Untitled Texas Attorney General Opinion

WILLBVILSON
*-l-ro- OENEzRAl. March 27, 1958

Honorable Wflliun & H~?~~oxI Opinion No. WW-401
Commissioner Of InoufurCO
State Board d huuruuo Re: Is a county mutual insurance
Austin, Texas company which writes automobile
insurance subject to the automo-
bile, rate and policy provisions of
Article 5.01, et seq., Texas Insur-
Dear Sir: ance Code?

Your reqwat f4r an OptdOn is as follows:

“The last session of the Texas Legislature author-
ized county mutual fnrurance companies qualifying to write
casualty lines for &ate-wide operation to write all lines of
automobile insurance. Under Chapter 5 of the Insurance
Code, the writing d, all automobile insurance. in ,thiS State
is subject to regulation and control by the Board of Insur-
ance Commissionerr; and the Board fines and promulgates
classifications, ratoi.‘nnd policy forms for automobile in-.
surance. However, Cwpter 17 of the Code makes county
mutual insurance compnnieo exempt from operations of co?-
tain of the iasurmcr l&s of this State.

“We ,respectfully request your opinion as to whether
a county mutual insurance company writing automobile in-
surance is subject to the prwinions of Article 5.01, et seq.,
of the Texas Insurance Coda, and mwt therefore comply,
with the automobile rating and policy lawo of this Stnb, and
the regulations of the Board of Insurance Comtni.sslonere?’

As pointed out in your request, county mutual insurance companies
are regulated by the provisions of Chapter 17, Texas Insurance Code. Sec-
tion 5 of Article 17.25 specifically makes county mutual companieo ,rubject
to the provisions of Article 5.06 of the Code which requires the B~oard to
prescribe policy forms for insurers writing automobile insurance in this
State. Thevefore. county mutual insurance companies writing automobile
insurance must use polify forma and endorsements promulgated or ap-
proved by the Insurance bapartment under the provisions af-&ticle 5.06.
As to the portion of your request concerning the automobile rate
provisions oi Article 5.01, et seq., wo~experience more difficulty in an-
Hon. William A. Harrison, page 2 (WW-401)

swering the question. Article 5.01 provides that ‘every insurance com-
pany, corporation, interinsurance exchange, mutual reciprocal, asso-
ciation, Lloyds’ or other insurer. . . writing any form of motor vehicle
insurance in this State’ shall be subject to the rates of premiums pro-
mulgated a.nd fixed hy the State Roard of Lnsurance. This st.ztul:r a-c;-
thoriaes the St;lte Board of insurance to prescribe and fix .~utomnbile
rates within this State, and would appear to require every insurance
company writing such insurance to comply with the rates established
by the Board. .However, Article 17.22 of the Code provides that “county
mutual insurance companies shall be exempt from the operation of all
insurance laws of this State, except as in this Chapter specifically pro-
vided. . .* Throughout Chapter 17 certain other enumer.ii.ed st&otzx
are made to apply to county mutual companies; but nbw*tiesr in Chap?.er
17 are the provisions of Article 5.01, and the other stztuter, authorizing
the Board to fix automobile rates and requiring companies lo comp:~y
with these rates, specifically made applicable to county mutual insur-
ance companies. Section 1 .of Article 17.25 does authorize county mu-
tual companies qualifying to write casualty lines for state-wide opera.-
tions to “write all lines of automobile insurance”. However, this
statute does not specifically require county mutuals to comply with the
rates of premiums fixed and promulgated by the Roar.+ under Article
5.01. The provision authorizing county mutuals to write all iincs of
automobile insurance was enacted by the 54th Legislature. At the same
session. the Legislature amended Article 17.22 and provided specifically
that county’mutual companies would be subject to the provisions of cer-
tain enumerated statutes, but did not include therein Article 5.01. As
the 54th Legislature authorized county mutual companies to write au-
tomobile insurance, it Could have required the companies .to be subject
to the automobile rate laws when it amended Article 17.22 if that bad
been the legislative intent. This the Legislature did not do. Therefore,
Section 1 of Article 17.25 appears to be a naked authorization to the
companies to write all lines of automobile insurance, without the com-
panies being subject to the automobile rate laws.

Article 18.23, dealing with Lloyds’ companies provides that
Lloyds’ shall be exempt from the operation of all insurance laws of the
State except as is provided in Chapter 18 “or unless it is specifically
so provided in such other law that same shall be applicable” to Lloyds’.
As Article 5.01 mentions Lloyds’ dompanies, the .“or” provision in
Article 18.23 comes into effect and the Lloydsr companies are subject
to the rating provisions of Article 5.01. The same type of statute and
construction of the statute is applicable to reciprocal exchanges. Arti-
cle 19.12. However, Article 17.22 dealing with county mutuals does not.
have such an “or” clause, and specifically exempts county mutuals from
all other insurance laws except those specifically enumerated within the
bounds of Chapter 17. Therefore, while Article‘5.01 generally mentions
mutual companies and all other insurance companies,writmg automobile
insurance within the State, Article 17.22.i~ specific and is an +emption
or exception statute to the general law Article 5.01. Walker V.-Meyers,
114 Tex. 225, 266 S.W. 499; Cameron v. City of Waco, 8 S.W.Ld 249 ;
Snoddy v. Caz,
-I..--- 5 Tex. ,106; 39 Tex.Jur. p. 191, 277.
Hon. William A. Harrison, page 3 (WW-401)

Therefore, we are of the opinion that (1) county mutual insurance
companies operating under the provisions of Chapter 17 of the Insurance
Code and writing automobile insurance are subject to the automobile pol-
icy provisions of Arti.cle 5.06 of the Code, but (2) county mutual inswznce
companies writing automobile insura.nce are not subject to the automobile
rate and premium provisions of Articles 5.01, et seq., of the Code.

SUMMARY

County mutual insurance companies are subject to the
automobile policy provisions of the Texas Insurance
Code, but are not subject to the automobile rate and
premium provisions of the Texas Insurance Code.

Very truly yours,

WILL WILSON
Attorney General of Texas

T&J 1. U&h&
Fred B. Werkenthin
Assistant Attorneys General

FBW:dac

APPROVED:

OPINION COMMITTEE:
Gao. P. Blackburn, Chairman
Wallace Finfrock
Morgan Nesbitt
Richard Stone

REVIEWED FOR THE ATTORNEY GENERAL
BY: W. V. Cieppert