU A t lo55 54th Le
eh., 8 37A, ~rt.~17:25: Sec. l,gTt.IY;l.
(Emphasis added.)
i!
-1375-
Honorable J. N. Nutt, page 3 (C-,287 )
Article 17.22 of'the Texas Insurance Code exempts County
Mutual Insurance Companies from the operation of all'other
insurance laws of'this State with certain exceptions. While
Art. 5.01 of the Texas Insurance Code Is not controlling In
determining the meaning of "all lines of automobile insurance,"
it is a legislative definition of the term "automobile lnsur-
ante a"
Article 5.01 provides In part as follows:
"Motor vehicle or automobile insurance as re-
ferred to in this subchapter shall be taken and
construed to mean every form of insurance on any
automobile or other vehicle hereinafter enumerated
and its operating equipment or necessitated by
reason of the liability Imposed by law for damages
arising out of the ownership, operation, mainten-
ance, or use’ in this State of any automobile,
motorcycle, motorbicycle, truck, truck-tractor,
;;a,;:;;,trac,tionengine, or any other self-propelled
and including also every vehicle, trailer
or semiirailer pulled or towed by a motor vehicle,
but excluding every motor vehicle running only
upon fixed rails or tracks. Workmen's Compensa-
tion Insurance is excluded from the foregoing
definition.'
The term "automobile insurance" Is defined in 7 Tex.Jur.2d
228, Insurance Sec. 1, as follows:
'For the,dual purpose of standardization and
convenience,.the term 'automobile' is applied in
a broad sense by automobile insurers. As used by
such insurers, the term refers not only to passen-
ger cars, but also to trucks, tractors, motor-
propelled farm machinery, and various other types
of motor vehicles. Furthermore, as thus employed
the term sautomobile' is as comprehensive as the
term 3motox vehicle.'"
Automobile Is defined in Black's Law Dictionary, (4th
Ed., 1951), 169, as follows:
"A vehicle for the transportation of'persons
or property on the highway, carrying its ;wn motive
power and not operated upon fixed tracks.
In Couch on Insurance (2d Ed. 1959) Sec. 1x20, p. 49,
we find automobile insurance defined as:
-1376-
- .
Honorable J. N. Nutt, page 4 (C- 287 )
"Automobile insurance assumes various forms,
such as liability, 'property damage, collision,
fire, theft, transportation, et cetera. When the
term is used without qualification, It is generally
understood that liability Insurance or In other
words, indemnity against liability for personal
injuries or for losses sustained by reason of ln-
juries inflicted as a result of the operation of
the insured car, is intended."
After study of the Texas Insurance Code and the above
mentioned definitions, we-are of the opinion, and you are
advised that since the Legislature placed no'restrlctlons
upon the term "all lines of automobile insurance," it is
to be given the fullest meaning, which Includes, but is not
restricted to, the definition found In Art. 5.01.
SUMMARY
County Mutual Insurance Companies organized and
operating under Chapter 17 of the Texas Insurance
Code and qualified to write casualty insurance
state wide, may write all lines of automobile ln-
surance on all motor vehicles.
Yours very truly,
WAGGONER CARR
Attorney General of Texas
APPROVED:
OPINION COMMITTEE:
W. V. GEPPERT, Chairman
Joe R. Long
Ed Bolding
J. S. Braeewell
Paul Phy >
APPROVED FOR TKE ATTORNEY GENERAL
BY: Stanton Stone L,1377