Untitled Texas Attorney General Opinion

THEATTORNEY GENERAL OF’ TEXAS Hon. John Osorio, Chairman Board of Insurance Commissioners International Life Building Austin, Texas Opinion NO. W-56 Re: Whether a county mutual Insurance company may write insurance on risks in states other than Texas? Dear Mr. Osorio: You have requested our opinion on the following question: Way a county mutual insurance comfiany write insurance on risks in states other than Texas? It In your opinion request you have called our atten- tion to Article 17.16 of the Insurance Code. This section of the Code was formerly Article 486Oa-20, Section 15, Ver- non’s Civil Statutes, Acts 1937, 45th Legislature, page 184, chapter 99, paragraph 15. The statute then read as follows: “A county mutual insurance company may write insurance (a) in any county adjoining the county in and for which it is organized, or (b) in any county in which no county mu- tual insurance company has been organized, or (c) anvwhere, if its reserve fund or pol- icyholders contingent liability, or both such reserve fund and contingent liability taken together, exceed the sum of Fifty Thousand ($50,000.00) Dollars.f’ (Emphasis supplied). The identical question you have propounded to us was the matter of Attorney General’s Opinion No. T-729, dated December 9, 1948, wherein it was concluded that a county mu- tual insurance company with a reserve fund or policyholders contingent liability, or both, taken together, in excess of . Hon. JohnOsorio , ‘page ,,2.. f W-56) : $50,000~00, might write insurance outside of Texas. This opinion was, of course, based upon the language of the stat- ute as it was at that ,time. The opinion was bottomed upon the use of the word ltanywher’e” In Subsection (c) + In enact- ing the 1951 Code (Acts 1951, ,,~52ndLegislature, ;chapter 491)) the Legislature chose to leave the word, %anywhere,” in Sub- section (cl, and incorporated what had been’ Section 15,~of Ar- title 486Ca-20, Section 15,~,,J$&t,r,, into ,Jlrt1clgs,~,&7.16 and 16.07 of the Insurance Code .‘,‘~,.,_,~er,eafta~i.,m,~195$,, the,,Legis- lature amended Chapter. 17 of ‘the Insuranc-e, Code.,,“: (Acts 1953., 53rd Legislature, chapters 196,. ‘page 540)•:~‘Th~e:,amendatory , statute included a variety of’ changes lPiuiting”t4e operations of county mutuals. ,AmendedArticle ~17.16prov&dedr , ,~ “A county mutual ,innrance company possessed of Ten Thousand ($lO,OO,O.OC) Dollars or more :in surplus, as ~pr0vi~ded’i.n Article lT,ll;~ may%@.te. ~1.’ insurance ,in any county, adjoining ,the :caurity,,~,~in,~:r~,:.. ;’ and for which it is organized; ‘and, suc4’Qo~~ #ny” possessing as much &Twenty-fire ThQuaaW P$25,~~ 000 -00) Dollars in such surplus may urlte~->Pr+:~ ~..~, .” G3mp4’+~,,;,+lp+ :, ” The amendment made three changes in, ‘the Ithan&&&- ing law, i.e., \(l) requiring Ten Thousand ($lC@CO;OC) ,Dollars or more, in sur’@us to ,wrlte insurance inan ,adjQinihg ,,COunty, (2) requiring Twenty-five Thousand .~5,~OO’~OO),,Dollars,,surplus to write insurance on a state-wide,,basis, and [3)‘~additioa of ~, the words, “within this State” after the vord l&?&here.“. The courts have, declared that ,the’ mere”‘&& that the Legislature enacts an amendment indicates that it. thereby in- tended to change the original Act by creati withdrawing an existing oki@+ ‘1 Sutherland, &&J p* 412; &&ren vi State, 82 Tex.Cri 811 11917) ; ,Ameri 166, 36 S.W.2d~71 It. is- within the power of ~the Legislature to prohibit the insurance company from do’ing b~s~~~s,,,:MitSi,dd~the: State. If the Legislature had not intended, by such amendment, to restrict the activities of a county mutual insurance compa@y to doing I_ business within the State then the,phrase “withimthis State” ., Hon. John Osorio, page 3 &%56) “The rule is elementary that we must give some effect to changes in the words of legis- lative acts, and must also construe their words, so as to accomplish the legislative intent*” The language in question contained in the 1953 amendment was not changed by the 1955 amendment of Article 17.16 (Acts 1955, 54th Legislature, page 413, chapter 117, paragraph 36). In the opinion request you direct our attention to the provisions of Article 17.25, Section 1, of the In- surance Code, which deals with the regulation of county mutual insurance companies. The provisions of this subsec- tion do not directly relate to t-he question you have asked US¶ and are not controlling, inasmuch as Article 17.16 ’ specifically deals with the matter of the sphere of opera- tion. A county mutual insurance company may not write insurance on risks in states other than Texas. Very truly yours, WILL WILSON Attorney General i??%G&&g&* BY Wallace P. Finfrock Assistant WPF:wb APPROVED: OPINION COMMITTEE H. Grady Chandler Chairman